An Analysis of Electric Power Brokerage Systems

The purpose of electric power brokerage systems, such as the one established in Florida, is to reduce the aggregate cost of generating electricity by making short-term transfers of electric power between utilities (economy energy exchanges). However, the methods currently used to determine the buyers and sellers, and the quantities exchanged, can be improved to increase the savings. Two new algorithms are presented that result in greater savings to the utilities--a network flow algorithm applicable to the Florida system, and a more general algorithm using a version of dynamic programming. The effects of several methods of dividing the savings among the utilities are discussed. Finally, some initial ideas are presented on how an energy broker can be extended to longer time periods.