#istri+ution Com'anies (#ISC)S*
* The distribution companies are usually those entities owning and operating the local distribution networ! in an area. They buy wholesale electricity either through the spot mar!ets or through direct contracts with gencos and supply electricity to the end"user customers.d.
customer is an entity consuming electricity. In deregulated mar!ets, the customer has several options for buying electricity. It may choose to buy electricity from the spot"mar!et by bidding for purchase, or may buy directly from a genco or even from the local distribution company.e.
Inde'endent System )'erator (IS)*
* The IS is an entity entrusted with the responsibility of ensuring the reliability and security of the entire system. It is an independent authority and does not participate in the electricity mar!et trades. It usually does not own generating resources, ecept for some reserve capacity in certain cases. In order to maintain the system security and reliability, the IS procures various services such as supply of emergency reserves, or reactive power from other entities in the system.f.
* The /ar!et perator is an entity responsible for the operation of the electricity mar!et trading. It receives bid offers from mar!et participants and determines the mar!et price based on certain criteria accordance with the mar!et structure. The mar!ets may have different trading schemes such as hourly trading for the net day or trading in futures" wee!, months or years ahead. Individuals wor!ing on restructuring would agree on a basic principle that access to transmission services should accommodate consumer choice and supply competition. 0estructuring in electricity industry will create new business opportunities where new firms selling new products and services will appear, consumers will have alternatives in buying electricity services, and new technologies such as metering and telecommunications devices will develop.
4./ Restructuring odels 0 Electricity aret odels,
The electricity industry is, in principle, -ust li!e any other producer or manufacturer of goods in that the electrical product (!#h) is made at a particular location and needs to be transported to the customer who has contracted to purchase that product at a certain price. 1ormally, some form of a mar!et is set up in a democratic society so that purchasers can 2shop around3 for the product that best suits them, at the price they consider to give the best value. 'or efficiency and epediency, trading mar!ets have a recogni$ed infrastructure whereby intermediaries purchase and resell commodities in varying 4uantities and arrange for delivery to varying locations. In the case of electrical energy, there is only one product, and at every time instant the amount produced must e4ual the amount consumed, otherwise the fre4uency will vary. 5onse4uently, loo!ed at from a mar!et"structure viewpoint, there must be a direct and continuous connection between generators and the customers, but the various mar!et intermediaries, such as coordinators or controllers and energy bro!ers or traders, can be