Markets and pricing for interruptible electric power

Abstract

A market is proposed for interruptible, or callable, forward contracts for electric power, in which the consumer grants the power supplier the right to interrupt a given unit of load in return for a price discount. The callable forward contracts are traded continuously until the time of use. This allows recourse for those customers with uncertain demand, while risk-averse consumers can minimize their price risk by purchasing early. Callable forward contracts are simple in form and can be directly incorporated into the utility's economic dispatch procedure.< <ETX xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">&gt;</ETX>