Evaluation of Increased Discretization of Real-Time Locational Marginal Prices on Customer-Optimized Distributed Generation

This article presents an economic model for customer-owned and operated distributed generation facilities operated according to net metered, real-time pricing (RTP). Previous research has demonstrated that within traditional billing and rate structures customer-optimized distributed generation facilities create quantifiable losses for distribution and generation and transmission utilities. Using historical real-time pricing data available on the New England ISO website, a customer-optimized dispatch of distributed generation is constructed so that total consumer costs are minimized. The relative difference of consumer behavior is compared between RTPs with hour-long and a five minute long periods. The results are presented across a range of DG prices, and the utilization and value of the DG resource in this case study is also quantified.