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multiple ownership of the transmission network. They are structural problems,

not physical problems. On the other hand, when a formerly nationalized grid
is deregulated and turned into a single, privatized network there are problems,
but they are not the problems that arise from the need to treat multiple
transmission owners on a fair and equitable basis.
Interutility transfers of energy are easily accomplished. Recall the computation of the area control error, ACE, in the chapter on generation control. A
major component of ACE is the scheduled net interchange. To arrange for the
sale of energy between two interconnected systems, the seller increases its net
interchange by the amount of the sale, and the purchaser decreases its net
interchange by a similar amount. (We ignore losses.) The AGC systems in the
two utilities will adjust the total generation accordingly and the energy will be
transferred from the selling system to the purchaser. With normal controls, the
power will flow over the transmission network in a pattern determined by the
loads, generation, control settings, and network impedances and configuration.
(Notice that network ownership is not a factor.)
The AGC scheme of Chapter 9 develops an autonomous, local control based
upon ACE. It is predicated (implicitly, at least) on the existence of a well-defined
control area that usually corresponds to the geographical and electrical
boundaries of one or more utilities. Interchanges are presumed to be scheduled
between utility control centers so that the net interchange schedule is well
defined and relatively stable over time. With many participants engaged in
transactions and, perhaps, private generators selling power to entities beyond
the local control area, the interchange schedule may be subject to more frequent
changes and some local loads may no longer be the primary responsibility of
the local utility. AGC systems may have to become more complex with more
information being supplied in real time on all local generation, load substations,
and all transactions. New arrangements may be needed to assign responsibility
for control actions and frequency regulation. Utilities have done these tasks in
the past out of their own self-interest. A new incentive may be needed as the
need for frequency and tie-line control becomes a marketplace concern; not just
the concern of the utility.
This chapter reviews the practices that have evolved in all-utility
interchange arrangements. This leads to a brief discussion of power pools
and other commercial arrangements designed to facilitate economic interchange. Many of the issues raised by the use of the transmission system
are unresolved issues that await the full and mature development of new
patterns for coordinating bulk power system operations and defining,
packaging and pricing transmission services. We can only discuss possible
There are evolving market structures that include nonutility participants.
These may include organizations that have generation resources, distributing
utilities, and consumers, usually larger industrial firms. In these areas, we must
venture into questions involving price. No transactions take place without
involving prices, even those between utilities. Disputes naturally arise over what