Accommodating Uncertainty in Planning and Operations

Restructuring in the electric power industry raises a fundamental question: how will the sweeping transformations caused by restructuring affect the reliability of the nation's electricity grid? In the past, utilities traditionally provided a complete, or bundled, set of power-related services and maintained reliability under an obligation to serve in exchange for market privileges such as a monopolistic franchise. In the future, many of these power-providing institutions will evolve into new business entities, fragment into independent organizations, or cease to exist as new participants enter the emerging, competitive environment. Reliable electric power, according to many analysts of the coming changes, will become a graded commodity for sale at variable levels of quality and cost. This report discusses uncertainties that are not captured in the planning process used by utilities in a regulated environment and it also discusses emerging uncertainties as the electric industry undergoes restructuring. In latter sections, the report identifies technologies/methodologies that can be developed and employed to accommodate or manage these uncertainties to ensure reliable electric power. We briefly discuss market-supplied solutions to planning, operations, and reliability issues.