Transmission planning, investment, and cost allocation in us iso markets

Abstract

Independent system operators (ISOs) plan the electric power transmission system over large geographic areas. A wide range of modeling tools is available, including production cost planning models, large-scale optimization models, and reliability models. Each model addresses different aspects of the optimal planning process. This paper reviews the current approach for transmission planning and investment in a competitive environment and presents a modeling approach for regional planning and investment in a competitive generation environment. The framework proposed can be used in an auction to award investment contracts or as a part of a more detailed policy analysis. The result yields the set of transmission projects that have the highest expected benefits, while also representing generic generation expansions.