A conceptual framework for power quality regulation

A new restructuring and regulatory process is taking place all over the world in the electrical sector. While competition is being introduced in generation and retail, network distribution activity is still considered a natural monopoly that needs to be regulated. New distribution regulatory schemes of the type of performance-based regulation, such as price caps or revenue caps, have been proposed. These models provide strong incentives for cost reduction. As a consequence, reliability, highly related to investment and maintenance practices in utilities, may suffer considerable deterioration. On the other hand, as society is becoming more sensitive to technical power quality problems, regulators are looking to control voltage quality aspects. This paper presents the theoretical aspects of a complete power quality regulation to be implemented under the new situation of distribution companies. Practical implementation issues are also discussed.