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Onsite Backup Generation and Interruption Insurance for Electricity Distribution

Joseph A. Doucet and Shinuel S. Oren

Year: 1991
Volume: Volume 12
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol12-No4-5
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Abstract:
This paper extends recent work on interruption insurance for electric power by introducing onsite backup generation capacity as a supplementary form of interruption insurance. The basic model of interruption insurance as a mechanism for differential pricing is reviewed, the incentive for providing onsite backup generation capacity is demonstrated and the interaction between onsite backup generation and interruption insurance is analyzed. Two types of onsite backup, customer and utility owned, are discussed. It is shown that individuals' economic incentives to install onsite backup generation dominate the utility's incentive. Hence customer owned onsite backup decisions will pre-empt the utility's plan to mitigate compensation payments by providing onsite backup generation.



Coordination of Non-Utility Generation Through Priority Purchase Contracts

Joseph A. Doucet

Year: 1994
Volume: Volume15
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol15-No1-11
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Abstract:
This paper proposes the use of priority purchase contracts as a means to coordinate utility purchases from non-utility generators. It is shown that differentiated contracts should have the potential for attracting more diverse, NUG proposals (in terms of technical and economic characteristics). It is also argued that differentiated contracts should permit better integration and coordination of NUG capacity since they come closer to mimicking the utility's resource allocation problem. Several areas for future research are suggested.





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