As the industry environment transforms from a completely regulated setting to a broader, deregulated marketplace, new market participants must understand planning and operations of power systems to effectively participate in markets. This industry overview provides a description of utility operations and traditional planning, and then explains asset management, investment analysis, and risk management within the context of a market environment. Written to provide a broad, working knowledge of the industry, Electric Power Planning for Regulated and Deregulated Markets: Includes descriptions of generation and transmission network equipment Provides an overview of the regulatory framework, system design and systems operations for ensuring reliable delivery of power Presents system planning across different time horizons with the objective of minimizing power production costs Explains the principles and architecture of a market environment coupling operational imperatives with financial transactions Addresses approaches of various participants, including power producers, retailers, and integrated energy companies toward bidding in day ahead markets, managing risks in forward markets, portfolio development and investment analysis Provides numerous examples addressing cost minimization, price forecasting, contract valuation, portfolio risk measurement and others Examines past news events and explains what went wrong at Three Mile Island, the Northeast blackout of 2003, and the California energy crisis This is an ideal reference for professionals in the public and private power service sectors such as engineers, lawyers, systems specialists, economists, financial analysts, policy analysts, and applied mathematicians.

As the industry environment transforms from a completely regulatedsetting to a broader, deregulated marketplace, new marketparticipants must understand planning and operations of powersystems to effectively participate in markets. This industryoverview provides a description of utility operations andtraditional planning, and then explains asset managementinvestment analysis, and risk management within the context of amarket environment. Written to provide a broad, working knowledgeof the industry, Electric Power Planning for Regulated andDeregulated Markets:* Includes descriptions of generation and transmission networkequipment* Provides an overview of the regulatory framework, system designand systems operations for ensuring reliable delivery of power* Presents system planning across different time horizons withthe objective of minimizing power production costs* Explains the principles and architecture of a marketenvironment coupling operational imperatives with financialtransactions* Addresses approaches of various participants, includingpower producers, retailers, and integrated energy companies towardbidding in day ahead markets, managing risks in forward marketsportfolio development and investment analysis* Provides numerous examples addressing cost minimization, priceforecasting, contract valuation, portfolio risk measurement andothers* Examines past news events and explains what went wrong at ThreeMile Island, the Northeast blackout of 2003, and the Californiaenergy crisisThis is an ideal reference for professionals in the public andprivate power service sectors such as engineers, lawyers, systemsspecialists, economists, financial analysts, policy analysts, andapplied mathematicians.

Preface xiAcknowledgments xvFigure Citations xviiAbout the Author xix1. Overview 11.1 The Power Delivery Chain in a Vertically Integrated Utility 11.2 The Power Delivery Chain in a Market Environment 32. Energy, Load, and Generation Technologies 72.1 Energy, Power, and their Measurements 72.2 Load 142.3 Generation Technologies 213. The Grid 493.1 Fundamentals: Load, Generation, and Alternating Current 493.2 Grid Equipment 563.3 Grid Reliability and Contingency Requirements 643.4 Grid Configuration 673.5 Grid Operations 723.6 Blackout August 14, 2003 764. Short-Term Utility Planning 814.1 Planning and Execution of Dispatch: Day-Ahead Planning Through Real-Time Delivery 814.2 Day-Ahead Demand Forecasting: Load and Ancillary Service Requirements 844.3 Least-Cost Dispatch in a Single Control Area: A Simple Model 894.4 A Solution Using Profit Maximization 954.5 Least-Cost Dispatch in a Single Control Area with Operating Constraints 994.6 Least-Cost Dispatch in a Single Node with Spinning Reserve and Regulation 1114.7 Least-Cost Dispatch in a Network 1134.8 Real Time 1205. Long-Term Utility Planning 1225.1 Project Development 1225.2 The Planning Process 1275.3 Long-Term Load Forecasting 1295.4 A Simplified Look at Generation Capacity Additions 1315.5 Generation Additions and Retirements Within a Single Control Area 1435.6 Generation Additions and Retirements with Transmission to a Single Control Area 1475.7 Generation Additions and Retirements and Transmission Additions Within a Network 1485.8 Reserve Reuqirements 1516. Midterm Utility Planning 1526.1 Informational Requirements 1526.2 Formulation of the Optimization Problem 1567. A Market Environment 1617.1 Principles and Architecture 1617.2 Short-Term Market Design: Day-Ahead Scheduling Through Real-Time Delivery 1647.3 Long-Term Market Design: No Clear Solutions 1707.4 Midterm Market Design 1738. Asset Management in Short-Term Markets 1808.1 Retailers 1808.2 Power Producers 1838.3 Integrated Energy Companies 1899. Investment Analysis: Long-Term Planning in a Market Environment 1929.1 Investment Setting in Utility and Market Environments 1929.2 Project Analysis for a Merchant Plant 1939.3 Power Purchase Agreements (Long-Term Contracts) 20210. Risk Management in the Midterm Markets 21110.1 Retailer Risk 21110.2 Power Producer Risk 21410.3 A Quick Risk Primer in Statistics for Risk Management 21510.4 Risk Management in Midterm Markets: Retailers 22910.5 Risk Management in Midterm Markets: Power Producers 25210.6 Risk Management in Midterm Markets: Integrated Electricity Suppliers 27411. The California Experience 27811.1 Market Fundamentals 27911.2 Short-Term Market Structure: The CALPX, CAISO, and Other Market Participants 28111.3 Fatboy, Get Shorty, Ricochet, and Death Star 28611.4 Market Contrast: PJM and California 288Bibliography 291Index 294