IEEE Power & Energy Magazine - May/June 2016 - 47

Moving Toward Distribution
System Operators

emergency controls of the distribution system or its subsystems. Some of its functions include fault location isolation
and service restoration (self-healing), volt/var optimization,
online power flow, and switch-order management. However,
the DER integration will have significant impacts on the
DMS functionalities and algorithms. A DSO will be able to
cope with such challenges and provide new functionalities
that will increase systemwide efficiency. The functions of a
DSO may be categorized into grid operator functions and
market operator functions.
✔✔ Grid operator functions: A DSO will be responsible
for conducting operational security studies, addressing loading or voltage issues through switching or other operational actions, respond to outages, and direct
restoration efforts. (See Figure 1.) Moreover, a DSO
will process interconnection requests and act as the
balancing entity for load and generation.
✔✔ Market operator functions: A DSO will coordinate
the electricity purchase and sale, the interchange of
power to other markets, and control resource output.
To implement these functions, some upgrades to current distribution systems are required. More specifically, the
current data measurement and collection schemes need to
be updated to model existing DERs, provide the capability
to switch protection settings online, and exploit the general
packet radio services' communications that is increasingly
built into inverters for the purposing of monitoring DER performance, to name a few.
In general, a DSO might behave as the interface between
DERs or other entities that may produce energy or curtail
load and ISO/RTOs. (See Figure 1.) In this regard, a DSO
will provide the ISO/RTO with information such as net
load forecast and dispatchable products, schedules and bids,
metering, and telemetry. (See Figure 2.) The ISO/RTO will
send the DSO the schedules of the generating units, dispatch
instructions, prices, and settlements.

Ongoing DSO Efforts
A thoroughly developed DSO model does not yet exist.
However, several utility business models and regulatory
frameworks are starting to evolve to accommodate the
changes in the distribution grid and enable a more integrated plug-and-play electricity system. In the United
States, the majority of advances in this area (at the state
regulation and policy level) are underway in five states:
may/june 2016

New York, California, Hawaii, Massachusetts, and Minnesota (Figure 3).
New York has taken steps in this area with its Reforming
the Energy Vision initiative, which requires the establishment of a distribution system platform provider that could
track, trade, and forecast distributed energy assets (http://
www3.dps.ny.gov/W/PSCWeb.nsf/All/CC4F2EFA3A23551
585257DEA007DCFE2?OpenDocument). California is overhauling its grid regulations to accommodate a large number
of DERs. Most of these DERs are photovoltaic (PV) installations that are (or will be) integrated into transmission and
distribution (T&D) grids to achieve the state's 2030 Renewable Portfolio Standard (RPS).
Hawaii has seen an increase in rooftop PV installations,
to the point where some feeders are experiencing reverse
power flow conditions because installed PV output is larger
than daytime feeder loads. To address this problem and at the
request of the state's Public Utilities Commission, investorowned utilities are developing grid-scale energy storage projects to address impacts caused by PV proliferation and help
achieve the state's 100% RPS goal (http://puc.hawaii.gov/
news-release/puc-receives-the-heco-companies-action-plansto-achieve-state-energy-goals/). Massachusetts has taken a
different and more fundamental approach, given its current
status regarding DERs. It is currently requiring its utilities to
include smart metering and time-of-day pricing in its planning for the future distribution system (http://www.masscec.
com/audience/clean-energy-industry). Minnesota is dealing
with potential PV proliferation by enacting a value of solar
tariff that accounts for multiple impacts of distributed PVs
when assessing its value to the utilities and to the customers
(http://ilsr.org/wp-content/uploads/2014/04/MN-Value-ofSolar-from-ILSR.pdf).

DSO Market Models
There are several market models that a DSO may use in the
formulation of the energy market. In particular, three models are explained: 1) single-sided market clearing, 2) twosided market clearing, and 3) transactive energy.

Single-Sided Market Clearing
The single-sided model [Figure 4(a)] is directly analogous to
the market models adopted in the 1998-2000 time frame by
ISOs/RTOs. In this model, the demand side is represented by a
single load, obtained from a forecast, for each clearing period
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Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - May/June 2016