DEVELOPMENT OF AN EFFICIENT DISTRIBUTION NETWORK PRICING MODEL

Abstract

Restructuring of a vertically integrated utility involves the separation of generation, transmission and distribution sectors. The primary motivation for the separation of these utilities is the desire to foster competition and thus, drive the cost of electricity down while enhancing supply quality and reliability. Distribution network is the gateway for interaction between power supply agency and consumers, mostly of low and medium voltage categories. So, the distribution network allows flow of power from Grid Supply Points to the end users. Distribution network, being recognized as a natural monopoly, is regulated and the tariff levels are set by the Electricity Regulatory Commissions. The distribution network in most of the countries is owned, operated and controlled by either the State Electricity Boards or the private companies. In lieu of providing access to the retail suppliers, the distribution utility expects certain remuneration for the service provided. The remuneration should recover the costs incurred by the distribution utility i.e., operation and maintenance expenses and a reasonable return on its capital employed. Most of the distribution utilities worldwide follow the Distribution Reinforcement Model developed by Boley and Fowler for evaluating the Distribution Use of System Charges. The yardsticks obtained from the Distribution Reinforcement Model are same for all the consumers at a certain voltage level irrespective of their location, which is unfair. The short distance customer subsidizes the long distance customer. To fairly allocate the charges to consumers, a model based on marginal cost theory was developed. In this dissertation work, the Distribution Reinforcement Model and the Power Flow based Models, namely Asset Utilization Model and Marginal Perturbation Model, were developed using MATLAB 7.0.1 platform and it was validated with a designed 89-node distribution network. Distribution Use of System Charges were also evaluated for both generation and demand customers by placing Distributed Generators at relevant locations in the designed 89-node distribution network.