Optimal dispatch of a system based on offers and bids-a mixed integer LP formulation

The Federal Energy Regulatory Commission's (FERC) orders 888 and 889 will have far reaching consequences on the operation and dispatch of electric power systems. A common element of the change is that of dispatching the system based on offers and bids to sell and buy unbundled commodities. This paper formulates and solves the optimal dispatch problem as a mixed integer linear program. Such a formulation allows the acceptance of offers with "minimum takes" arising from generator characteristics.