  The increasing penetration of intermittent renewables, storage devices, and
flexible loads is introducing operational challenges in distribution grids. The
proper coordination and scheduling of these resources using a distributed
approach is warranted, and can only be achieved through local retail markets
employing transactive energy schemes. To this end, we propose a
distribution-level retail market operated by a Distribution System Operator
(DSO), which schedules DERs and determines the real-time distribution-level
Locational Marginal Price (d-LPM). The retail market is built using a
distributed Proximal Atomic Coordination (PAC) algorithm, which solves the
optimal power flow model while accounting for network physics, rendering
locationally and temporally varying d-LMPs. A numerical study of the market
structure is carried out via simulations of the IEEE-123 node network using
data from ISO-NE and Eversource in Massachusetts, US. The market performance is
compared to existing retail practices, including demand response (DR) with
no-export rules and net metering. The DSO-centric market increases DER
utilization, permits continual market participation for DR, lowers electricity
rates for customers, and eliminates the subsidies inherent to net metering
programs. The resulting lower revenue stream for the DSO highlights the
evolving business model of the modern utility, moving from commoditized markets
towards performance-based ratemaking.
