Issues for reactive power and voltage control pricing in a deregulated environment

This paper addresses issues related to reactive power, voltage support and transmission losses as dictated from a certain class of electric loads. Specifically, it addresses the impact of predominantly induction motor loads on voltage support, reactive power requirements, and transmission losses. These issues are examined with a model which explicitly models the induction motor mechanical load. Simulation results on a simplified electric power system are presented. The results are utilized to propose a pricing structure for voltage and reactive power support. The basic assumption of the paper is that, in a deregulated environment, the expense of the incremental requirements for voltage control should be charged to the member causing the additional requirements. Alternatively, the results can be used to justify long term pricing agreements between suppliers and customers.