A method for calculating production costs for ancillary generation services

摘要

Federal Energy Regualtory Commission order 888 required the unbundling of transmission services (such as ancillary services) offered by regualted utilities. Utilities have been struggling to determine a method by which a fair and reasonably equitable rate can be assessed to third parties requesting the use of the utilities' transmission services. This paper describes a generic methodology for determining the cost of production of several hydro generation related ancillary services (products). This method is not intended to determine a commercial rate to be charged for these products. The costs include only those necessary to deliver the products to the generator high-side bus bar or tie line. The services for which cost of production are calculated are: regulation, spinning reserve, non-spining reserve, replacement reserve, voltage support, and black start. The methodology is first applied to a system with only one unit. The values of unit utilization are calculated and total power cost applied to the results. The methodology is then applied to a more complicated system involving multiple units with varying operating parameters and multiple plants. Special considerations to ensure a consistent application are discussed for some cases in which the methodology could give unusual results.