IEEE Power & Energy Magazine - May/June 2016 - 68
The layered optimization paradigm represents a
substantial break from today's models of DER participation
in the future grid and the wholesale market.
like the investor-owned utilities in Texas, and as such may
be the entity that enforces supply adequacy requirements on
load-serving entities within each of its LDAs. This could lead
to a new resource adequacy paradigm based on bifurcated
jurisdiction: the federal-jurisdictional ISO/RTO enforces
resource adequacy for load-serving entities in its footprint
commensurate with their shares of net system demand measured at the T-D interfaces, while the state-jurisdictional
total DSO enforces resource adequacy for load-serving entities commensurate with their net load within each LDA.
that are mostly subject to federal jurisdiction under the Federal Power Act. Federal and state policy makers seeking to
develop DSO-operated transactive markets should consider
how this provision might be modified legislatively to allow
state regulation of transactions that are completely within a
single LDA and thus do not rely on the transmission system.
This could enable states to regulate total DSO transactive
markets and thereby facilitate their wider adoption nationally.
A third key element involves developing shared accountability for reliability between the TSO and the total DSO. If
the TSO optimizes only to the net interchange at each T-D
interface while the DSO performs supply-demand balancing within each LDA, as per the layered paradigm, then the
regulatory framework for the DSO must assign responsibility and accountability for reliable service to the end-use
customer in a manner that goes beyond reliable distribution
wires service. This may play out differently in different
states. One possible scenario is where the DSO is also a loadserving entity with provider-of-last-resort responsibility, as
is the case with most restructured distribution utilities today.
Another possibility is that the DSO is a pure wires company,
To date, industry discussions about the future TE system with
high DERs implicitly assume, at least for ISO/RTO regions,
a version of the grand central, minimal DSO paradigm. This
would be a straightforward extension of how demand response
participates in wholesale markets today. Probably for this reason, and for lack of a well-specified alternative, its implementation challenges and potential shortcomings have not been
seriously probed. But implicit unquestioned assumptions in the
design of a complex system like electricity can have disastrous
Forecasted Bulk Supply
Tertiary Control via
The Way Forward
figure 1. The whole system TE model.
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