Load service probability differentiated nodal pricing in power systems

The study proposes a novel set of locational load service probability (LSP) indices using the concept of domains and commons and generators' contributions to the loads. An isolated bus configuration is developed for each individual load bus and the commonly known reliability index ' the loss of load probability (LOLP) index, is now re-defined based on location. The locational LSP indices can be determined from the locational LOLP indices. These indices are thereafter incorporated into the locational marginal prices (LMPs) in order to arrive at an appropriately modified set of LMPs that take into account the LSPs at different load buses in the system. This way, the customers located at a load bus are fairly priced, taking into account the LSP they receive from the system operator. The traditional LMPs are thereby modified to include the LSP of a customer at a bus.