Patent Publication Number: US-2007124026-A1

Title: Agent Based Auction System and Method for Allocating Distributed Energy Resources

Description:
CROSS REFERENCE TO RELATED APPLICATIONS  
      This application claims priority to U.S. Provisional Patent Application No. 60/741,353, filed Nov. 30, 2005, and entitled “AGENT BASED AUCTION SYSTEM AND METHOD FOR ALLOCATING DISTRIBUTED ENERGY RESOURCES”, which is hereby incorporated herein by reference. 
    
    
     FIELD OF THE INVENTION  
      The present invention relates generally to the allocation of distributed energy resources.  
     BACKGROUND  
      The electric grid is a physical infrastructure that supplies power to individuals in their homes and businesses and has become an essential part of modern life. Lighting, climate control, computers, appliances, and everything else that runs on electrical power require an electric grid that is operating properly. At the same time the electric grid needs to allocate the available energy properly so that certain geographical areas do not run out of energy and so that certain areas do not have a large amount of excess, unused energy.  
      The existing electric grid control infrastructure is based on a paradigm wherein individual electric utilities centrally control virtually all grid functions within their service territory. The existing system includes centrally located generation with power dispatched to various regions via transmission and distribution systems that are also centrally controlled. Safety systems located within the transmission and distribution systems are either centrally controlled or operate individually with actions that are essentially pre-defined. The complexity of the grid control problem is compounded by the fact that electricity cannot be effectively stored in the system thus requiring that the supply and load be perfectly matched at all times.  
      The reliability and security of the U.S. electric grid is a major concern. Currently, research and development efforts are divided between two basic areas. In a first basic area, utility companies are focused on upgrading and strengthening the existing centrally controlled infrastructure. In a second basic area, advancement involves integrating advanced information technologies in the grid infrastructure that would fully integrate site energy related activities with grid activities. This integration would occur via a transaction based control system where sites (and even individual appliances) respond to dynamic pricing or other signals.  
      The first approach has the advantage of being easier to integrate into the existing electric grid, since the existing electric grid already functions on a central control paradigm. The first approach, however, is not able to take advantage of distributed energy resources (“DER”). DER, when integrated properly with the electric grid, can provide both economic and societal benefits. Economic benefits occur in the form of reduced energy costs for end users. Societal benefits occur in the form of achieving a more robust electric grid, which is less vulnerable to a terrorist attack or other disruption. For DER benefits to be fully realized, however, it is necessary that their operation be fully integrated with other grid control and safety systems; systems that must respond rapidly to locally changing conditions. Thus, for DER benefits to be fully realized a centralized approach to controlling the electric grid will not work. As such, the first approach has the shortcoming of not being able to take advantage of the DER paradigm.  
      The second approach relies on a decentralized/distributed control paradigm that depends heavily on distributed generation and local load control. One attempt to apply DER to the electric grid relies on a “self-healing grid” concept. The self-healing grid concept relies on developing an open communications architecture that will facilitate the use of distributed generation and storage technologies in the grid. The objectives of the project include development of standardized communication object models that will facilitate the application of DER in the grid as well as enable flexible reconfiguration of distribution systems into islands when needed.  
      Regarding operation of the network, the self-healing grid uses local controllers that would collaborate to form islands of independent operation during grid disturbances and would collaborate with higher-levels to facilitate reconnection to the grid. The self-healing grid concept, however, currently provides little details and is still under development.  
      Another attempt to use the second, decentralized, approach to the electric grid, called the “Grid of the Future” concept, emphasizes the use of DER within “local microgrids”. A microgrid is a grouping of generating sources and end use loads that operate in a semi-autonomous fashion for the benefit of the microgrid participants. The micro-grid includes distributed resources capable of serving one or more customers independent from the grid either full-time or in the event of a grid power failure.  
      The generating sources may include microturbines, fuel cells, photovoltaic systems, and storage devices, all of which are interconnected through power electronic devices. A critical microgrid feature is that it appears to the distribution system to be a single customer.  
      The microgrid is designed to deal with issues concerning control of the point of common coupling (“PCC”), energy management within the microgrid, and protection coordination within the microgrid. The DER assets are essentially enclosed in a microgrid “shell” that insulates the grid from the DER and vice versa. The microgrid concept allows the existing protection systems to remain intact and issues associated with islanding, reconnection, etc. are handled internally within the microgrid. The microgrid concept, however, is not fully decentralized and it is still in its infancy as a technological concept.  
      Another attempt to use the second, decentralized, approach to the electric grid emphasizes integration of the traditional elements of supply and demand, transmission, and distribution with new technologies such as distributed generation, energy storage, and customer load management, using information to make them function as a complex, integrated system. The emphasis is on market response in the form of residential, appliance level reaction to either pricing signals or upon detection of system upset. This approach is moving toward an energy system that is controlled by a distributed network with the ability to dynamically reconfigure the system as needed in response to man-made and natural disasters. This approach optimizes energy resources by allowing all elements of the energy system to work together and adapt to changes in environmental conditions.  
      Some problems with the first, centralized approach to the power grid are that it is vulnerable to attack, non-responsive to local needs, and unable to take advantage of the benefits of DER. Some problems with the second, decentralized approaches include immature technologies and that solutions are far from being implemented in the existing electric grid. Therefore, the complexity of the many problems associated with the decentralized approach are not fully solved.  
     SUMMARY  
      The present invention is directed to a power-grid infrastructure for energy as well as methods for efficiently distributing the energy within the infrastructure that rely on a decentralized approach and the use of intelligent agents to facilitate the communication between different levels of the infrastructure, for the acquisition of the energy, as well as the distribution of the energy across the actual transmission lines (i.e., electrical couplings) within the infrastructure.  
      In one embodiment, the infrastructure comprises a hierarchical arrangement of an electric grid. At the distribution level, the hierarchical arrangement includes one or more power neighborhoods. Each of the power neighborhoods includes site manager agents each of which represent the interests of a site located within the power neighborhood. A plurality of the site manager agents communicatively coupled as well as electrically coupled to one another comprises a power neighborhood.  
      The communicative coupling includes a means for sending messages for control and certain actions by the agents to one another and to different levels in the hierarchy. The electrical coupling includes the actual physical connections and or devices implemented in the electric grid that are used to transfer electricity and/or power between the different levels in the hierarchy. The power neighborhood may be thought of as the lowest unit in the hierarchy or it can be further subdivided into buildings or individual collections of buildings, for example.  
      One or more of the distribution substations are provided at the level of the hierarchy above the power neighborhood. The distribution substations include a distribution substation agent, which is communicatively coupled and electrically coupled to all of the power neighborhoods that lie within its control area. One or more utility levels are provided at the next level of the hierarchy, each of the utility levels includes a utility level agent and having a communicative coupling and an electrical coupling to all of the distribution substations that lie within its control area. One or more independent system operator (“ISO”) levels are provided at the next level of the hierarchy, each of the ISO levels including an ISO level agent and having a communicative coupling and an electrical coupling to all of the utility levels that lie within its control area.  
      Within the infrastructure various auction methods are implemented to facilitate the exchange of energy through the electrical couplings in the hierarchy with the assistance of the agents at each level. In one embodiment, the auction process is a Dutch auction that occurs at the power neighborhood level, wherein the energy is offered, for example, by the distribution substation to one of the power neighborhoods through which it has an electrical coupling. The auction process can be network based, for example, and the agents themselves may be the participants. As participants the agents may post auction sessions for the sale or purchase of energy or may bid independently and autonomously into the auction sessions posted by other participants. Auction sessions and/or bids are developed by agents for the energy based on the various states that may occur, including site specific energy needs, local DER asset capabilities, any disruptions that may have occurred to the power-grid, and the price of the energy that is currently available from the grid via the distribution substation agent.  
      For example, the auction may start at a certain specified price and then the price is reduced over time until one of the agents determines that it is in the interest of its site, neighborhood, or area of control to buy the energy at that price. The entity offering the auction may withdraw it at any time if no agent bids for the energy.  
      Various command signals are propagated throughout the hierarchy both from the lower levels to the higher levels and vice-versa along the communicative couplings. For example, higher levels may send pricing signals to the lower levels which may cause the agent to participate in an auction if the agent determines the price is appropriate for what it needs. Similarly, the lower level, in the case of a disruption or an excess load, may send signals to a higher level to repair the disruption or to offer its excess capacity via the auction process to other agents of the same level who do not have excess capacity.  
      Other features and advantages of the present invention will become more readily apparent to those of ordinary skill in the art after reviewing the following detailed description and accompanying drawings. 
    
    
     BRIEF DESCRIPTION OF THE DRAWINGS  
      The details of the present invention, both as to its structure and operation, may be gleaned in part by study of the accompanying drawings, in which like reference numerals refer to like parts, and in which:  
       FIG. 1  is a block diagram illustrating an example hierarchical structure for a power-grid infrastructure according to an embodiment of the present invention.  
       FIG. 2  is a block diagram illustrating an example electrical coupling according to an embodiment of the present invention.  
       FIG. 3  is a block diagram illustrating an example communicative coupling according to an embodiment of the present invention.  
       FIG. 4  is a diagram illustrating an example process for conducting an energy auction according to an embodiment of the present invention.  
       FIG. 5  is a diagram illustrating an example process for conducting an energy auction according to an embodiment of the present invention.  
       FIG. 6  is a diagram illustrating an example process for agent participation in an auction according to an embodiment of the present invention.  
       FIG. 7  is a block diagram illustrating an example intra-neighborhood transmission disruption according to an embodiment of the present invention.  
       FIG. 8  is a diagram illustrating an example process for handling a grid disturbance according to an embodiment of the present invention.  
       FIG. 9  is a block diagram illustrating an example supply disruption at the utility level according to an embodiment of the present invention.  
       FIG. 10  is a block diagram illustrating an example computer system that may be used in connection with various embodiments described herein. 
    
    
     DETAILED DESCRIPTION  
      Certain embodiments as disclosed herein provide for a power-grid infrastructure for energy as well as methods for efficiently distributing the energy within the infrastructure that rely on a decentralized approach and the use of intelligent agents to facilitate the communication between different levels of the infrastructure as well as the distribution of the energy across the actual electrical couplings within the infrastructure. As used herein, the term “level” is synonymous with the term “station” so that the term “utility level”, for example, has the same meaning as “utility station”.  
      One method, for example, as disclosed herein allows for an auction process, which may be network based and the agents themselves may be the participants. As participants, the agents may post auction sessions for the sale or purchase of energy or may bid independently and autonomously into the auction sessions posted by other participants. Auction sessions and/or bids are developed by agents for the energy based on the various states that may occur, including site specific energy needs, local DER asset capabilities, the state of the infrastructure (i.e., any disruptions in the infrastructure that may have occurred), and the price of the energy that is currently available from the grid via the distribution substation agent. For example, the auction session may start at a certain specified price and then the price is reduced over time until one of the agents determines that it is in the interest of its neighborhood or area of control to buy the energy at that price. The entity auctioning the energy may withdraw it at any time if no agent bids for the energy.  
      As used herein the “agent” generally coordinates the actions of an individual or multiple sites with multiple DER assets in response to a communicative coupling that includes dynamic price signals. These same agents are also able to quickly reallocate DER resources within an electrical coupling (i.e., the various physical devices implemented in the electrical grid that are able to cause the electricity to travel from point A to point B), in response to a signal indicating the eminent loss of all or part of the grid supplied power.  
      At its most basic level, an “agent” is simply an entity that acts on behalf of its user. More specifically, a “software agent” is a software module that can act on behalf of the user. For purposes of the present invention an intelligent software agent executes autonomously &amp; operates in real-time; communicates with other agents or users; is able to exploit domain knowledge; and exhibits goal-oriented behavior. As used herein, the term “agent” is used interchangeably with the terms “intelligent software agent,” “software agent,” and “intelligent agent”.  
      As used herein the term “DER” represents a broad-based collection of devices that can be characterized as energy and power producing, consuming, storage, controls, monitoring, or conditioning devices. Each of these components of DER may be information-level devices that are able to be networked in concert together utilizing a variety of protocols and open architectures allowing for interoperability between devices.  
      The kinds of equipment found on a local level may be energy and power generating equipment located in relative proximity to the consumption or load such as: turbines and microturbines; internal combustion generators; batteries; fuel cells; wind turbines; solar generators (“photo-voltaic cells”); and combined heat and power packages. Consumption devices affected by an outage are considered to be the load. Typical commercial and industrial loads can be localized in manufacturing and process equipment such as: motors; boilers; pumps; compressors; elevators, chillers, and lighting. Storage devices may include: rotational inertial mass or flywheels; uninterruptible power supplies (“UPS”); and batteries. Control devices may include: building control systems (“BCS”); switchgear; device embedded controllers; and remote terminal units (“RTUs”) and gateways. Monitoring devices are configured for measurement and metering to account for the utilization of the power. Monitoring devices typically monitor or measure power and electricity consumption (or generation) includes such equipment as: revenue grade meters; current transformers; and data loggers.  
      After reading this description it will become apparent to one skilled in the art how to implement the invention in various alternative embodiments and alternative applications. However, although various embodiments of the present invention are described herein, it is understood that these embodiments are presented by way of example only, and not limitation. As such, this detailed description of various alternative embodiments should not be construed to limit the scope or breadth of the present invention as set forth in the appended claims.  
      Referring now to the Figures,  FIG. 1  is a block diagram illustrating an example hierarchical structure for a power-grid infrastructure according to an embodiment of the present invention. In the illustrated embodiment, the hierarchical structure 100 includes a regional transmission operator (“RTO”)/ISO level  102 , an energy services company (“ESCO”)/utility level  104 , a distribution substation level  106 , a power neighborhood/feeder level  108  and a site level  110 . One or more agents reside at each of the levels in the hierarchical structure  100 , including one or more ISO level agents  112 , one or more utility level agents  114 , one or more distribution substation agents  116 , and one or more site manager agents  118 .  
      A building agent (not shown) may reside at the site level  110  and may be the lowest level agent capable of decision-making and the ISO level agents  112  representing the RTO/ISO level may be the highest level agents. Additional agents may be used for specific lower level functions within each of the levels but these agents are not required for the basic functioning of the hierarchical structure  100  and are therefore not shown in  FIG. 1 .  
      The power neighborhood  108  is the next level in the hierarchical structure  100  above the site level  110 . The power neighborhood  108  may include the site manager agents  118 . The site manager agents  118  may be considered as a building agent with additional functionality that allows it to represent the interests of multiple building agents within a single site. An individual building has either a building agent or a site manager agent  118 .  
      The power neighborhood  108  is a means to achieve a coordinated response to a command or pricing signal received via the communicative coupling, in a way that distributes the decision-making to the site level. The end result is a portfolio response where the individual site responses are tailored to the needs of the site. This is a dramatic departure from centralized approaches in the prior art that attempt to achieve an aggregated response but concentrate the decision-making for all site actions at a central control level or at a higher level in the hierarchy of the electric grid. The distributed approach used in the power neighborhood concept may be readily expanded to include any number of sites without any change to the basic communication or computing infrastructure. Each site continues to make locally beneficial decisions in response to broadcast signals (i.e., market pricing signals via auction sessions and/or signals indicating that a disruption is eminent, etc.).  
      The activities of the site manager agents  118  may be divided into local and power neighborhood related activities. Local activities are those activities related directly to the site or to the individual agent. These activities may include PCC management, which includes monitoring of power quality related parameters at the PCC. Problem identification and reporting of abnormal conditions to the distribution substation agents  116  may also be included.  
      The local activities also may include site load management including monitoring and forecasting of site electric demand. This function may provide the site manager agents  118  with load data for the time period covered by the market of interest.  
      There are three basic types of site load; critical, curtailable, and normal. Critical load is defined as high priority, high value load such as a manufacturing process or computer load. The site manager agents  118  may typically purchase power, generate power locally and/or curtail other loads as needed to supply critical loads without interruption. Curtailable load is defined as low priority load such as non-critical lighting that may be shut off for economic reasons. Normal load is neither critical nor curtailable and the site manager agents  118  will typically strive to supply these loads with as little interruption as possible.  
      DER asset management is another local activity of the site manager agents  118 , which includes monitoring the asset(s) to evaluate status (availability, output, and performance, etc.), developing operating schedules based on market and local conditions, and implementing the operating schedule. DER assets may or may not always be available. DER assets may include distributed generation (“DG”) or curtailable load assets. The amount of excess capacity (or not) will vary during the day, which will in turn impact the response of the site manager agents  118  to disturbances depending on their time of occurrence.  
      Situation management is another local activity of the site manager agents  118 , which refers to the agent&#39;s ability to monitor, assess and act on state information for; 1) the agent itself, 2) the agent&#39;s intended goals, 3) other relevant agents in the system, and 4) the system environment. These data may reside in a situation vector for the site manager agents  118 . Situation management may also include the ability of the agent to interpret broader goals and objectives (i.e., return on revenue (“ROR”) goal, etc.) along with other user inputs (i.e., fuel costs, critical load, etc.) and system state information and to subsequently identify more specific operating targets such as auction session pricing (i.e., opening prices, reserve prices, target pricing etc.) and near-term goals (i.e., obtain additional capacity via the auction, curtail local loads, etc.).  
      The situation vector for the site manager agents  118  may contain not only goals and objectives but may also contain a measure of agent “desperation”. Desperation in this case is a relative measure of the agent&#39;s ability to succeed in its quest to: 1) obtain sufficient capacity to cover site load, and 2) meet or exceed the overall ROR objectives. The site manager agents may calculate a separate desperation level for each of three load types (normal, critical and curtailable). As a buyer of capacity, the desperation level may increase as the time of delivery (time when capacity is needed) approaches and as the size of the capacity shortfall increases. Thus, the site manager agents  118  may respond to distribution system changes such as loss of supply from the utility level  104  by modifying the situation assessment and the associated targets and/or near-term goals.  
      Agent performance assessment and modification is another local activity of the site manager agents  118 , which refers to the ability of the agent to assess how well it is performing and to subsequently take action to improve performance. One agent performance metric includes whether the agent is achieving the ROR goal. Another performance metric is whether the auction sessions for purchase or sale of capacity is closing early (potentially higher pricing is possible) or with excess capacity (potentially lower pricing is possible). Another performance metric may be whether the agent has delayed a decision to execute a transaction in order to purchase at a lower price. If so, another performance metric is whether the decision to delay has resulted in an improved price or has it resulted in the loss of capacity to another bidder.  
      Yet another performance metric is based upon what price the agent ultimately paid for the capacity. Another performance metric is whether there have been instances of bid rejections after a decision to transact has been made (loss of bid due to another agent executing first). A bid rejection may be accompanied by a reason (i.e., bid size too small, insufficient capacity remaining, etc.) and these rejection reasons may also be factored into the performance assessment.  
      The site manager agents  118  may also perform neighborhood related activities. Neighborhood related activities are those activities related to the site manager agents  118  participation in the power neighborhood  108 . One neighborhood related activity includes auction status updates. Auction status updates include retrieval of auction session data, for example, from a power neighborhood website maintained by the distribution substation agents  116 . An example of the auction session data is shown in Table 1.  
                   TABLE 1                       Item   Description                  Auctioning Agent ID   Unique identifier for auctioning site manager agent       Session ID   Unique auction session identifier to include neighborhood ID       Session Type   Generation - sale or purchase, Demand reduction - sale or           purchase       Session End Time   Auction session ends at this time.       Current Bid Price   Bid price ($/kW) of the offered capacity       Bid Modifier   Bid decrement or increment ($/kW)       Next Bid Time   Time that bid modifier will be applied to current bid price       Available Capacity (kW)   Generation or curtailable load capacity available for purchase       Delivery Start Time   Time when the available capacity can be provided.       Max Duration (hrs)   Maximum duration in hours that the capacity is available for           purchase.       Min Bid Capacity (kW)   Minimum amount of capacity that the seller is willing to           deliver.       Min Duration (hrs)   Minimum time period that the seller is willing to provide the           available capacity.                  
 
      Periodically, the site manager agents  118  update auction status information: 1) in order to identify new opportunities for the sale or purchase of excess capacity, 2) whenever it receives a signal from the distribution substation agents  116  indicating that auction board connectivity has changed, and 3) whenever the site manager agents  118  have a desperation level that triggers immediate action.  
      Another neighborhood related activity includes auction analysis. Auction analysis consists of: 1) reviewing existing sessions for opportunities to bid either immediately or in the future, 2) identifying opportunities to post new auction sessions for sale or purchase of capacity, and 3) developing session information for submittal to the auction website.  
      Another neighborhood related activity includes transaction management. Transaction management may include activities associated with generation or processing of bids associated with existing auction sessions. These activities may include: 1) transaction status update (pending, final, canceled), 2) bid development and transmittal (response to existing session by others), 3) bid negotiation (incoming requests/responses), and 4) transaction execution (recording with the distribution substation agents  116 ).  
      The distribution substation agents  116  are typically owned and operated by the ESCO/utility and represents their interests. Distribution substation agent activities can be divided into four basic areas: (1) local coordination of protection and control system; (2) hosting multiple power neighborhood auctions; (3) power neighborhood auction transaction record keeper; and (4) ESCO level auction participation.  
      The distribution substation agents  116  coordinate operation of the protection and control systems located throughout the distribution system served by its substation as well as communicating substation power quality data to the utility level agents  114  to facilitate ESCO agent coordination of higher level protection and control systems. The distribution substation agents  116  directly control variable tap transformers, sectionalizing breakers and switched capacitor banks, for example, using data provided by the site manager agents  118  to maintain power quality in the various power neighborhoods served by the substation.  
      In one embodiment, the distribution substation agents  116  monitor, but do not directly control the reclosers, manual switches and fuses. In this way, the existing infrastructure will remain essentially intact. For purposes of example, it is often assumed hereafter that the distribution substation serves two power neighborhoods with a single sectionalizing breaker between them although in reality, the configuration is likely to be more complex.  
      The distribution substation agents  116  also “host” the power neighborhood auctions. The neighborhood auctions may be conducted based on the Dutch auction process without an active auctioneer. Site manager agents  118 , working through the website software may transmit auction session data that are then posted to the website. The website software may then conduct the auction session by automatically updating the asking price per the auction set up directions. It is the responsibility of the individual site manager agents  118  to access the posted auction session data and to submit bids directly to the distribution substation agents  116  hosting the individual auction session of interest.  
      The distribution substation agents  116  do not host the auction website in the sense that it does not match buyers and sellers nor does the auction data transmitted to the auction website pass through the distribution substation agents  116 . The auction website is an independent entity that receives direction from the distribution substation agents  116  related to the electrical and communicative coupling of the various site manager agents  118  that access the auction data. The distribution substation agents  116  define neighborhood boundaries based on feeder connectivity and transmit this information to the website. The website software then may use the boundary data to identify the auction sessions that may be accessed by individual site manager agents  118  within the various neighborhoods. Thus, the distribution substation agents  116  may expand or contract the auction boundaries in response to a grid disturbance.  
      In the case of a disturbance the distribution substation agent should: (1) Redefine the neighborhood boundaries and transmit this data to the auction website. (2) Identify any temporary auction session restrictions that need to be imposed and transmit this data to the website. For instance, during a disturbance the distribution substation agents  116  may need to impose a time limit on new transactions (between previously unconnected neighborhoods) to facilitate the transition back to normal operation after the disturbance ceases. (3) Broadcast a connectivity change signal to the affected neighborhoods. It is the responsibility of the individual site manager agents  118  to access the website data to determine the implications of the connectivity change.  
      In addition, as the ESCO representative, the distribution substation agents  116  host auction sessions for sale of ESCO power to the power neighborhoods connected to the substation as well as any auction sessions that involve ESCO owned DG assets connected directly to the substation. In this way, the distribution substation agents  116  take the same action as the site manager agents  118  in that they post auction session information with the website and process incoming bids from site manager agents  118 .  
      The distribution substation agents  116  may also serve as power neighborhood auction transaction record keepers. The distribution substation agents  116 , as the representatives of the ESCO, may act as the record keeper for all transactions involving site manager agents  118  located within its power neighborhoods. In this way, the distribution substation agents  116  can more easily identify transactions impacted by connectivity changes within the power neighborhoods as well as provide billing “true-up” services using metering data that are already accessible to the ESCO.  
      As a transaction record keeper the distribution substation agents  116  should: (1) Maintain a transaction registry for all participants; (2) Monitor distribution system connectivity to confirm overall integrity of transactions and notify site manager agents  118  of invalidated transactions; and (3) Work with site manager agents  118  and the ESCO agents  114  to confirm that transactions were executed (provide “true-up”) properly.  
      During normal operation the distribution substation agents  116  record and verify transactions. During disturbances the distribution substation agents  116  identify invalidated transactions and notify the affected parties accordingly. Note that this notification of invalidated transactions is specific to individual site manager agents  118 . This is different from the previously described signal that the distribution substation agents  116  broadcast to power neighborhoods affected by a connectivity change. Thus, a disturbance may result in site manager agents  118  receiving two messages from the distribution substation agents  116 .  
      The distribution substation agents  116  also provide ESCO level auction participation. Thus, all of the distribution substation agents  116  in an ESCO service territory may participate in distribution level auction(s) coordinated by the ESCO agents  114  and hosted on a separate ESCO auction website, for example. In this case, the ESCO agents  114  define the auction board boundaries based on distribution substation connectivity just as the distribution substation agents  116  defined the boundaries of the power neighborhood auction at the distribution substation level.  
      The ESCO agents  114 , like the distribution substation agents  116  are typically owned and operated by the ESCO/utility. The ESCO agents  114  coordinate protection and control activities as well as coordinate and/or participate in auction related activities. Activities of the ESCO agents  114  may be divided into the following areas: coordination of protection and control systems; hosting ESCO level auctions; participating in power neighborhood auctions; auditing power neighborhood auction transactions; and RTO level auction participation.  
      Using data, including power quality data, provided by the various distribution substation agents  116 , the ESCO agents  114  coordinate operation of the protection and control systems located throughout the distribution systems within its service territory. The ESCO agents  114  may directly control sub-transmission or transmission assets, variable tap transformers and sectionalizing breakers used to control both the power quality and the connectivity between the various distribution substations.  
      Unlike the power neighborhood auctions coordinated by the distribution substation agents  116 , all of the distribution substation agents  116  participating in ESCO level auctions share a common owner, the ESCO. As such, each of the distribution substation agents  116  share the same basic economic goals and objectives. In the case of the power neighborhood auctions, individual sites (site manager agents  118 ) compete with the traditional suppliers, which may include the ESCO or an independent power provider (“IPP”), to supply their neighbors, or they may compete with their neighbors to purchase capacity. In the ESCO level auction the competition is primarily at the supply side with the ESCO and IPPs competing to supply the needs of the various distribution substations. The ESCO and other suppliers wishing to participate, host auction sessions that the distribution substation agents  116  then bid into based on a pricing criteria tied to the gap between the projected local supply and demand.  
      The ESCO may then use the resulting auction bid data to determine: (1) whether a need exists for IPP supplied power; (2) the price the ESCO is willing to pay for IPP supplied power; and (3) the composite price of power (ESCO and IPP) supplied to the various distribution substations for use in the lower level power neighborhood auctions. Under this scenario, no transactions between distribution substation agents  116  takes place and the ESCO remains the sole supplier of power to the distribution substations. IPP participation may be via ESCO purchase and resale of IPP energy may be via the power neighborhood auctions.  
      As with the power neighborhood level auctions, the ESCO may modify auction boundaries in response to grid disturbances and/or other connectivity issues within its service territory. Unlike the power neighborhood auctions the distribution substation agents  116  typically do not compete to supply neighboring substations. Modifying the boundaries in this case would modify the availability of IPP supplied power and potentially modify the composite ESCO/IPP energy pricing. Clearly, there may be a potential conflict of interest in that the ESCO can arbitrarily modify boundaries to exclude the IPP. However, this potential for abuse should be mitigated by the fact that the ESCO acts as a reseller of IPP power and can therefore profit even when the IPP is the supplier.  
      The ESCO agents  114 , via participation in the power neighborhood auctions may aggregate excess DG and/or curtailable load capacity and subsequently bid this capacity into higher level markets such as the auction hosted by the RTO. The existing energy infrastructure also provides for the ESCO agents  114  collecting and processing of metering information for billing purposes. This same infrastructure may therefore be used in conjunction with transaction information provided by the distribution substation agents  116  to provide a monthly transaction “true-up” service for the various distribution substation agents  116  and the power neighborhoods that they represent.  
      As with the power neighborhood auction, a similar auction may be conducted at the ESCO level and also at the RTO level. Thus, all of the ESCO agents  114  may participate in an RTO level auction coordinated by the RTO and hosted on a separate RTO auction website, for example.  
      Unlike the ESCO agents  114 , the RTO agents  112  may be independent entities that are not driven by profit. The RTO agents  112  may coordinate protection and control activities as well as coordinate and/or participate in auction related activities. Activities of the RTO agents  112  may be divided into the following basic areas: (1) coordination of protection and control systems; (2) hosting RTO level auctions; and (3) RTO auction transaction record keeper and auditing functions.  
      In one embodiment, the RTO agents  112  may define the RTO level auction board boundaries based on transmission and sub-transmission connectivity (and/or capacity) just as the ESCO agents  114  defined the boundaries of the ESCO level auctions. Note that the RTO level auction is, by necessity, more complex since it incorporates both energy and capacity markets and involves a larger number of competing entities. In addition, the uncertainty of transaction paths becomes more pronounced given the complexity of the networks involved.  
      In one embodiment, as an independent entity the RTO agents  112  may act as an impartial auctioneer, which would permit the use of more conventional auction processes in addition to the Dutch auction process that occurs for the distribution substation level.  
      As an impartial entity the RTO agents  112  may act as the record keeper for transactions involving the various entities (ESCO, IPP, etc.) involved in the RTO level auctions. In addition, the RTO agents  112  may provide the true-up service similar to that provided by the ESCO for the distribution level auctions.  
      Referring now to  FIG. 2 , a block diagram illustrating an example electrical coupling according to an embodiment of the present invention is shown. In the illustrated embodiment, the hierarchical structure  100  of  FIG. 2  includes a feeder/power neighborhood  200 , a feeder/power neighborhood  202 , a feeder/power neighborhood  204 , distribution substations  206  and  208 , an ESCO/utility  210 , an RTO  212 , distribution substation agents  116 , site manager agents  118 , and DG assets  214 .  
      Each of the power neighborhoods  200 - 204  include one or more buildings each represented by a building agent. When multiple buildings are involved, a single building agent may be designated as the site manager agent  118 , which represents the interests of the site to external entities. Typically, all building agents within a site have a common owner and are not therefore “conflicted” allowing any of the building agents to represent the others.  
      Multiple sites located on a common distribution feeder become a “power neighborhood.” Sites within the power neighborhoods  200 - 204  are able to buy and sell capacity to/from their neighbors and/or they may purchase capacity from the local ESCO  210  or another IPP. Multiple power neighborhoods  200 - 204  are electrically coupled to and governed by the distribution substation agents  116 . The distribution substation agents  116  manage the auction board, which may be Internet based, where neighborhood participants post auction sessions to buy and sell capacity.  
      The distribution substation agents  116  represent the interests of the ESCO  210  and post auction sessions for the sale of ESCO power into any of the power neighborhoods  200 - 204 , which have an electrical and a communicative coupling. Any of the DG assets  214  electrically coupled directly to the distribution system (not located at a site) capable of supplying power to the neighborhood are represented by their own agent and are able to access the auction board for any neighborhood that has an electrical coupling with the DG assets  214 .  
      Thus, the neighborhood auction process readily accommodates a changing of the electrical coupling between adjacent feeders or power neighborhoods  200 - 204 . The distribution substation agents  116  monitor feeder electrical coupling and contract or expand the auction board area so that affected power neighborhoods  200 - 204  may access additional or fewer auction sessions. In addition, the distribution substation agents  116  may coordinate the actions of the safety systems within the power neighborhoods  200 - 204 .  
       FIG. 3  is a block diagram illustrating an example communicative coupling according to an embodiment of the present invention. In the illustrated embodiment, the communication paths and basic data types involved at this level of the hierarchical structure  100  are shown in more detail. In one embodiment, all communications are Internet based and utilize transmission control protocols/Internet protocols (“TCP/IP protocols.”)  
       FIG. 3  includes the distribution substation agents  116 , the power neighborhoods  200  and  202 , site manager agents  314 A,  314 B,  314 C,  314 D,  314 E,  314 F, and  314 G, and an auction website  302 . The communicative coupling may be based on five basic data types according to one embodiment of the present invention, which include: 1) site power quality data  304 , 2) auction session data  306 , 3) intersite bid data  308 , 4) transaction records  310 , and 5) auction board connectivity data  312 . The five basic data types may be transmitted via the communicative couplings using a variety of communication media, including radio frequency (“RF”), power line carrier, fiber optic, and the like.  
      In one embodiment, the site power quality data  304  that is transmitted across the communicative coupling includes, for example, time of day, site total load (kW), site critical load (%), and site curtailable load (%). These data may be communicated between the distribution substation agents  116  and the site manager agents  314 A through  314 C. This portion of the communicative coupling may be implemented and transmitted, for example, using the knowledge query and manipulation (“KQML”) or foundation for intelligent physical agents (“FIPA”) data protocols.  
      The auction session data  306  were described previously in Table 1. These data are passed to/from the auction website  302 , which may use servlet software, and the site manager agents  314 A through  314 G, as well as between the auction website  302  and the distribution substation agents  116 . In one embodiment, these data are communicated using standard extensible markup language (“XML”) data protocols covering transmittal of data to and from websites.  
      The intersite bid data  308  may be transmitted between the site manager agents  314 A through  314 G in response to the auction sessions posted on the auction website  302 . These data are described with respect to Table 2 below.  
                   TABLE 2                       Item   Description                  Bidding Agent ID   Unique identifier for bidding site manager agent.       Session ID   Auction session identifier for auction of interest.       Current Bid Price   Bid price ($/kW) offered (confirmation of posted data).       Requested Capacity (kW)   Maximum amount of generation capacity (positive) or curtailable           load (negative) requested for purchase.       Delivery Start Time   Time when the available capacity is requested.       Duration (hrs)   Duration in hours that the capacity is requested.       Min Bid Capacity (kW)   Minimum capacity that the buyer will accept.       Min Duration (hrs)   Minimum time period that the buyer is willing to accept the           available capacity.                  
 
      In one embodiment, the data in Table 2 is communicated exclusively between agents and as such is transmitted using the KQML or FIPA data protocols.  
      The transaction records  310  are intersite bids that have been negotiated and finalized. Therefore the content of these data are analogous to the intersite bid data  308  in Table 2. Transaction records  310  may be transmitted between the site manager agents  314 A through  314 G and the distribution substation agents  116  and as such may be transmitted using the KQML or FIPA data protocols.  
      The distribution substation agents  116  determine the connectivity of the various power neighborhoods to determine the auction board connectivity data  312 . The auction board connectivity data  312  may be based on the status of the sectionalizing breakers and on the power quality data supplied by the site manager agents  314 A through  314 G. The distribution substation agents  314 A through  314 G transmit these data to the auction website  302 , which it then uses to modify the “visibility” of the various auction sessions to the site manager agents  314 A through  314 G.  
      In one embodiment, these visibility data consist of a list of visible site manager agent ID numbers for each site manager agent  314 A through  314 G associated with the auction website  302 . To reduce the amount of data transmitted, one embodiment allows a power neighborhood ID to be substituted when an entire neighborhood is involved. As with the auction session data  306 , the auction board connectivity data  312  may be communicated using standard XML data protocols covering transmittal of data to and from websites. Table 3 provides a description of some of the fields associated with the auction board connectivity data  312  according to one embodiment of the present invention.  
                       TABLE 3                           Example           Example Type   Form   Description                  Sit manager Agent ID   “A001”   “A” is the power neighborhood ID, “001” is               the agent number within the               neighborhood.       Power neighborhood ID   “A999”   “A” is the power neighborhood ID, “999”               indicates that all agents are included.       Connectivity String   “A001, A002,   Agent A001 is able to “see” only agents           A003, B999”   A002 and A003 in neighborhood A and all               agents in neighborhood B.           “A999, B999”   All agents in neighborhood B are visible               to all agents in neighborhood A.                  
 
      At the neighborhood level, one embodiment of the present invention uses a double Dutch auction format at the website auction  302 , where site manager agents  314 A through  314 G (or the distribution substation agent  116  on behalf of the local utility) post auction sessions for either the sale or purchase of capacity on the website auction  302  (managed by the distribution substation agent  116 ). In one embodiment, the Dutch auction format differs from the traditional “open outcry” also known as the English auction format in that bidding begins high and then declines at a predetermined rate (price decrement and timing). The bid price, decrement value, and decrement timing may be posted as part of the auction session and are therefore known to all bidders.  
      Under this format, bidders have the option of purchasing all or part of the offered capacity at the stated price or they may wait for the price to decline. However, sellers have the option of withdrawing the item (or the remaining capacity) at any time. Thus, a buyer&#39;s decision to delay a purchase to gain a lower price comes with the risk of either losing out to another buyer or the seller may pull the capacity from the auction altogether. Note that the auction process may be inverted for the purchase of capacity. In other words one of the site manager agents  314 A through  314 G in need of capacity may post an auction session with a low initial bid price that then increases with time. Suppliers can choose to supply all or part of the requested capacity at the stated price or may choose to wait for a higher price (with the same risk factors as before).  
       FIG. 4  is a diagram illustrating an example process for conducting an energy auction according to an embodiment of the present invention. This process can be carried out by the distribution substation agent  116  previously described with respect to  FIG. 1 . At step  700 , an auction process is initiated by a distribution substation agent to offer energy to one or more connected power neighborhoods. The auction process may be initiated for example via a website that is available to the site manager agents who may bid for the energy. At step  702 , the initial price for the energy is set based on a pricing signal to the distribution substation agent. The pricing signal typically comes from one of the levels in the hierarchy above the distribution substation and may change over time depending on various factors such as supply and demand and other factors that may change the price for energy at any given time.  
      At step  704  it is determined whether a site manager agent has bid for the energy. If one of the site manager agents did in fact bid for the energy, then at step  716 , the energy is supplied to the area of the electric grid that the site manager is responsible for. For example, if there is an electrical coupling between a portion of a power neighborhood that the site manager represents and the distribution substation, then the electrical coupling is used to transfer the energy from the distribution substation level to the power neighborhood level where it is used by buildings and appliances as needed.  
      If, however, at step  704  none of the site manager agents have bid for the energy (i.e., the intelligence algorithms of the agents cause it not to buy at that price), then the auction host determines if a time period has passed at step  706  in accordance with the rules for a Dutch auction. Step  706  repeats until a sufficient time period has passed, at which time the auction host determines whether the price for the energy has become too low at step  708 . If in fact the price has become too low (as determined by the distribution substation agent&#39;s own intelligence algorithms and its own self interest), the auction process is canceled at step  710 . Therefore, the energy being offered by the distribution substation is not supplied to any of the power neighborhoods who have joined in the auction process.  
      If, however, the distribution substation agent determines that the price has not become too low, then the price is decremented at step  714  and the process repeats. Thus, the Dutch auction continues in this manner until one of the site manager agents bids for the energy or the price is decremented so far that the distribution substation agent determines that it is in its interest to cancel the auction.  
       FIG. 5  is a diagram illustrating an example process for conducting an energy auction according to an embodiment of the present invention. This process can be carried out by a site manager agent  118  previously described with respect to  FIG. 1 . At step  900 , an auction process is initiated by a site manager agent seeking capacity from a supplier including other site manager agents or a distribution substation agent. The auction process may be initiated for example via a website that is available to the site manager agents, either intersite or in other power neighborhoods, or by distribution substation agents that are electrically coupled to the initiating site manager agent who may be able to supply the needed energy. At step  902 , the initial price for the energy that the site manager is seeking to be supplied is set at a relatively low level, in accordance with the rules for a reverse Dutch auction.  
      At step  904  it is determined whether a supplier has bid indicating that it is willing to supply some or all of the needed energy at the stated price. If one of the agents did in fact bid to supply the energy, then at step  914 , some or all of the energy is supplied the site manager agent who initiated the auction. For example, if there is an electrical coupling between a portion of a power neighborhood that the site manager represents and the supplier, then the electrical coupling is used to transfer the energy from the supplier to the site where it is used by buildings and appliances as needed.  
      If, however, at step  904  none of the suppliers have bid to supply the energy (i.e., the intelligence algorithms of the agents cause it not to supply the energy at that price), then the auction host determines if a time period has passed at step  906  in accordance with the rules for a reverse Dutch auction. Step  906  repeats until a sufficient time period has passed, at which time the auction host determines whether the price for the energy has become too high at step  908 . If in fact the price has become too high (as determined by the site manager agent&#39;s own intelligence algorithms and its own self interest), the auction process is canceled at step  910 . Therefore, the energy being sought after is not supplied by any of the supplying entities that have joined in the auction process.  
      If, however, the site manager agent determines that the price has not become too high, then the price is incremented at step  912  and the process repeats. Thus, the reverse Dutch auction continues in this manner until one of the suppliers bid to supply the energy or the price is incremented so far that the site manager agent determines that it is too expensive and in its interest to cancel the auction.  
      Note that this concept is not limited to generated capacity but may also accommodate demand response or load curtailment. Sites with curtailable loads may create an excess in previously purchased capacity and then sell this excess to neighbors. Or, a site may offer the curtailable load capacity via the auction, which may then be aggregated by the local electric utility and offered in a higher level auction hosted by the RTO/ISO for ancillary services (i.e., spinning reserve, replacement reserve, etc.). Thus the local utility may use the auction process as a means of aggregating curtailable loads.  
      The auction process therefore provides the site manager agents  118  with the opportunity to participate in the energy markets by: hosting an auction session to sell capacity to a neighbor, the ESCO or another third party aggregator; hosting an auction session to buy capacity from a neighbor, the ESCO or another third party IPP; or participating in one or more auction sessions hosted by other site managers, the ESCO, or a third party IPP.  
       FIG. 6  is a diagram illustrating an example process for agent participation in an auction according to an embodiment of the present invention. This process can be carried out by a site manager agent  118  previously described with respect to  FIG. 1 . At step  600 , it is determined whether a portion of a power neighborhood has excess capacity. For example, if one of the site manager agents determines that one ore more of the buildings that the site manager agent is responsible for has a curtailable load, then at step  602  an auction process is initiated by the site manager agent responsible for the portion of the power neighborhood that has the excess capacity. Therefore in a manner similar to the auction initiated by the distribution substation agent, the site manager agent hosts a website auction module, for example, wherein at step  604  the excess capacity is offered via the auction rules and procedures to other site manager agents either in the power neighborhood or in other power neighborhoods.  
      After step  604  the process repeats. If the decision at step  600  ever becomes false then it is determined at step  606  whether a portion of a power neighborhood does not have enough capacity. If so, the site manager agent that is responsible for the buildings that need power joins or participates in an auction process that is initiated by one or more of the distribution substation agents to obtain the additional capacity at step  608 . After step  608  or if step  606  is false the process repeats as the electric grid changes over time and the various intelligent agents continue to attempt to either supply the capacity to their connected buildings or sell the capacity if some of the buildings have curtailable loads.  
      The auction process readily accommodates changing connectivity between adjacent feeders or neighborhoods. The distribution substation agents  116  may monitor feeder connectivity and contract or expand the auction board area so that affected neighborhoods may access additional or fewer auction sessions. Thus, this process may be used to facilitate adaptive islanding within the distribution system. It is important to note that the distribution substation agents  116  may use a variety of neighborhood traits to determine when and how to modify the connectivity of the system. The distribution substation agents  116  may therefore utilize neighborhood “fitness” criteria involving such things as the penetration level of DG or curtailable load etc., to determine the appropriate system connectivity.  
      Auction transactions provide for delivery of various capacity amounts and durations, covering both near- and long-term delivery. Thus an individual one of the site manager agents  118  may contract for long-term delivery of capacity from the ESCO or another IPP (possibly at a discount) and then purchase additional capacity to cover any near-term shortfall (from a neighbor, the ESCO or an IPP). Similarly, one of the site manager agents  118  may choose to secure long-term capacity meeting its maximum needs and then sell excess capacity to its neighbors or back to the ESCO or IPP.  
      Site manager agents  118  may interact directly to finalize transactions with negotiable terms consisting of capacity amount, delivery start time and duration. Once a transaction is finalized the site manager agents  118  each may register the transaction with one of the distribution substation agents  116  (as auction board facilitator). The site manager agents  118  may also be contractually bound by the “covenants” of the power neighborhood, in one embodiment. These covenants may provide transaction standard terms and conditions, which include provisions for disruption of transactions due to system disturbances as well as provisions covering the consequences of non-performance.  
      Bid collisions may occur during the auction process. Bid collisions occur when two bidders attempt to negotiate a transaction for the same capacity. In a typical Dutch auction, the auctioneer resolves the collision by increasing the bid price and then allowing the bidders to resubmit their bids, if they so choose. This iterative process may be problematic if it delays the neighborhood response to a system disturbance and this approach gives undue power to the auctioneer. The use of an auctioneer is not therefore part of the power neighborhood concept. There are a number of alternative methods that may be used to resolve bid collisions by various embodiments of the present invention, which include: transactions are handled in the order received regardless of their relative merit; transactions are “graded” based on factors such as the total dollar amount of the transaction, duration of transaction, size of transaction, etc., and then processed based on relative merit; and capacity is distributed amongst competing transactions based on the relative size of the original bids. Thus each bidding party receives an offer for a portion of the original bid amount in proportion to the size of its original bid relative to others.  
      If the interest in reducing the amount of agent interaction (negotiation of different capacity amounts, etc.) and the associated delay is most important, then the alternative that requires processing of transactions in the order received is typically implemented. This alternative facilitates quicker responses since the auctioning site manager agent may act on bids as soon as they are received rather than accumulating bids and processing them in batches. Using this approach, the auctioning site manager agent negotiates with the first bidder as long as the requested capacity meets the minimum size requirement. Any capacity that remains after the first bid is processed is automatically offered to the next bidder as long as the capacity exceeds the minimum transaction size requirement of both the auctioning and bidding agents. The auctioning agent continues in this fashion until the remaining capacity drops below its minimum transaction size, after which all remaining bids are rejected.  
      The auction process also may include a means for responding to disruptions and the consequences of a disturbance on existing agreements (executed transactions). According to one embodiment, a disruption in the power grid that prevents the delivery of capacity would cause the distribution substation agent to re-evaluate the connectivity of the feeders to determine if neighborhoods can be temporarily subdivided and/or connected via sectionalizing breakers.  
      In the case of a disruption, the distribution substation agent may temporarily invalidate agreements that involve the affected sites (all or part of a neighborhood) in one hour increments, for example. Thus, a fault or power outage affecting a neighborhood would cause existing agreements between affected sites for the current hour to be invalidated. The distribution substation agent may identify and notify the affected areas (since all transactions are recorded with the distribution substation agent). As an alternative, the distribution substation agent may notify all connected site manager agents that a “transaction event” has occurred and the individual site manager agents would then need to evaluate the situation as it relates to them.  
      A disruption might also cause the distribution substation agent to reconfigure the auction board (accessibility of the site manager agents to auction sessions) to allow site manager agents in adjacent neighborhoods additional access. The distribution substation agent then may broadcast a “connectivity event” signal that would cause individual site manager agents to re-evaluate their situation. A disruption might also cause the distribution substation agent to place a duration limit of one hour on all new transactions involving the affected sites, which would force the affected site manager agents to develop new transactions each hour during the disruption.  
      In the case of a disruption, the distribution substation agent should also be able to differentiate between affected and unaffected sites as well as identify affected transactions or agreements. One possible disruption, a fault between adjacent sites in a neighborhood, is depicted with respect to  FIG. 7 .  
       FIG. 7  is a block diagram illustrating an example intra-neighborhood transmission disruption according to an embodiment of the present invention. In the illustrated embodiment,  FIG. 7  includes a distribution substation  104 , a distribution substation agent  410 , a DG asset  214 , power neighborhoods  202  and  204 , a site manager  402 , a fault  408 , a tie  406 , and affected sites  404 . In the case of a disruption, the distribution substation agent  410  identifies the potentially impacted sites. In this example those sites are shown as affected sites  404 . The tie  506  may be a sectionalized breaker, for example. The distribution substation agent  410  will use the tie  406  to connect the power neighborhoods  202  and  204  and subdivide the power neighborhood  202  to isolate the fault  408 .  
      The distribution substation agent  410  may also temporarily invalidate transactions involving the affected sites  404  in the power neighborhood  202 , while keeping transactions involving unaffected sites intact. The distribution substation agent  410  may also recognize that transactions involving the affected sites  404  and the ESCO remain valid since capacity can still be delivered via the electrical coupling to the adjacent neighborhood (assuming that the connection will support the load).  
      The distribution substation agent  410  may also allow the impacted site manager agents in the power neighborhood  202  access to time constrained (one hour limit) auction sessions posted for the power neighborhood  204 . The distribution substation agent  410  may allow site manager agents in the power neighborhood  204  access to auction sessions posted by the impacted site manager agents in the power neighborhood  202  while limiting access by fellow agents in the power neighborhood  202  on the other side of the fault.  
       FIG. 8  is a diagram illustrating an example process for handling a grid disturbance according to an embodiment of the present invention. This process can be carried out by a distribution substation agent  116  previously described with respect to  FIG. 8 . Energy is offered at step  800  to one or more power neighborhoods via an auction process, the power neighborhoods being electrically coupled to the distribution substation agent. At step  802 , it is determined whether a grid disturbance occurred? For example, as shown in  FIG. 7 , the fault  408  may occur as a result of a grid disturbance breaking the electrical coupling between the affected sites  404  and the distribution station  104  for whatever reason, including a mechanical failure, a terrorist attack, a weather outage, etc.  
      If a grid disturbance has occurred at step  802 , the distribution substation agent redefines boundaries (electrical couplings) with the power neighborhoods at step  804 . For example, the tie  406  may be controlled by the distribution substation agent  410  so that a change in the route of the energy results from the grid disturbance but all of the sites remain capable of being supplied with power. In that case it is assumed that the electrical couplings have not changed at step  806  and the process repeats.  
      If at step  806  the electrical couplings do in fact change, then some of the sites are not capable of being supplied with power. This may result, for example, in the absence of the tie  406  in  FIG. 7 , wherein the affected sites  404  would no longer be electrically coupled to the distribution substation  104 . In such a scenario, a change in electrical couplings is broadcast to the auction website and the affected power neighborhoods at step  808 . Step  808  may occur for example as a single signal or as several separate signals. In one embodiment, for example, the distribution substation  104  may broadcast a change in the auction boundaries to the auction website. The auction website in turn would notify the individual site. The individual sites via their site manager agents would then develop the appropriate response. Therefore, at step  810  the auction and its participants is changed based on the changed electrical couplings.  
      Another disruption example according to an embodiment of the present invention, loss of ESCO power to the distribution substation, is depicted in  FIG. 9 .  FIG. 9  includes a distribution substation  104 , a distribution substation agent  504 , power neighborhoods  202  and  204 , and a tie  502 . In the case of a disruption, the distribution substation agent  510  should identify the potentially impacted sites as all of the sites in the power neighborhoods  202  and  204 . The distribution substation agent  510  should then alter the electrical couplings so that the power neighborhoods  202  and  204  are connected using the tie  502 , which may be a sectionalized breaker.  
      The distribution substation agent  510  should also temporarily invalidate transactions involving the affected sites and the ESCO while keeping intra-site transactions intact within each neighborhood as well as transactions involving the DG units, if any, connected to the distribution substation  504 . The distribution substation agent  510  should also allow the impacted site manager agents in power neighborhood  202  access to time constrained (one hour limit) auction sessions posted for the power neighborhood  204  and vice versa.  
      It should be noted that an additional connection to another distribution substation could be initiated at the ESCO level, which would potentially provide additional auction connectivity. It is also important to note that there are issues related to operation of distribution system protective devices and issues related to connecting and disconnecting to and from the power grid that are also be addressed, as is further defined below.  
      In one embodiment, the distribution substation agent is responsible for operation of the protection and control systems. There are typically five protection and control system devices of greatest applicability: variable tap transformers, switched capacitor banks, sectionalizing switches, network protection breakers, and fuse reclosers. In general, the distribution substation agent actively controls regulation type devices in order to mitigate the disruptive effect of DG operation while leaving safety related devices intact. These devices are described briefly in the following subsections.  
      The Variable Tap Transformer (“VTT”) provides voltage regulation at the distribution level. The tap point of the transformer may be varied, in steps, to modify the transformer output voltage. Typically, a remote voltage sensing point downstream of the VTT is used to regulate the VTT output. A VTT may be remotely controlled or may operate stand-alone. The problem arises when a DG unit operates between the VTT and the remote voltage sensing point causing the VTT to incorrectly modify its tap settings. This could pose a problem in the proposed auction environment since export of on-site DG capacity locally into the power grid could adversely impact voltage regulation. Therefore, the distribution substation agent should provide active VTT control in the power neighborhoods to mitigate these affects. The distribution substation agent typically has local power quality information (i.e., voltage, frequency, etc.) as provided by the individual site manager agents to facilitate control of the VTT.  
      Capacitor banks located strategically throughout the distribution system are used to compensate for variations in site reactive power requirements. Thus a large industrial site with large motor loads would have a capacitor bank nearby to counter the large inductive loads experienced during motor operation. As with VTT operation, DG unit operation and/or sudden curtailment of large motor loads in the vicinity could disrupt operation of these capacitor banks and degrade the power quality in the area. Therefore, the distribution substation agent actively controls the switched capacitor banks to mitigate the impact of auction operations on local power quality.  
      Sectionalizing switches are used to connect or disconnect feeders within the distribution system. These switches may be manually or remotely operated and may be normally open or closed. These switches typically remain in one position or another unless a system fault requires a temporary reconfiguration of the distribution system. Distribution substation agent operation of these switches is therefore a requirement of the proposed auction based system since it gives the distribution substation agent the ability to reconfigure the neighborhoods in response to system disturbances.  
      Network protection breakers and fuses limit the delivered power to acceptable levels. These safety devices trip automatically and are typically reset or replaced manually. These devices provide the most basic level of protection and as such, operation of these systems will remain unchanged under the proposed auction-based system. However, the distribution substation agent should be able to ascertain the status of these devices based on the power quality data coming from the site manager agents in order to correctly reconfigure the neighborhoods (i.e., in response to a local fault, etc.).  
      Reclosers are protection devices that open the involved circuit in response to a system fault (over current) and then automatically attempt to close after a fixed period of time. If the over current persists then the recloser will open again. This process will continue for a preset number of cycles after which the recloser will remain in the open position. As with the network protection breakers and fuses, the recloser provides a basic level of protection and will not therefore be actively controlled by the distribution substation agent. Instead the distribution substation agent should be able to interpret the power quality exception data provided by the site manager agents to ascertain that a recloser event is occurring.  
      Electric Grid  
      In order to characterize the world as seen by a DER level agent it is instructive to review electric grid operation and the problems and issues that are unique to this highly complex and vital infrastructure. Operation of the electric grid can be characterized as having three basic modes, normal, disturbance and restorative, each with varying operational requirements. Operation of the electric grid is far more than scheduling and coordinating the transfer of power from point A to point B since it requires on-going control of power quality (voltage, frequency, etc.). In general, varying the generation (and import/export of power at interconnection points) at various points in the grid indirectly controls the flow of power at the transmission and subtransmission levels. FACTS (“flexible alternating current transmission systems”) technology can provide dynamic control and compensation within the grid. However, use of these devices can actually increase the size and speed of catastrophic events unless dynamic control systems with compatible analysis, decision and communications are utilized.  
      Since its beginnings over 100 years ago the North American power grid has evolved into an expansive and highly complex network. The power grid is comprised of half a million miles of transmission lines connecting over 10,200 power plants that supply 274 million Americans and 31 million Canadians. There are three basic operating levels for delivery of power: 1) transmission, 2) subtransmission, and 3) distribution.  
      The transmission system consists of transmission lines and associated transmission substations that operate at either extra-high voltage (&gt;300 kW) or high voltage (100 kV-300 kV) levels. The transmission system is used to connect large central generating stations and some large customers as well as to transfer power between neighboring transmission or subtransmission networks. Transmission system networks are highly interconnected meshed networks.  
      The transmission system is organized into separate but interconnected control areas each typically under the control of either an ISO or an RTO. ISOs and RTOs control their respective transmission systems in accordance with the guidelines of the North American Electric Reliability Council. Control is exercised from a central location using automated monitoring and control (“SCADA”) systems. Coordination of power transfers between the various control areas is accomplished via direct communication (telephone) between system operators.  
      Subtransmission networks connect medium sized generators, supply regional power needs and some large customers. These networks are radial or weakly coupled networks that typically operate in the 5 kV-300 kV voltage range. The subtransmission system may be controlled by the control area ISO/RTO or may be controlled by the local electric utility company.  
      Distribution systems are typically low (110 V-240 V) or medium (1-100 kV) voltage tree networked systems connected to small generators, medium customers and local networks for small customers. Distribution system control is handled by the local electric utility. Control automation can vary significantly depending on the age and location of the equipment. Supervisory control and data acquisition (“SCADA”) systems may be used to remotely control distribution system equipment or control may be initiated manually.  
      The distribution grid typically consists of substations, primary feeders, laterals, primary (high) voltage/secondary (low voltage) distribution circuits and associated switching, monitoring and protection circuitry. Normal power flow is from the bulk power source at subtransmission voltage levels of 12.47 kV to 245 kV to the distribution substations. The substations have power transformers and ancillary control equipment to send power along the primary feeders at voltage levels ranging from 4.16 kV to 34.5 kV. These feeders distribute power to customer sites and step down the voltage to 480 V/240 V/208 V/120 V as required by the site. To improve reliability the distribution substations may be configured in a grid or network.  
      While distribution systems are diverse in their layout they share some essential components needed for protection, monitoring and control. The typical distribution system has a coordinated system of overcurrent (fault) protection devices. The idea is for the protection device closest to the fault to activate as fast as possible to isolate the fault from the rest of the system. Additionally, there are protective layers that extend from high current lines (closest to the substation) to the minimum current lines (farthest from the substation).  
      A properly coordinated protection scheme should trip a device at a lower current line and allow adjacent or parallel lines to operate. For example, if there were a fault downstream from one of the three limiters shown, the appropriate limiter would open without affecting the network protector fuse or the network protector breaker. If a fault occurs such that the network protector opens, ideal coordination would prevent the station breaker from also opening. It is important to note that “coordination” in this case refers to interaction of manual trip setpoints, which are preset based on historical and projected distribution system load levels.  
      In addition to protection devices that act based on over current conditions, distribution systems usually also have a SCADA system. This system allows for supervision and possibly control of a network. A SCADA system is comprised of remote monitoring units that measure voltage, current, VAR, switch status and other parameters. There are also remote devices that allow switch operation to connect/disconnect tie lines, capacitor banks or sectionalizers. The data are sent to a central location where operators can observe system operation. If circuit changes need to be made based on scheduled maintenance, or emergency conditions, the SCADA operator can modify the distribution system by adding or removing circuits, isolating feeders or take other action depending on the level of automation that is available. SCADA system manufacturers use various communication protocols that include COMLI (“communication link”), ModBus (an industry standard communications protocol developed by Modicon Inc. that works with most SCADA systems), DNP 3.0 (“distributed network protocol”) and TCP/IP.  
      It is important to remember that operation of the electric grid is far more than scheduling and coordinating the transfer of power from point A to point B. Ultimately, operation of the grid requires on-going control of power quality (voltage, frequency, etc.) throughout the grid at any given time. Add to this, the fact that electricity cannot be stored in appreciable amounts and you have a complex, dynamic operational environment where the laws of science ultimately control the flow of power, not commercial schedules or contracts.  
      This complexity is apparent when one examines the time scale of various operations and actions within the electric grid. This diversity is illustrated in Table 4, which shows a table of the time scale hierarchy of power systems. As the table shows, the time scale varies from the micro-millisecond range (lighting induced surges, overvoltage switching, etc.) to seconds (stability control, load/frequency control, etc.) to hours/days (economic dispatch, load forecasting, etc.) or longer.  
                   TABLE 4                       Action/Operation   Time Frame                  Wave effects (fast dynamics,   Microseconds to milliseconds       lightning caused overvoltages)       Switching overvoltages   Milliseconds       Fault protection   100 Milliseconds or a few cycles       Electromagnetic effects in machine   Milliseconds to seconds       windings       Stability   60 cycles or 1 second       Stability Augmentation   Seconds       Electromechanical effects of oscillations   Milliseconds to minutes       in motors and generators       Tie line load frequency control   1 to 10 seconds; ongoing       Economic load dispatch   10 seconds to 1 hour; ongoing       Thermodynamic changes from boiler   Seconds to hours       control action (slow dynamics)       System structure monitoring (what is   Steady state; ongoing       energized and what is not)       System state measurement and   Steady state; ongoing       estimation       System security monitoring   Steady state; ongoing       Load management, load forecasting,   1 hour to 1 day or longer;       generation scheduling   ongoing       Maintenance scheduling   Months to 1 year; ongoing       Expansion planning   Years; ongoing       Power plant site selection, design,   10 years or longer       construction, environmental       impact, etc.                  
 
      Operation of the electric grid can be further characterized as having three basic modes: normal operation, disturbance and restorative. Activities that must routinely occur during normal grid operation include economic dispatch (generation, load, transmission, etc.), load frequency control, maintenance, forecasting, etc. Disturbance activities are activities directly related to the occurrence of, and immediate response to faults and instability, etc. (sectionalizing switches, reclosers, etc.) Restorative activities are activities associated with system recovery from a disturbance (rescheduling, resynchronization, load restoration, etc.).  
       FIG. 10  is a block diagram illustrating an example computer system  550  that may be used in connection with various embodiments described herein. For example, the computer system  550  may be used in conjunction with any of the levels in the hierarchical structure  100  of  FIG. 1 , including the RTO/ISO level  102 , the ESCO/utility level  104 , the distribution substation level  106 , the power neighborhood/feeder level  108  and the site level  110 . The agents that reside at each of the levels in the hierarchical structure  100  may also be software, hardware, or firmware modules, for example, which may be implemented in conjunction with the computer system  550 . However, other computer systems and/or architectures may be used, as will be clear to those skilled in the art.  
      The computer system  550  preferably includes one or more processors, such as processor  552 . Additional processors may be provided, such as an auxiliary processor to manage input/output, an auxiliary processor to perform floating point mathematical operations, a special-purpose microprocessor having an architecture suitable for fast execution of signal processing algorithms (e.g., digital signal processor), a slave processor subordinate to the main processing system (e.g., back-end processor), an additional microprocessor or controller for dual or multiple processor systems, or a coprocessor. Such auxiliary processors may be discrete processors or may be integrated with the processor  552 .  
      The processor  552  is preferably connected to a communication bus  554 . The communication bus  554  may include a data channel for facilitating information transfer between storage and other peripheral components of the computer system  550 . The communication bus  554  further may provide a set of signals used for communication with the processor  552 , including a data bus, address bus, and control bus (not shown). The communication bus  554  may comprise any standard or non-standard bus architecture such as, for example, bus architectures compliant with industry standard architecture (“ISA”), extended industry standard architecture (“EISA”), Micro Channel Architecture (“MCA”), peripheral component interconnect (“PCI”) local bus, or standards promulgated by the Institute of Electrical and Electronics Engineers (“IEEE”) including IEEE 488 general-purpose interface bus (“GPIB”), IEEE 696/S-100, and the like.  
      Computer system  550  preferably includes a main memory  556  and may also include a secondary memory  558 . The main memory  556  provides storage of instructions and data for programs executing on the processor  552 . The main memory  556  is typically semiconductor-based memory such as dynamic random access memory (“DRAM”) and/or static random access memory (“SRAM”). Other semiconductor-based memory types include, for example, synchronous dynamic random access memory (“SDRAM”), Rambus dynamic random access memory (“RDRAM”), ferroelectric random access memory (“FRAM”), and the like, including read only memory (“ROM”).  
      The secondary memory  558  may optionally include a hard disk drive  560  and/or a removable storage drive  562 , for example a floppy disk drive, a magnetic tape drive, a compact disc (“CD”) drive, a digital versatile disc (“DVD”) drive, etc. The removable storage drive  562  reads from and/or writes to a removable storage medium  564  in a well-known manner. Removable storage medium  564  may be, for example, a floppy disk, magnetic tape, CD, DVD, etc.  
      The removable storage medium  564  is preferably a computer readable medium having stored thereon computer executable code (i.e., software) and/or data. The computer software or data stored on the removable storage medium  564  is read into the computer system  550  as electrical communication signals  578 .  
      In alternative embodiments, secondary memory  558  may include other similar means for allowing computer programs or other data or instructions to be loaded into the computer system  550 . Such means may include, for example, an external storage medium  572  and an interface  570 . Examples of external storage medium  572  may include an external hard disk drive or an external optical drive, or and external magneto-optical drive.  
      Other examples of secondary memory  558  may include semiconductor-based memory such as programmable read-only memory (“PROM”), erasable programmable read-only memory (“EPROM”), electrically erasable read-only memory (“EEPROM”), or flash memory (block oriented memory similar to EEPROM). Also included are any other removable storage units  572  and interfaces  570 , which allow software and data to be transferred from the removable storage unit  572  to the computer system  550 .  
      Computer system  550  may also include a communication interface  574 . The communication interface  574  allows software and data to be transferred between computer system  550  and external devices (e.g. printers), networks, or information sources. For example, computer software or executable code may be transferred to computer system  550  from a network server via communication interface  574 . Examples of communication interface  574  include a modem, a network interface card (“NIC”), a communications port, a PCMCIA slot and card, an infrared interface, and an IEEE 1394 fire-wire, just to name a few.  
      Communication interface  574  preferably implements industry promulgated protocol standards, such as Ethernet IEEE 802 standards, Fiber Channel, digital subscriber line (“DSL”), asynchronous digital subscriber line (“ADSL”), frame relay, asynchronous transfer mode (“ATM”), integrated digital services network (“ISDN”), personal communications services (“PCS”), transmission control protocol/Internet protocol (“TCP/IP”), serial line Internet protocol/point to point protocol (“SLIP/PPP”), and so on, but may also implement customized or non-standard interface protocols as well.  
      Software and data transferred via communication interface  574  are generally in the form of electrical communication signals  578 . These signals  578  are preferably provided to communication interface  574  via a communication channel  576 . Communication channel  576  carries signals  578  and can be implemented using a variety of wired or wireless communication means including wire or cable, fiber optics, conventional phone line, cellular phone link, wireless data communication link, radio frequency (RF) link, or infrared link, just to name a few.  
      Computer executable code (i.e., computer programs or software) is stored in the main memory  556  and/or the secondary memory  558 . Computer programs can also be received via communication interface  574  and stored in the main memory  556  and/or the secondary memory  558 . Such computer programs, when executed, enable the computer system  550  to perform the various functions of the present invention as previously described.  
      In this description, the term “computer readable medium” is used to refer to any media used to provide computer executable code (e.g., software and computer programs) to the computer system  550 . Examples of these media include main memory  556 , secondary memory  558  (including hard disk drive  560 , removable storage medium  564 , and external storage medium  572 ), and any peripheral device communicatively coupled with communication interface  574  (including a network information server or other network device). These computer readable mediums are means for providing executable code, programming instructions, and software to the computer system  550 .  
      In an embodiment that is implemented using software, the software may be stored on a computer readable medium and loaded into computer system  550  by way of removable storage drive  562 , interface  570 , or communication interface  574 . In such an embodiment, the software is loaded into the computer system  550  in the form of electrical communication signals  578 . The software, when executed by the processor  552 , preferably causes the processor  552  to perform the inventive features and functions previously described herein.  
      Various embodiments may also be implemented primarily in hardware using, for example, components such as application specific integrated circuits (“ASICs”), or field programmable gate arrays (“FPGAs”). Implementation of a hardware state machine capable of performing the functions described herein will also be apparent to those skilled in the relevant art. Various embodiments may also be implemented using a combination of both hardware and software.  
      Furthermore, those of skill in the art will appreciate that the various illustrative logical blocks, modules, circuits, and method steps described in connection with the above described figures and the embodiments disclosed herein can often be implemented as electronic hardware, computer software, or combinations of both. To clearly illustrate this interchangeability of hardware and software, various illustrative components, blocks, modules, circuits, and steps have been described above generally in terms of their functionality. Whether such functionality is implemented as hardware or software depends upon the particular application and design constraints imposed on the overall system. Skilled persons can implement the described functionality in varying ways for each particular application, but such implementation decisions should not be interpreted as causing a departure from the scope of the invention. In addition, the grouping of functions within a module, block, circuit or step is for ease of description. Specific functions or steps can be moved from one module, block or circuit to another without departing from the invention.  
      Moreover, the various illustrative logical blocks, modules, and methods described in connection with the embodiments disclosed herein can be implemented or performed with a general purpose processor, a digital signal processor (“DSP”), an ASIC, FPGA or other programmable logic device, discrete gate or transistor logic, discrete hardware components, or any combination thereof designed to perform the functions described herein. A general-purpose processor can be a microprocessor, but in the alternative, the processor can be any processor, controller, microcontroller, or state machine. A processor can also be implemented as a combination of computing devices, for example, a combination of a DSP and a microprocessor, a plurality of microprocessors, one or more microprocessors in conjunction with a DSP core, or any other such configuration.  
      Additionally, the steps of a method or algorithm described in connection with the embodiments disclosed herein can be embodied directly in hardware, in a software module executed by a processor, or in a combination of the two. A software module can reside in RAM memory, flash memory, ROM memory, EPROM memory, EEPROM memory, registers, hard disk, a removable disk, a CD-ROM, or any other form of storage medium including a network storage medium. An exemplary storage medium can be coupled to the processor such the processor can read information from, and write information to, the storage medium. In the alternative, the storage medium can be integral to the processor. The processor and the storage medium can also reside in an ASIC.  
      The above description of the disclosed embodiments is provided to enable any person skilled in the art to make or use the invention. Various modifications to these embodiments will be readily apparent to those skilled in the art, and the generic principles described herein can be applied to other embodiments without departing from the spirit or scope of the invention. Thus, it is to be understood that the description and drawings presented herein represent a presently preferred embodiment of the invention and are therefore representative of the subject matter which is broadly contemplated by the present invention. It is further understood that the scope of the present invention fully encompasses other embodiments that may become obvious to those skilled in the art and that the scope of the present invention is accordingly limited by nothing other than the appended claims.