Optimization-based inter-utility power purchases

Power transactions are important activities among electric utility companies. Effective transaction decisions can result in significant savings since marginal generation costs of neighboring utilities could be quite different. Transactions, however, are coupled with the scheduling of units through system demand and reserve requirements, and are confined by many accustomed rules. How to make effective transaction decisions is therefore a very difficult problem. In this paper, an optimization-based method for the integrated consideration of power purchase transactions and the scheduling of thermal units is presented based on the augmented Lagrangian decomposition and coordination method. Numerical testing results based on modified Northeast Utility´s data show that the proposed algorithm is efficient, and significant savings can be obtained