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Publication Details
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| T024700 5114 |
2003 |
PQIG |
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Establishing Power Quality Guidelines
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This report identifies risks associated with power quality contracts that are based on system-wide guaranteed performance, and also provides a framework for assessing this risk. A PQ contract based on an incentive/penalty scheme tied to performance exposes a utility to financial and other risks. However, this risk can be minimized when the inherent year-to-year variability in PQ parameters, such as voltage interruptions (sustained and momentary) and voltage sags, is adequately addressed.
The global trend in PQ contracting appears to be moving away from “premium power” type guaranteed contracts towards a penalty/incentive scheme for system-wide performance in terms of frequency and duration of sustained voltage interruptions and frequency of momentary voltage interruptions. These type of contracts fall under the general category of performance based rates (PBR), which is gaining increased attention and interest throughout the world.
A statistical method of risk assessment equips utilities with tools to establish more appropriate benchmarks and dead bands within a PBR scheme. This, in turn, minimizes the financial exposure that may arise for a utility when the inherent variability in year-to-year performance of PQ parameters, such as voltage interruptions and voltage sags, is not factored into contracts. The guidelines provided in the report will enable a utility to establish an improved framework for a contract that minimizes this intrinsic risk.
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