A Power Quality Pricing Method Based on Risk Management in Deregulated Electricity Retail Market

In the deregulated electricity market, power quality (PQ) service can be regarded as an ancillary service which can be tailored according to user’s individual demands. In this paper, a pricing method of PQ service is introduced with voltage dip and harmonic as examples. Firstly, with quality risk management taken into consideration, the mathematical model to pricing tailored PQ service is established. Then the method to calculate compensation criterion for possible situations is presented when PQ fails to meet the expected performance. In this way, both power sale companies and users are motivated to promote PQ level. Finally, case study results show that this method can meet the needs of users, realize the 1isk transfer and also enable the power sale companies to make profits.