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Session 1432

A NEW M.S. DEGREE THAT COMBINES ELECTRICAL POWER ENGINEERING AND FINANCE

Arthur M. Breipohl, Connie L. Dillon, Fred N. Lee University of Oklahoma

Abstract

The purpose of this paper is to describe both the content and the delivery method of a new M.S. degree program that combines electrical power engineering and finance. This program is designed to produce M.S. electrical engineers who are prepared for the emerging competitive electrical energy industry. With support from the N.S.F. CRCD program we are implementing this degree program, and we also are developing the material for the two new key courses and a simulator that will be made available to other universities on the web. The paper consists of: a brief description of the changes that are taking place in the electrical energy industry; their effect on the demand for graduates; the curriculum that we are developing; and a description of the two courses and the simulator that we are developing. We also briefly describe our experiments with delivery methods in anticipation of placing material on the web.

I. The Changing Electrical Energy Industry

The introduction of competition is the most significant change that is affecting the sale and production of electric energy. On the sales side, energy companies will eventually compete in a nation-wide market for electricity. Competition already exists at the wholesale level where energy companies buy and sell power from one another at market prices to eliminate expected and unexpected imbalances in load and capacity. Eventually, competition will extend to the retail market in which electricity is sold to businesses and residences.

Competition will affect the production of electricity as well. First, energy companies will become more sensitive to the performance and uncertainty of their equipment, fuel, and capital costs because their reduced, volatile revenues may not cover these costs, and they can no longer simply pass them along to their customers. Second, energy companies will begin recognizing the opportunity costs of providing one service, say generation, in lieu of providing another service, say ancillary services, because they are able to choose the type of service they’ll provide to maximize profit in a competitive market.

The importance of these considerations will intensify the need for power system plans and resource schedules that incorporate the best engineering and financial principles and practices. Both scheduling and planning require the integration of engineering knowledge about the physical characteristics of the generators and financial knowledge about the financial tools that can be used to aid in power production and delivery. For example, if a company acquires a lease of a generator for a period of time, it will probably reduce the risk if the company also shorts a forward contract for power delivery.

Proceedings of the 2001 American Society for Engineering Education Annual Conference & Exposition Copyright  2001, American Society for Engineering Education

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Lee, F., & Dillon, C., & Breipohl, A. (2001, June), A New M.S. Degree That Combines Electrical Power Engineering And Finance Paper presented at 2001 Annual Conference, Albuquerque, New Mexico. 10.18260/1-2--9609