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Wholesale costs include initial capital, operations & maintenance (O&M), transmission, and costs of decommissioning. Depending on the local regulatory environment, some or all wholesale costs may be passed through to consumers. These are costs per unit of energy, typically represented as dollars/megawatt hour (wholesale).
In exchange for transmission service, transmitting utilities are allowed to charge the customer costs associated with the access to their transmission network. The cost for TSR is determined by a formula contained in the OATT and is often in the units of dollars per megawatt per year.
In electric power transmission, wheeling is the transmission of power from one system to another through the third-party interconnecting network. [1] [2] [3] The wheeling provider, or utility, receives compensation for the service and for electricity losses incurred in the transmission.
Long-distance transmission (hundreds of kilometers) is cheap and efficient, with costs of US$0.005–0.02 per kWh, compared to annual averaged large producer costs of US$0.01–0.025 per kWh, retail rates upwards of US$0.10 per kWh, and multiples of retail for instantaneous suppliers at unpredicted high demand moments. [23]
Ancillary services are the services necessary to support the transmission of electric power from generators to consumers given the obligations of control areas and transmission utilities within those control areas to maintain reliable operations of the interconnected transmission system.
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