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Valuing Transmission: Reliability, Congestion, and Uncertainty

This paper investigates how the relationships between congestion, reliability, and uncertainty affect how electrical grid users value transmission system upgrades. The role that uncertainty plays in grid users' valuations of many of the congestion and reliability benefits of upgrades is emphasized. Why many popular methods of transmission system expansion do not properly value upgrades is demonstrated. Finally, the paper explains the need for a market structure that better captures how grid users actually value transmission.