J. Rivier

Distribution and power quality regulation under electricity competition. A comparative study

Most electrical sector restructuring involves introducing competition in electricity generation and retail. However, transmission and distribution network activities will continue being regulated. The regulation of distribution is evolving from a traditional approach based on cost-of-service regulation, where distribution was bundled to the rest of utility activities, to a more competitive unbundled regulation based on incentives for improving efficiency, known as performance-based ratemaking (PBR) regulation. This new regulation retains strict control over service tariffs by establishing price or revenue caps during a multi-year (two-to-five years) regulatory period. Utilities have the opportunity to earn higher profits by cost reductions and efficient management. However, most utility regulators have emphasized the importance of quality control mechanisms because cost reduction incentives may lead to a progressive degradation of the quality of service. This paper revises practical implementations of PER mechanisms for distribution and power quality regulation. Experiences in England and Wales, Argentina, Norway, California, and Spain, are compared.

Regulation of distribution system operators with high penetration of distributed generation

The increase of distributed generation (DG) in distribution networks is an important challenge for distribution system operators (DSOs). DG integration not only impacts on DSO short-term costs but also involves new risk uncertainty regarding system reliability, security and network planning. Therefore, because DSO is mainly a regulated business, it is clear that new regulatory mechanisms should be designed. This paper analyzes how the traditional model of DSO regulation is impacted by increasing penetration of DG. A set of proposals on how this model can be improved are presented. Finally, some guidelines on regulatory improvements for the transition between the current and future situation with high penetration of DG are recommended.

A conceptual framework for power quality regulation

A new restructuring and regulatory process is taking place all over the world in the electrical sector. While competition is being introduced in generation and retail, network distribution activity is still considered a natural monopoly that needs to be regulated. New distribution regulatory schemes of the type of performance-based regulation, such as price caps or revenue caps, have been proposed. These models provide strong incentives for cost reduction. As a consequence, reliability, highly related to investment and maintenance practices in utilities, may suffer considerable deterioration. On the other hand, as society is becoming more sensitive to technical power quality problems, regulators are looking to control voltage quality aspects. This paper presents the theoretical aspects of a complete power quality regulation to be implemented under the new situation of distribution companies. Practical implementation issues are also discussed.

Optimal strategies for selling wind power in mid-term energy auctions

Due to the environmental pollution and the emission of CO2 of conventional fossil-fueled power plants, renewable energy sources are becoming an important part of the generation mix in many electricity markets. For example, in the Spanish market, during the day March 27th 2008, wind power covered the 24% of the daily demand. This is a consequence of the active role that wind producers have taken in the Spanish system by participating both in the day-ahead spot market and in the base-load energy auctions organized to cover a percentage of the demand of the distribution companies. This panel-session paper presents the basic ideas of a more detailed paper under development, and its main objective is to find the optimal strategy of a wind producer to sells its energy in mid-term demand procurement auctions subject to price and production uncertainty.

Practical experience of benchmarking to estimate distribution companies' revenues

This paper presents a complete overview of a practical process to estimate regulated distribution-companies (DISCOS) revenues. An international benchmarking method is used to compare the performance of three DISCOS to the performance of a set of utilities that have been selected as a reference. Advantages and disadvantages of the applied method are shown.