Application of auctions as a pricing mechanism for the interchange of electric power

Abstract

The expected move to a market-based electric power industry will significantly change electric utility operations. These changes will fundamentally alter the pricing of electric power. How this pricing will be accomplished is a key issue. Traditionally, embedded cost based methods have been used. Spot-pricing has received attention as a possible approach in a market-based electric power environment. Another market-based approach is the use of auctions. This paper presents the application of a sequential sealed-bid and sealed-offer auction to the pricing of electric power by using linear programming.< <ETX xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">&gt;</ETX>