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Distribution System Operator (DSO) Models for Utility Stakeholders

Organizational Models for a Digital, Distributed Modern Grid

The models presented are meant to be representative of a spectrum of market and ownership types ranging from highly centralized wholesale markets to highly decentralized peer-to-peer markets – with some models in-between.  They are not meant to be the models, but rather to provide starting points based on the closest one(s) to what is “viable” based on local conditions, politics, regulatory environments, grid situations, and other local considerations.

The stakeholders include the ISO, the Utility, the Distribution Grid Operator (DGO), the Distribution Market Operator (DMO), the Distributed Energy Resource Manager (DERM), and Customers, Producers, Third-Party/Aggregators. These roles are defined in Section 4 of the downloadable report.  Underlying assumptions include the concepts that the DMO cannot also participate in the market(s) it operates; the Utility will continue to own the distribution grid assets and networks and the Utility will remain responsible for safety and reliability of the distribution networks.

MODEL 1
Transmission System Operator (TSO) – TSO Only 
A highly centralized model where the ISO/TSO is responsible for the DMO and DERM under its jurisdiction, including the DER on the Utility’s distribution networks.

MODEL 2
TSO – Hybrid Utility
A highly centralized model where the DMO is managed by the ISO, but the DERM is managed and coordinated by the Utility.

MODEL 3
Distribution Node – Utility 
A nodal model that uses Locational Marginal Pricing (LMP) at a physical distribution constraint location such as a substation or feeder.  The Utility is responsible for both the DMO and DERM.

MODEL 4
Distribution Node – Independent Entity

A nodal model that uses LMP at a Physical distribution constraint location, where an independent organization operates the DMO and the DERM on the distribution grid.

MODEL 5
Peer-to-Peer (PtP) – Utility

A highly distributed PtP market where the DMO role is owned by the Utility. DER dispatch is performed automatically (by the customer and third-party traders) based on market activity.

MODEL 6
Peer-to-Peer – Independent Entity

A highly distributed PtP market where the DMO is managed by an independent organization and DER dispatch is performed automatically based on market activity.

Distribution System Operator (DSO) Models for Utility Stakeholders

The purpose of this document is to provide a perspective on the spectrum of Distribution System Operator (DSO) organizational models, DSO model examples, roles and responsibilities, key assumptions and questions for each of the examples provided.

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