Large interconnected power systems are often operated by independent system operators, each has its own operating region within which internal resources are used economically. The operating regions are connected physically by tie lines that allow one operator to import from or export to its neighbors for better utilization of overall system resources. The operators, in general, are unwilling to share private information, especially on internal system and market data.

Existing approaches to tie-line scheduling rely on trades across borders at proxy buses by market participants. The ad hoc uses of proxy buses and the imperfect information used by the market participants result in substantial economic losses, estimated at the level of $784 million annually for the New York and New England customers.

In this talk, we present some recent results on the optimal scheduling of interchange among independently operated power systems. The first is a multiparametric programming technique that achieves optimal economic dispatch within a finite number of iterations among neighboring control centers. The second is an interface-by-interface optimization algorithm for solving the stochastic interchange scheduling problem.

This is a joint work with Ye Gou and Yuting Ji supported by the National Science Foundation and DoE Consortium for Electric Reliability Technology Solutions.