ECE666: Power Systems Operation

Module-4: Transmission System Operations

Prof. Kankar Bhattacharya

Department of Electrical & Computer Engineering
University of Waterloo, Waterloo, N2L 3G1, Canada
kankar@uwaterloo.ca

1 Module-4 ECE666: Winter 2021

 Transmission Open Access

2 Module-4 ECE666: Winter 2021

 The Transmission Business

• Rationale-
• It exits only because generators and loads that use the
network are in the wrong place
• Market opportunities increase with the distance that separates generators
from customers
• Transmission is a natural monopoly
• Because of the size and scale of the system
• Like all monopolies providing essential services, it must be
regulated
• Regulatory authorities determine its revenues
• Set in a way that investors get a modest rate of return on their capital
• Biggest risk faced by transcos- regulatory risk

3 Module-4 ECE666: Winter 2021

 The Transmission Business… contd.

• Transmission is a capital intensive business

• Lumpy, irreversible investments
• Possibilities for stranded costs- if not analyzed properly

• Need for redundancies to meet security requirements

• Assets have a long life
• 20 – 40 years or even longer
• Emphasizes the need for redundancies

• Economics of Scale in construction cost in terms of capacity,

is high
• A significant portion of the cost is independent of the amount
of active power the line can transport
• Therefore, the average cost of transport decreases with the
amount transported

4 Module-4 ECE666: Winter 2021

 What is Transmission Open Access?

• Basic difference between wheeling and Transmission Open

Access (TOA)
• Wheeling is a one-time isolated service of power delivery
between two parties, by a third party
• TOA is a separate business in itself providing and facilitating
market competition and requires to be treated separately
• IEEE Task Force Definition: TOA is a requirement that
transmission network owners make their systems available
to other players in the system
• Types:
• Point-to-point services: with specified delivery and receipt
points
• Network services: allows a complete access

5 Module-4 ECE666: Winter 2021

 6

Open Access Transmission Transactions

Types of Transmission
Transactions in Open Access

Firm Transactions Non-firm

Not subject to discretionary interruptions, entails
reservation of capacity on transmission facilities Transactions

Short-term
Long-term
Few hours to one / two
Pricing allows for building As available Curtailable
years, does not provide for
new transmission facilities
transmission reinforcements

6 Module-4 ECE6607PD: Spring 2020

 Transmission Open Access Framework

• By paying a single
access fee for network Local
Customer

connection, a
participant has access Genco

to the whole Regional

Grid
interconnected system Genco Genco-A
• Customer-A pays to
the local network H.V. Transmission
Customer
System
• Genco-A pays to the
Customer
HV network Regional
• Both have an open
Regional
Grid
Grid
access of the whole
grid to buy / sell from Local
Genco
any party or the pool Local

Customer-A Customer

7 Module-4 ECE666: Winter 2021

 Downstream Network Tariff Design

Transmission
Costs

Tariff for Transmission

Network
Electricity
Market Price Costs of regional
network

Customer on
Tariff for
Regional Network
regional network

Costs of local
network

Customer on Tariff for local

Local Network network

8 Module-4 ECE6607PD: Spring 2020

 Pricing: Goals

• Recover costs-
• revenue should cover investment, operation and maintenance
expenses
• also provide a small (regulated) level of profit
• Encourage efficient use-
• should give incentive for using network efficiently
• efficient use can be either economic efficiency e.g. maximizing
social benefits, or technical efficiency e.g. minimizing losses or
high reliability
• Encourage efficient investment-
• provide an incentive for investment in new facilities where
needed
• Fair- and equitable to all users
• Understandable- to all users
• Workable- implementable

9 Module-4 ECE666: Winter 2021

 Transmission Pricing Paradigms

• Embedded Cost Based

• All costs (existing+new) allocated among various users
according to their extent of use of network
• Has been criticized because- lacks lacks credible foundation in
economic theory.
• Produces tariffs that are proportional to the average cost,
rather than the incremental cost of the network.
• Do not provide correct economic signals. For
example, it ignores scarcity of resources
• Because of their simplicity and ease of implementation-
have been used widely by utilities
• postage stamp method
• contract path method
• MW-mile method

10 Module-4 ECE666: Winter 2021

 Transmission Pricing Paradigms… contd.

• Incremental Cost Based

• New customers pay only additional costs caused by them
• Existing customers pay existing system costs
• Promotes economic efficiency
• However, implementation is a formidable task
• Short-Run Marginal Cost (SRMC) Method
• Long-Run Marginal Cost (LRMC) Method

11 Module-4 ECE666: Winter 2021

 Method-1: Postage Stamp Method

• Users pay a “use of the network charge”

• Depends on MW rating for generator, or peak demand for a
load
• May also consider annual MWh production / consumption
• May depend on connection voltage level

• Simple MW and duration based charge

• Independent of supply / delivery point or distribution of load
imposed on different lines by the transaction
• Assumes that entire network is being used and costs are
average rather than for specific facilities
• Some users cross-subsidize others, distorts competition

12 Module-4 ECE666: Winter 2021

 Method-1: Postage Stamp… contd.

• The entire network is considered a centrally operated

integrated system
• Ignores actual power flows and constraints
• sends incorrect signals to transmission customers

Pt
Rt = TC ⋅
Ppeak
where R t is the transmission price for transaction t , $
TC is the total transmission charges, $
Pt is the transaction t load at the time of system peak load condition, MW
Ppeak is system peak load, MW

13 Module-4 ECE666: Winter 2021

 Method-2: Contract Path Method

• Assumes that transmission services can be represented by

transmission flows along specified and artificial electrical
paths throughout the network
• The contract path is a physical transmission path
established between two transmission users disregards the
fact that Kirchoff’s laws will not obey these
• Transmission charges are then assigned using a postage-
stamp rate once the contract path is established
• Recovery of embedded capital costs are limited to artificial
contract paths

14 Module-4 ECE666: Winter 2021

 Method-3: MW-Mile Method

• Power flow calculations are used to determine the actual

paths the power flows through the network
• The amount of MW-mile of flow that each transaction
causes, is calculated. This amount is then multiplied by an
“agreed” per-unit cost of transmission capacity.
• Transactions are thus charged in proportion to their
utilization of the grid, i.e., the magnitude of difference flows
arising from the transactions
• The base-case power flow condition from which the
difference flows are evaluated, and the order of the
transactions can have some undesirable effect on the
results

15 Module-4 ECE666: Winter 2021

 Method-3… contd.: Difference Power Flows

• The net difference method:

DF = TF − BF

• Vector difference method:

DF = TF − BF

• Positive difference method:

DF = TF − BF ∀ TF > BF

• TF is the transfer flow due to the transaction, BF is the base

power flow.
• DF is the difference flow

16 Module-4 ECE666: Winter 2021

 Method-3: MW-Mile… contd.

• The pricing method is as follows:

 
 P j;Ti ⋅ L j ⋅ F j 
RTi = TC ⋅ ∑  
j  ∑ P j;Ti 
 i 
where R T i is the price charged for transaction Ti , $/MW
Pj;Ti is the loading of line j due to transaction Ti , MW
Lj is the length of the line j, mile
TC total cost of all lines
Fj is a pre - determined unit cost reflecting the cost
per unit capacity of the line, $/MW - mile

• Although a more equitable approach,

• Continues to suffer from defects arising from lumping of
operating and embedded costs
• Fails to distinguish between relative importance of different
lines in secure system operation and in reliability of each
transaction

17 Module-4 ECE666: Winter 2021

 Example: MW-Mile Transmission Pricing

SELL 75 MW: T2
1 2 8
1 2 8
0.11 1.44 0.92

BUY 300 MW: T1

6 1.94 6 SELL 300
MW: T1
0.94 0.31

5 5
1.03
1.21
7 3 4
7 3 4
BUY 75 MW: T2

Only real power flows are shown. All power flows are in per-unit.
Use Vector Difference Method to evaluate difference flows

18 Module-4 ECE666: Winter 2021

 Example… contd.

• New power flows for a transaction of 300 MW

• Between a seller located at bus-5 and buyer at bus-6

1 2 8

1.55 1.46 0.94

6 0.93
2.73 1.45 SELL 300
MW
BUY 300 5
1.03
MW 2.49

7 3 4

19 Module-4 ECE666: Winter 2021

 Example… contd.

• New power flows for a transaction of 75 MW

• between a seller located at bus-8 and buyer at bus-4

SELL 75 MW

1 2 8
0.16
1.53 1.76
6 2.03
0.92 0.41

5
1.03
2.12

7 3 4

BUY 75 MW

20 Module-4 ECE666: Winter 2021

 Example…contd.

Unit cost of transmission line is assumed 100 $/MW-mile

Steps Line, i-j 5-4 6-7 3-5 2-8 1-6 3-6 1-4 8-5 Total
A Li,j * ci,j 50,000 20000 31000 47000 30000 64000 15000 37000
B Pi,j Base 1.21 1.03 0.31 1.44 0.11 0.94 1.94 0.92
C Pi,j due to T1 2.49 1.03 -1.45 1.46 1.55 2.73 0.93 0.94
D Pi,j due to T2 2.12 1.03 0.41 1.53 0.16 0.92 2.03 1.76
E DF due to T1 1.28 0 1.76 0.02 1.44 1.79 1.01 0.02
F DF due to T2 0.91 0 0.10 0.09 0.05 0.02 0.09 0.84
G A*E 64000 0 54560 940 43200 114560 15150 740 293150
H A*F 45500 0 3100 4230 1500 1280 1350 31080 88040
I GTotal + HTotal 381190
J GTotal/I 0.769
K HTotal/I 0.231

T1: pays 76.9% of the cost T2: pays 23.1% of the cost

21 Module-4 ECE666: Winter 2021

 Comparison of Cost Allocation Methods

Method Applied to Load Payments based Comments

Flow on
Analysis
Postage Both real power none Volume of transaction Assumes that
Stamp generation or load Estimated cost the entire
transmission
system is being
used
Contract Both real power none -do- Assumes that
Path generation or load transmission
service is
restricted to a
specified path
MW-Mile Both real power Usually dc Volume of transaction Depends on
generation or load power flow Path of transaction operational
Distance of conditions
contracted transaction

22 Module-4 ECE666: Winter 2021

 Method-4: SRMC Based Pricing

• SRMC: Cost of supplying additional 1 MW of power in a

transaction
• Marginal cost difference between point of delivery and point of
receipt
• Purchase / sell price at a bus is SRMC measuring the
variation of system operating cost and operating constraints
• This price fails to generate revenue for new transmission
facilities
• Total cost recovery does not exceed 30% on the average
• Distorts long-term decisions by not reflecting reinforcement /
existing cost components
• Certain transactions may indicate -ve costs if marginal cost
at selling bus is higher than at buying bus
• Some minimum cap should be applied to meet ancillary service
costs

23 Module-4 ECE666: Winter 2021

 Method-4: SRMC Based Pricing … contd

Rt = ∑ SRMCi ⋅ Pi,t
i∈Bt
where, Rt Cost of transaction t
SRMCi Short - run marginal cost at bus i
Pi,t Power injected at bus i due to transaction t , - ve for generation
and + ve for load
Bt Set of transmission buses : delivering and receiving points for the
transaction t

24 Module-4 ECE666: Winter 2021

 Example: SRMC Based Pricing

1 2 8 1 2 8

0.11 1.44 0.92

6
6 1.94
BUY: T1 SELL T1
0.94 0.31

5 5
1.03
1.21
7 3 4
7 3 4

Assumed- transmission owner is also responsible for

generation scheduling

25 Module-4 ECE666: Winter 2021

 Example… contd.

• When T1 = 0 (no additional transaction between buying bus-6

and selling bus-5)
• λB - λS = $6.68/MWh (subscript B = buying bus, S = selling bus)
• This is because of transmission losses

• For T1 = 25 MW,
• λB - λS = $7.82/MWh
• SRMC based tariff for T1, will be (ρT1)

• 𝜌𝜌𝑇𝑇𝑇 = 𝜆𝜆𝑇𝑇𝑇 𝑇𝑇𝑇

𝐵𝐵 − 𝜆𝜆𝑆𝑆 − 𝜆𝜆𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵
𝐵𝐵 − 𝜆𝜆𝑆𝑆𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵

• 𝜌𝜌𝑇𝑇𝑇 = Δ𝜆𝜆
𝑇𝑇𝑇
− Δ𝜆𝜆𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵

• = 1.14 $/MW

• λ is the bus marginal cost

26 Module-4 ECE666: Winter 2021

 Classical References on This topic

• A. F. Vojdani, et al., “Transmission access issues”, IEEE Trans.

Power systems”, Feb.’96
• R. A. Wakefield, et al., “A transmission services costing
framework”, IEEE Trans. Power Systems, May ’97
• D. Shirmohammadi, et al., “Cost of transmission transactions: An
introduction”, IEEE Trans. on Power Systems, Nov.’91
• D. Shirmohammadi, et al., “Some fundamental, technical concepts
about cost based transmission pricing”, IEEE Trans. Power
Systems, May ’96
• C. W. Yu, A. K. David, Pricing transmission services in the context
of industry deregulation”, IEEE Trans. Power systems, Feb.’97
• R. D. Christie, et. al., “Transmission management in the
deregulated environment”, Proceedings of IEEE, Feb 2000

27 Module-4 ECE666: Winter 2021

 Transmission Congestion
And
Firm Transmission Rights

28 Module-4 ECE666: Winter 2021

 What is Congestion?

• When power flows in the transmission network are

constrained by the network’s transmission limits, the
network is said to be congested.
• This restricts free movement of power and reduces market
competition
• Because cheapest generation cannot be used and more
expensive generation is substituted for it
• Congestion management is implicitly incorporated when
generation is dispatched at least-cost
• While incorporating line flow limits
• Such constraints lead to higher marginal costs which act as signals to the
utility for transmission investment
• Persistently high signals indicates new generation / transmission needs

29 Module-4 ECE666: Winter 2021

 Congestion Management: LMP Based Markets

• LMPs reflect locational values (to account for losses and

congestion)
• Function of network properties, best handled by Market
Operator
• LMPs are obtained as Lagrange multipliers from an OPF
(dc-OPF) performed to compute the market clearing
dispatch
• In the absence of binding network constraints, all LMPs will be
equal to say, π
• In the presence of binding constraints, reference bus LMP is
equal to π
• At all other buses the LMPs vary according to sensitivities of the network
flow constraints and the relative contribution of power injections at those
buses to the congested lines

30 Module-4 ECE666: Winter 2021

 Congestion Management: Bilateral Markets

• Market participants develop schedules that balance demand

and supply without a central entity like pool operator.
• For transmission congestion arising, ISO can resolve it using one
of many objectives from a least cost formulation to minimizing
possible adjustments to schedules.
• For Example: Objective is minimize total payments by ISO to-
• Increase injection at bus (∆P+)
• Reduce injection at bus (∆P-)
Minimize
[
J = C + ΔP + − C − ΔP − ]
subject to, Y' ⋅ ΔP + z ≤ z max
Δ = ΔP + − ∆P −
• C+ and C- are incremental / decremental bids submitted by generators/loads for re-
dispatch during congestion
• These are managed and procured through “Balancing service markets” .

31 Module-4 ECE666: Winter 2021

 Price Area Congestion Management

• When congestion is expected to appear, the system is

divided into bid areas separated by corridors
• This is usually declared by the ISO in advance of spot market
auctions, so that there will be self-adjustment of bid prices
(sell and buy)
• Each bidder (supplier and customer) submits separate bids for
each area
• Market is first resolved as uncongested, generation and
load in each price area is determined
• If transfer between areas do not exceed transmission limits,
then this solution, with one system wide market price is used
• If transfer exceeds limits, then each area is separately settled
using only the bids for that area and the transfer constraint

32 Module-4 ECE666: Winter 2021

 Price Area Congestion… contd.

• The market purchases energy equal to the transfer limit at

low price area price, and sells at high price area price
• The market receives income, sometimes called congestion
rental. However there is a limit on congestion income
• This is distributed to network users by corresponding reduction
in capacity charge portion of transmission tariff
• In low-price area (generation surplus area), the load
benefits from low price
• Generators in this area receive the same low price and do not
have any incentive to generate more
• In high-price area (generation deficit area), the generators
benefits from high price
• Customers in this area are subjected to the high price, which
acts a signal to reduce their demand

33 Module-4 ECE666: Winter 2021

 Example: Problems with Congestion Pricing

• Competitive area prices charge the customers more than

they pay the generators
• The congestion rent therefore, exceeds the cost of
generation re-dispatch caused by congestion
• Case-1: No transmission limit
• Case-2: 50 MW limit on transmission line

Remote Gen City Gen

A: 200 MW, $24/MWh C: 100 MW, $50/MWh
D: 150 MW, $25/MWh

1 2
50 MW limit

100 MW 200 MW

34 Module-4 ECE666: Winter 2021

 Example… contd.

• Case-1: No Limits: the two cheaper generators (A and D)

are scheduled to supply the total demand. System price is
$25/MWh, which is the marginal cost of Gen-D
• Total generation cost is $7300/h and customers pay $7500/h

Output levels, MW Producer Price, $/MWh Consumer

Cost Cost

Cases A ($24) D ($25) C ($50) Bus-1 Bus-2

↓

No limit 200 100 0 $7300 $25 $25 $7,500

50 MW 150 150 0+ $7350 $24 $50 $12,400

limit

35 Module-4 ECE666: Winter 2021

 Example… contd.

• Case-2: 50 MW Limit: Line limit causes the city to use all its
cheap generation (from D) + imports 50 MW and meets the
demand
• It is argued that Gen-C is the price setter in this case because,
for a small change in demand in the city, C would set the price
and complicate the market.
• So, a very small output from Gen-C is depicted here, to
highlight that situation, indicated by 0+, only enough, to set
the price at $50/MWh
• The generation cost is $7350/h
• Customer pays = 100MW x $24/MWh + 200MW x $50/MWh = $12,400/h

36 Module-4 ECE666: Winter 2021

 Example…contd.

• When line limit is imposed and congestion arises-

• Gen-D will not sell power for less than $50/MWh because
otherwise, Gen-C will capture the city market
• Gen-C will not sell for $51/MWh because other generators
(which may exist) can sell for less say, $50.5/MWh
• City cannot buy power from Gen-A because of no extra
Transmission Rights
• City price is therefore $50/MWh

37 Module-4 ECE666: Winter 2021

 Example …contd.

• The cost of fixing the congestion problem

• The increased generation cost from re-dispatch
• Case-1 generation cost = $7300/h
• Case-2 generation cost = $7350/h
• Re-dispatch cost = $50/h

• High cost to consumers of congestion prices

• Case-1 customers’ cost = $7500/h
• Case-2 customers’ cost = $12,400/h
• Customers increased cost = $4,900/h

• Congestion Rent
• (ρ2 - ρ1)xP12 = ($50/MWh - $24/MWh)*50MW = $1300/hr

38 Module-4 ECE666: Winter 2021

 What is an FTR?

• Financial Transmission Right

• Sometimes referred to as a “firm” transmission right
• Also known as Transmission Congestion Contract (TCC) or
Congestion Revenue Right (CRR)
• It is essentially a Financial Risk-Management Instrument

• Purchased right to hedge (insure) congestion charges on

constrained transmission paths
• Often provides FTR owners with the “right” to transfer an
amount of power (in MW) over a constrained line for a fixed
price
• Represents specified MW amount between (usually) two
points in transmission network
• Valid over defined period of time, typically month, season or
year, often only for peak or off-peak hours
• Associated with direction of power flow

39 Module-4 ECE666: Winter 2021

 What is an FTR? … contd.

• FTR’s primary purpose is to offset transmission user’s LMP

congestion charges
• Which are typically quite volatile

• Congestion occurring in FTR’s defined direction, earns

congestion revenue for its holder from the ISO
• Each FTR holder receives a congestion credit… based on
preferred schedules (congestion charges are based on
actual delivery)
(
FTR credit = amount of FTR × LMPextraction − LMPinjection )

• However, in today’s open FTR auctions and secondary

markets, FTRs can also be arbitraged by any accredited
transmission non-user

40 Module-4 ECE666: Winter 2021

 What is an FTR …contd.

• If a market participant does not hold a FTR and has a firm

contract, it will incur a congestion charge, which is normally
very volatile (highly fluctuating), with no mechanism to
offset the charge
• FTR is advantageous only when it is in the same direction
as the congested flow
• when LMPextraction > LMPinjection
• In some cases the FTR holder may have to pay for having the FTR when
LMPextraction < LMPinjection

41 Module-4 ECE666: Winter 2021

 Example: FTR Unconstrained Case

• PD2 has contracted 225 MW from PG1 and 135 MW from PG3
1
• It has an FTR of 225 MW on line 1-2

2
PMax = 225 MW

P12 = 150 MW
PD2 = 150MW PG1 = 150 MW, $15/MWh

PG3 = 0 MW, $20/MWh

PD3 = 0 MW

42 Module-4 ECE666: Winter 2021

 FTR Example… Unconstrained Case

• When PD2 is light loaded, there is no congestion. System

price is $15/MWh 1

• No congestion charges apply

2
PMax = 225 MW

P12 = 150 MW
PD2 = 150MW PG1 = 150 MW, $15/MWh

PG3 = 0 MW, $20/MWh

PD3 = 0 MW

43 Module-4 ECE666: Winter 2021

 FTR Example… Constrained Case (as Benefit)

• PD2 load is at peak, line 1-2 is constrained. Extra load has

to be supplied by PG_3
• LMP1 = $15/MWh, LMP2 = LMP3 = $20/MWh

2 1

PMax = 225 MW
P12 = 225 MW
PG1 = 225 MW, $15/MWh
PD2 = 300MW

P32 = 75 MW
3

PG3 = 150 MW, $20/MWh

PD3 = 75 MW

44 Module-4 ECE666: Winter 2021

 FTR Example… Constrained Case (as Benefit)

• PD2 will be charged for congestion

• Line 1-2: 225 MWh x (20 – 15)$/MWh = $1125
• Line 1-3: 75 MWh x (20 – 20)$/MWh = 0
• Total congestion charge = $1125

• Since PD2 obtained an FTR for 225 MW on line 1-2 and

energy delivery is consistent with the FTR direction, PD2
receives congestion credit
• Congestion credit: FTR x (LMP2 – LMP1)
• = 225 MWh x (20 – 15)$/MWh = $1125
• Net payment: Congestion charges – congestion credits
• $1125 - $1125 = $0

45 Module-4 ECE666: Winter 2021

 FTR Example… Constrained Case (as Liability)

• PD1 contracted 10 MW from PG2 for $20/MWh and owns a

10 MW firm transmission FTR from 2-1
• In real time, PD1 decides to buy from PG1

PG2 = 0 MW, $20/MWh

2 1 PG = 235 MW, $15/MWh
1
PMax = 225 MW

PD2 = 300MW P12 = 225 MW

PD1 = 10MW

P32 = 75 MW
3

PG3 = 150 MW, $20/MWh

PD3 = 75 MW

46 Module-4 ECE666: Winter 2021

 FTR Example… Constrained Case (as Liability)

• PD1 does not receive congestion charge because it is not

receiving energy through line 2-1
• LMP1 = $15/MWh, LMP2 = LMP3 = $20/MWh
• FTR credit = 10 MWh x (15 – 20) $/MWh
• -$50
• PD1 must pay $50 for this hour

47 Module-4 ECE666: Winter 2021

 Available Transmission Capacity

48 Module-4 ECE666: Winter 2021

 Transmission Line Loadability

• Thermal Limits- to avoid damaging conductors due to

annealing and to avoid excessive sag
• Limiting factor in lines less than 50 miles length

• Voltage Limits- acceptable value is 95-98% for normal

conditions
• Voltage collapse must be avoided for maximum credible
contingencies
• Limiting factor in lines 50–200 miles length, unless shunt
compensation is provided
• Stability Limits- power angle between sending and receiving
end buses is limited by dynamics of the regulating system
• δ should be in the range of 40° - 50°
• Is a limiting factor in long lines (> 200 miles in length)

49 Module-4 ECE666: Winter 2021

 Transmission Capability

• Total Transmission Capability (TTC)

• Measures the ability of the interconnected system to transfer
power reliably from one point to another considering ALL
transmission paths between them
• Is a network number, and is defined for a given sending area
and receiving area, for a specific time
• TTC = min{thermal limit, voltage limit, stability limit}

• Available Transmission Capability (ATC)

• Defined as the measure of the transfer capability remaining in
the physical transmission network for further commercial
activity, over and above already committed uses
• ATC =TTC – TRM – CBM – existing transmission commitments

50 Module-4 ECE666: Winter 2021

 ATC … contd.

• Transmission Reliability Margin (TRM)

• Transfer capability necessary to ensure that the interconnected
system is secure under a reasonable range of system
conditions
• Reflects the various sources of uncertainties in the system and
operating conditions
• Captures the need for operational flexibility
• Typically 5% of TTC

• Capacity Benefit Margin (CBM)

• The amount of transfer capability reserved by load-serving
entities to ensure access to generation from interconnected
neighboring systems to meet generation reliability
requirements

51 Module-4 ECE666: Winter 2021

 NERC Definitions: Recallability

• Right of transmission provider to interrupt all or part of

transmission service for any reason, consistent with
regulatory policy
• Non-recallable ATC (NATC):
• Has the highest priority use of the network
• NATC = TTC – TRM – Non-recallable Reserved transmission
Service – CBM
• Recallable ATC (RATC)
• RATC = TTC – TRM – Recallable Transmission Service – Non-
recallable Transmission Service – CBM
• Lowest priority use of the network

52 Module-4 ECE666: Winter 2021

 Scheduled / Reserved Transmission Service

• Reserved Transmission Service-

• Network capability is reserved but actual power transfer is not
yet scheduled
• Non-recallable Reserved Transmission Service (NRES)
• Recallable Reserved Transmission Service (RRES)

• Scheduled Transmission Service-

• A power transfer is scheduled to take place at a given time, for
which transmission service is reserved
• Non-recallable Scheduled Transmission Service (NSCH)
• Recallable Scheduled Transmission Service (RSCH)

53 Module-4 ECE666: Winter 2021

 Summary

• Four types of Transfer Capability as per NERC

• Total Transfer Capability (TTC)
• Available Transfer Capability (ATC)
• Recallable ATC (RATC)
• Non-recallable ATC (NATC)

• Four types of Transmission Services as per NERC

• Non-recallable Reserved (NRES) services
• Non-recallable Scheduled (NSCH) services
• Recallable Reserved (RRES) services
• Recallable Scheduled (RSCH) services

54 Module-4 ECE666: Winter 2021

 Example: ATC Determination

• For a power transfer from Area-1 to Area-6 the

entire transmission system is affected
• Each transmission line flow will change (shown by %)
• In proportion to the response of the line to the transfer
• Depending on network topology, generation dispatch,
etc.

Area-1 77% Area-3 11% Area-5

16 7% 1% 67% 11
% %

Area-2 16% Area-4 22% Area-6

55 Module-4 ECE666: Winter 2021

 Example… contd.

• In this case 77% of the power is transferred over the 1-3

interconnection
• For a 500 MW transfer between Area-1 and Area-6, the line 1-
3 will be loaded by 385 MW
• If there was an existing flow of 160 MW on line 1-3, this line
loading will now become 545 MW
• New Transfer on a Line = Base Flow + Additional Flows

56 Module-4 ECE666: Winter 2021

 Example… contd.

• Analysis of transmission flows within an area is required

• Flows within each area are not shown. But % shows the
transfer on the limiting facility within an area
• 12% of transfers between area-1 to area-6 are on the
limiting facility in area-3

Area-1 Area-3 Area-5

77% 11%
(2%) (12%) (8%)

16 7% 1% 67% 11
% %

Area-2 Area-4 Area-6

16% 22%
(4%) (15%) (5%)

57 Module-4 ECE666: Winter 2021

 Example… contd.

• Contract Path versus Parallel Path

• Power transfers may be scheduled between area-1 and area-6
using a Contract Path:
• Area-1 –>> Area-3 –>> Area-6
• In reality, power transfers will take place as per laws of
physics, and there will be power flows attributable to the
transfer between Area-1 to Area-6
• The power flowing on portions of the transmission system other than the
scheduled contract path, is known as parallel path flow or loop flow

58 Module-4 ECE666: Winter 2021

 Example… contd.

• Translation of System Impacts to ATC

• ATC of a network depends on existing load on the “limiting”
facility- wherever it might be
• Taking into account the outage scenarios for the most critical line or
generator
• (N-1) or (N-2) security criterion, as appropriate
• ATC is thus, function of how much of unused or unloaded
capacity available on the most limiting facility in the whole
interconnection

59 Module-4 ECE666: Winter 2021

 System or Network When power transfer between Area-1 to Area-6 takes place,
Path Response % the network response is first determined.

Area-1 2 This is obtained from a full scale power flow analysis by

super-imposing the injection in area-1 and extraction in area-
Area-2 4 6
Area-3 12
Area-4 15 The network response within each area is the % power
transfer over that particular transmission line within the area
Area-5 8 which is most limiting (meaning, having the lowest available
Area-6 5 capacity)
1-2 77
Therefore, from the table, looking at the “network response”
1-3 7 values, we can say, for a 100 MW power transfer between
1-4 16 area-1 and area-6, the most limiting line within area-3 will
carry an extra 12 MW over its base flow
2-4 16
3-4 11 Similarly, the most limiting line within area-4 will carry an
3-5 1 extra 15 MW
3-6 67
And, the line 3-6 will carry an extra 67 MW, etc…
4-6 22
5-6 11

60 Module-4 ECE666: Winter 2021

 System or Network Available Loading These numbers are only typical
Path Response % Capacity on Limiting values for example purpose.
Facility (ALC), MW
Area-1 2 35 The ALC is the unused capacity in
the individual facilities. For ALC
Area-2 4 92
within an area, it refers to the
Area-3 12 454 “most limiting facility”
Area-4 15 180
Area-5 8 200 The limiting line in area-3, which
was carrying an extra 12 MW for a
Area-6 5 250 100 MW transfer between area-1 to
1-2 77 1000 area-6, has ALC = 454 MW. Thus, a
total transfer of 454/0.12 = 3783
1-3 7 157 MW between area-1 and area-6,
1-4 16 440 will result in full utilization of the
ALC on this limiting line in area-3
2-4 16 512
3-4 11 198
Similarly, limiting line in area-4 will
3-5 1 18 allow, 180/0.15 = 1200 MW of
3-6 67 1072 transfer between area-1 and area-6

4-6 22 385
5-6 11 214

61 Module-4 ECE666: Winter 2021

 System or Network Available Loading System or Path System or Path
Path Response % Capacity on Limiting ATC, MW ATC are
Facility (ALC), MW determined by
dividing ALC by
Area-1 2 35 1750
Network
Area-2 4 92 2300 Response values,
Area-3 12 454 3780 as explained in
the previous
Area-4 15 180 1200 slide
Area-5 8 200 2500
Area-6 5 250 5000 The lowest
System / Path
1-2 77 1000 1300 ATC is Area-1 to
1-3 7 157 2240 Area-6 ATC
1-4 16 440 2750 = 1200 MW

2-4 16 512 3200

Dictated by ALC
3-4 11 198 1800 of Area-4, and
3-5 1 18 1800 network
response of
3-6 67 1072 1600
limiting line in
4-6 22 385 1750 area-4
5-6 11 214 1945

62 Module-4 ECE666: Winter 2021

 System or Network Available Loading System or Path Area-1 to Area-6
Path Response % Capacity on Limiting ATC, MW ATC, MW
Facility (ALC), MW
Area-1 2 35 1750
Area-2 4 92 2300
Area-3 12 454 3780
Area-4 15 180 1200 1200
Area-5 8 200 2500
Area-6 5 250 5000
1-2 77 1000 1300
1-3 7 157 2240
1-4 16 440 2750
2-4 16 512 3200
3-4 11 198 1800
3-5 1 18 1800
3-6 67 1072 1600
4-6 22 385 1750
5-6 11 214 1945

63 Module-4 ECE666: Winter 2021

 Example… contd.
MW
1200

Area-1 Area-3 Area-5

924 MW 132 MW
+ 24 MW on Limiting Line +144 MW on Limiting Line +96 MW on Limiting Line

19 84 12 804 13
2M MW M 2M
W MW
W W

Area-2 Area-4 Area-6

192 MW 264 MW
+48 MW on Limiting Line +180 MW on Limiting Line 60 MW on Limiting Line

MW
1200
64 Module-4 ECE666: Winter 2021
 References

• J. Lima, Allocation of transmission fixed charges: An overview, IEEE Transactions on

Power Systems, Feb.’94, pp.272-278
• H. Rudnick, et al., Marginal pricing and supplement cost allocation in transmission
open access, IEEE Transactions on Power Systems, May 1995, pp.1125-1132.
• J. Bialek, Topological generation and load distribution factors for supplemental charge
allocation in transmission open access, IEEE Transactions on Power Systems, August
1997, pp.1185-1193
• W. Ng, Generalized generation distribution factors for power system security
evaluations, IEEE Transactions on Power Systems, March 1981, pp.1001-1005
• H. Sing et al., Transmission congestion management in competitive electricity
markets, IEEE Trans on Power Systems, 1998, 672-680.
• D. Shirmohammadi, et al., Transmission dispatch and congestion management in the
emerging energy market structures, IEEE Trans on Power Systems, 1998, 1466-
1474.
• H. Glavisch, F. Alvarado, Management of multiple congested conditions in unbundled
operation of a power system, IEEE Trans on Power Systems, 1998, 1013-1019.
• R.D. Christie, et al., Transmission management in the deregulated environment,
Proceedings of IEEE, Feb 2000
• E. Bompard, et al., Congestion-management schemes: A comparative analysis under
a unified framework, IEEE Trans on Power Systems, 2003, 346-352.

65 Module-4 ECE666: Winter 2021