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Integrated Local Transmission and Distribution Planning Using Customer Outage Costs

Changing regulatory incentives in the electric power industry are forcing utility transmission and distribution (T&D) planners to change their approach to investment planning. To minimize the risk of over-investment, utilities need to perform an analysis of system capacity limitations which goes beyond traditional peak load and temperature planning, and routinely consider a variety of alternate incremental capacity expansion measures. Existing engineering tools are inadequate for determining the potential cost advantage of deferring an expansion, or for evaluating the net benefits of distributed resources (DR). Conversely, integrated resource planning (IRP) tools often underestimate or ignore important DR siting restrictions and operational impacts. This paper describes a process to identify T&D capacity constraints, evaluate conventional and alternative capacity additions and DR applications, and explore the risk of operating beyond limits imposed by current reliability practices. The process uses hourly load-flow information to quantify the total annual energy and customer outage costs. The same information is used to build plans incorporating and dispatching DR where they have the greatest impact on minimizing expansion needs. A detailed case study demonstrates the process by quantifying the economic benefits of deferring an expansion with a do-nothing plan. The study reveals both unforeseen advantages and impracticalities of DR use.

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Energy Specializations: Electricity – Transmission and Network Management; Electricity – Local Distribution; Electricity – Policy and Regulation

JEL Codes:
D44 - Auctions
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General

Keywords: Electricity, local transmission, distributed generation, reliability planning

DOI: 10.5547/ISSN0195-6574-EJ-Vol18-NoSI-7

Published in Volume 18, Distributed Resources: Toward a New Paradigm of the Electricity Business of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.