9634255 Ilic Electric power systems in the United States and many other parts of the world are undergoing drastic restructuring. The trend is toward deregulating an industry that has traditionally been a regulated monopoly to allow for economic competition. Much confusion arises in discussing technical and economic concepts supporting the two extremes of industry structure. At one extreme, some advocate preserving and building upon the present technical framework and standards for operating an interconnected system while yet accommodating competitive non-utility-owned generation. At the other extreme are those who believe electric power systems should be restructured based entirely on economic competition. A change of thinking is needed in both engineering and economic circles to put the debate in a meaningful framework, which is essential for ensuring that, whichever industry structure prevails, basic principles of technical operation as well as the free market economy are met. This is a tall order for researchers concerned with large dynamic electric power systems. The issues are system-theoretic in their basic nature. True, researchers with a strong back-ground in large systems could identify many new theoretical issues and their solutions within the context of existing problems directly relevant to the power industry. But in order to avoid technical assumptions that may not hold in all cases, one needs a systematic framework for posing these problems. In this project, we will use much of our acquired knowledge as the starting point to further study the problems of hierarchical controls in a changing electric power industry. In what follows, we describe the importance of the envisioned control structures in a changing industry, and propose several specific problems that will be studied. ***
