Midnight at Oasis: tapping into scarce transmission capacity: While the process of determining the available transmission capability (ATC) is simple in concept, current operational practices and the physical characteristics of power systems complicate the actual procedure. The source and sink of a transaction would seem simply to be between a generator and either a power pool (acting as an aggregated buyer) or a load center (a bilateral transaction). In reality, though, the generation sale might be a resale or aggregation of other resold generation schedules among energy brokers and marketers, making the physical source of megawatt generation difficult or impossible to ascertain.

Generally, the cash flow between buyers, sellers, and intermediate parties is known (with some operating complications described below). In many parts of the eastern United States, the transmission commitment and charging is handled according to a "contract path," a convenient fiction that reimburses transmission costs without reference to actual flows. The size and complexity of the U.S. network can result in flow patterns that are not intuitive.

For example, the figure shows the actual electron flow percentages for a fall 1997 transaction from company A to company B (the names are changed to protect the innocent). Since the contract path between the companies is a direct connection, other wheeling utilities are not needed (contractually) and are not necessarily compensated for use of their transmission assets.

While cash can be tracked, the electron flow impacts of transactions is often a mystery to operators. Further examination of the figure shows that about 40 percent of the transaction goes through some parallel systems, whose operators (in this case) are aware of the transaction. But other system operators are often uninformed about any significant effects the transaction may have. For example, about 20 percent of the transaction flow here goes through company C, an operator who lacks sufficient information to accurately understand the flows into, out of, and through his system—or what actions are best taken in an emergency. This lack of information and control is one of the direct effects of restructuring on system operations. —J.D.M. & R.R.A.