Issues for reactive power and voltage control pricing in a deregulated environment

Issues related to reactive power, voltage support and transmission losses as dictated from a certain class of electric loads are addressed. Specifically, the impact of predominantly induction motor loads on voltage support, reactive power requirements, and transmission losses is examined. These issues are examined with a model, which explicitly models the induction motor mechanical load. Simulation results on a simplified electric power system are presented. Based on these results, a pricing structure for voltage and reactive power support is proposed. The basic assumption of the paper is that, in a deregulated environment, the expense of the incremental requirements for voltage control should be charged to the member causing the additional requirements. The results of this work can also be used to justify long-term pricing agreements between suppliers and customers. (C) 2001 Elsevier Science B.V. All rights reserved.