Contract paths, phase-shifters, and efficient electricity trade

Phase-shifting power transformers offer the opportunity to partially control the load flows in an electricity network. In the US electricity industry, these devices currently operate under decentralized private ownership. This pattern, coupled with a commercial trading regime based on the contract path concept, creates potential inefficiencies. This paper illustrates the basic interactions in a simple four node model, based broadly on conditions in the WSCC region. In addition to the potential inefficiencies of decentralized phase-shifter operation, the authors also show how they can enhance the overall utilization of the network. They compare regulatory approaches to managing these issues with more extensive structural reform of electricity trade.