The objective of this project is to provide a sound theoretical foundation for pricing electric power system transmission reliability. This work will be based on the use of Jacobian singularity methods and energy function methods for the quantitative measurement of expected transmission marginal system outage costs in real time. Because the conditions leading up to major or total collapse of the power system are nonlinear, real-time prices at any one time and for the given system condition may be dominated by reliability costs. A major part of this research project will be the development of methods for assigning economic values to reliability indices. The fundamental aim will be to match the dimensions of the reliability indices with the dimensions of reliability for which outage costs can be estimated.
