A multi-attribute evaluation framework for electric resource acquisition in California

In the competitive environment in which US utilities operate, auctions are becoming an accepted means for procuring resources to meet utilities' projected needs. The rationale for instituting auctions is to effectively harness the competitive forces in electricity resource markets in order to implement least-cost planning objectices. PG&E, in cooperation with the other California investor-owned utilities. Southern California Edison and San Diego Gas and Electric, has developed a multi-attribute auction framework for the procurement of future resources. The framework uses the attributes of capacity and energy price, dispatchability, location, start date flexibility, price diversity, project viability and environmental impacts to evaluate customer benefits. This allows comparability between and tradeoffs among attributes. Other key features include the use of multiple scenarios to explicitly account for fuel price and load growth uncertainty, the explicit evaluation of long-term impacts and dynamic operating benefits of dispatchability, and the use of portfolio theory for the evaluation of price diversity. The bidding evaluation also uses optimal power flow derived loss adjustment factors and incremental network reinforcement costs and takes into account uncertainty in determining start-date flexibility. The framework is sufficiently general to be usable not only for auctions, but also for utility evaluation of maintenance, power contracts and other investment decisions. This paper describes the framework and its implementation into a PC spreadsheet software package.