Power system security and reliability aspects under SMD: the New York experience

The challenge of restructuring in the electricity industry is the creation of competitive markets while at the same time maintaining system reliability. Under the existing Independent System Operators (ISOs), as well as is intended under SMD, security and reliability considerations are inextricably intertwined with market systems that are used to commit and dispatch the power system, together with market power considerations. Reliability means the lights must stay on. Competitive markets means that the exertion of market power must be mitigated. The interrelation comes from the understanding that reliability constrains economics and if there is ever a conflict, as for example during a system emergency, reliability takes precedence over economics. Market power is of special relevance because electricity is a social product that society cannot easily reduce consumption.