Black-Start in a Market Howard F. Illian, President Energy Mark, Inc. July 23, 2002
Vertically Integrated Utility All business functions necessary for delivery of Black-Start are contained and coordinated from within a single VIU. Cost-Plus Regulation insures that all of the costs associated with delivery of the Black-Start Service are recovered.
Restructured Industry Technical Requirements for delivery of the Black-Start Service are the same. Coordination of many independent businesses is required to deliver the Black-Start Service. Compensation for many independent businesses is required to motivate them to deliver the Back-Start Service.
Commodity Services Most Ancillary Services can be defined as commodities. Commodity Services are deliverable from many market participants. Limited competition for delivery of the Black-Start Service components makes them unsuitable commodities.
NERC Reliability Model The Players NERC Compliance Monitor Security Authority Interchange Authority Balancing Authority Transmission Service Provider Transmission Owner Transmission Operator Distribution Provider Generator Load Serving Entity Purchasing Selling Entity
Black-Start Delivery Players The Players NERC Compliance Monitor Security Authority Interchange Authority Balancing Authority Transmission Service Provider Transmission Owner Transmission Operator Distribution Provider Generator Load Serving Entity Purchasing Selling Entity
Compensation Components Revenue Requirements Planning Expenses Equipment Investments Maintenance Expenses Training Expenses Simulation Expenses Testing Expenses Practice Drill Expenses Additional Risk of Damage Service Delivery Expenses Other Stand-Ready-to-Supply Expenses
Conclusions Restructuring has not increased the complexity of the technical problem. Restructuring has increased the complexity of the business problem. Both the technical and the business problems must be effectively solved to deliver the Black-Start Service in a Market.
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