Allocation of Uplift Payments for Voltage-Stability Services

Determine who should bear uplift payments required by voltage-stability pricing schemes and how the associated costs should be distributed among market participants.

Background

The paper explains that restricted and dispatchable pricing methods may fail to provide sufficient revenues for participating generators, thereby requiring unit-specific uplift or make-whole payments. Such payments raise unresolved questions about responsibility and cost allocation, particularly because inverter-based resources without commitment variables may be excluded from commitment-based compensation. Establishing a transparent allocation mechanism is therefore important for market fairness and efficiency.