D Cruz Rubén

Ms (c) Jorge A Felizzola Cruz

Ph.D Caicedo

Ph.D Carrillo Gilberto

Rodriguez

CiteSeerX

 C I R E D 19th International Conference on Electricity Distribution Vienna, 21-24 May 2007 
 
Paper 0864 
 
 
CIRED2007 Session 6 Paper No  0864     Page 1 / 4 
MONITORING ELECTRICITY MARKETS TROUGH REGULATION USING IDEF0 
LANGUAGE 
 
 
Ms (c) Jorge A. FELIZZOLA CRUZ Ph.D. Gilberto CARRILLO CAICEDO Ph.D. Rubén D. CRUZ RODRIGUEZ 
  Universidad Industrial de Santander – Colombia  
 jfelizzo@uis.edu.co gilberto@uis.edu.co rdcruz@uis.edu.co 
 
ABSTRACT 
The considerations to develop a methodology for Power 
Market monitoring based on regulation are presented in 
this paper. Modelling methods such UML and IDEF 
facilitate to monitor process or activities. Such methods 
have been useful for establishing functional relationships 
and information in enterprises with different nature.  Here a 
novel strategy is presented for the structured representation 
of the power market based on regulatory information (laws, 
resolutions and decrees) using IDEF0 which allows to 
identify variables and indicators to perform regulatory 
studies on the sector.     
INTRODUCTION 
The Power Markets have suffered continuous changes and a 
very fast evolution head by the regulations that govern 
them. They have gone from vertically integrated schemes to 
an opening or deregulation which have mainly introduced 
competition in generation and commercialization and 
regulated the operation of natural monopolies such as 
transmission and distribution.  
The State was the only responsible for generation, transport, 
commercialization and distribution of the electric power. 
Now, those functions have been replaced by four business 
units (generation, transmission, distribution and 
commercialization) that are articulated by two units more 
which are the market operator and the system operator. The 
State continues being active part in the market, taking 
charge of to regulate and to supervise all the activities in the 
sector. 
The restructuring and deregulation processes of the electric 
industry in other countries show that markets are still very 
immature; this is reflected in the great number of resolutions 
and decrees issued every year to regulate each one of the 
business of the sector. The market is in constant evolution. 
The power market can be modeled as a “great company”, 
like the state-owned companies were it before the opening, 
made up by four big business units (generation, 
transmission, commercialization and distribution) which 
compete against each other, developing clearly defined 
functions through the regulation and which cause a different 
and only impact in the business. 
MONITORING AND POWER MARKETS 
A high automation level is been in the industry, but, in spite 
of that it is necessary monitoring and pursuit from expert 
eyes [1]. Continuous monitoring of processes or activities 
and the product or service evolution, will allow alerting 
about good or bad operation of the system, organization or 
company, and at the same time it allows to establish 
adjustment criteria and changes inside the system. 
All power markets are susceptible of being monitored. 
However, markets based on bids in which generators 
compete with their bids instead of costs need special 
surveillance mechanisms that allow them to perform a 
constant control in the agent’s behaviour so that, through 
the use of market power, avoid high non justified transfers 
of money from users to producers, which cause 
inefficiencies and competence limitation. 
A detailed version of the monitoring scheme utilized in 
Pennsylvania-Jersey-Maryland (PJM) market is been in [2]. 
There, the main monitoring activities are related to rules and 
standards concordance, rate procedures, current or potential 
imperfections and market power exercises, among others. 
Similar elements at the previously mentioned are used by 
other schemes like the New York Independent System 
Operator (ISO). 
According to the above-mentioned, in [3] are summarized 
certain “generic” monitoring elements that should be 
considered for a monitoring plan:  
1. Plan purpose: a description about it is wanted to 
monitor should be made, i.e. risks, generators or load 
behavior or competence among other participants. 
Also, it includes identification and mitigation of 
anticompetitive behaviors, penalization of participants 
whose violate market rules, transparency assurance in 
market signs, identification of treats of structural, 
financial and operational type. 
2. Implementation procedures: the next elements should 
be taken into account for monitoring process: current 
state of the laws, mitigation rules (action limits of the 
market legal/police control) and problems for obtaining 
information.  
The power market monitoring based on regulation is 
supported on this last point and it is the spine of the present 
research.  
BUSINESS PROCESS MODELLING 
The business modelling is a group of activities or processes 
used to develop specific purpose models. To model it is 
necessary to have a deep knowledge about the environment, 
besides a clear and adaptive language that allows generating 
particular solutions for each agent of the market (generator, 
transporter, marketer and distributor). 
The techniques for business modelling [4] are very 
important useful visual languages useful to achieve a global 
vision of the business. The present work adopts as 
 C I R E D 19th International Conference on Electricity Distribution Vienna, 21-24 May 2007 
 
Paper 0864 
 
 
CIRED2007 Session 6 Paper No  0864     Page 2 / 4 
modelling technique the IDEF (Integration Definition For 
Function Modelling) which is a proven language and 
equipped with representation tools (software) used in 
diverse fields. 
 
Before to reach a development level such software, it is 
necessary to establish the operative functionalities of the 
design, with their operation restrictions and information 
requirements with the objective of obtaining a “complete 
model”.  
This methodology is based on requirements engineering, 
which is necessary to determine and to specify the form of 
response of an entity because of stimuli presented into 
certain operational environment. For example, in 
requirements engineering, “entity” makes reference to a 
business object (primary stage of the design) and the same 
word is a software object in software engineering (later 
stage of the design). In order to do not waste resources as 
well as in time as in money, nowadays the software systems 
are modeled starting from organizational models. 
The requirements engineering and the business modelling 
have been strengthened by the use of formal methods which 
contribute to obtain more precise and less ambiguous 
specifications [8].  
Acoording to the above-mentioned, the biggest efforts 
should be aimed to the understanding of the environment as 
organization (the power market in this case) of the 
interactions among the different market agents and of the 
information requirements that will be necessary for the 
model development. 
The following section is focused in the relationship between 
the power markets and the technique for business modelling 
IDEF0 used as support in the requirements engineering.  
IDEF AND POWER MARKETS 
IDEF is in fact a family of formal methods that had its 
origins in the 70’s as part of a project of the United States 
Air Force [6]. Nowadays there are 16 versions of IDEF, 
each one with a different but complementary focus (object – 
oriented, relational databases, information processing). 
Nevertheless, almost in any project when the relationshiops 
or interactions are not clear, the first step should be taken 
with IDEF0. 
IDEF0 consists on a series of rules for functions 
representation. The obtained models are a collection of 
hierarchical diagrams together with some texts and cross-
references which are represented by means of rectangles or 
boxes and arrows. One of the most important aspects of 
IDEF0 is that, as modelling concept, it goes gradually 
introducing detail levels through the model structure. (See 
fig 1.) 
 
 
 
Fig. 1. TOP-DOWN decomposition of an IDEF0 model 
 
From this perspective, the power market model is given by 
the relationships been in regulation and which are 
represented as inputs, outputs, mechanisms and controls 
(ICOM). Each ICOM block developed with IDEF0 for the 
monitoring methodology, is developed according to the 
thematic found into each one resolution, law or decree 
issued every year by the regulation entity and/or by anyone 
that affects the market operation. 
A process of competitive intelligence [10] is used for 
selecting the methodology stages for market monitoring, 
with this, the basic resolutions that origin the model are 
included. Ex ante situations (market condition before the 
elaboration of the resolution) are the IDEF model inputs; 
the controls are restrictions imposed by the regulation 
entity, environmental conditions or similars; the outputs are 
considered as the impact produced by the mechanism 
(situation ex post) in the market’s agent perception 
(generator, transporter, marketer and distributor) that is 
being modeled. The mechanisms are the resolutions under 
analysis. This way each ICOM block of the model is 
explicit.   
The main advantages of representing the power market by 
means of IDEF are:  
 
• It is a unified way of representing functions or 
processes.  
• Its language is simple but rigorous and precise.  
• It allows establishing limits of detail representation 
universally constituted.  
• It can be represented with diverse computer packages.  
 
In the macro project from which makes part the present 
work, the power markets monitoring1 is being performed by 
means of a tripartite model that includes general monitoring 
of the markets through competitive intelligence and 
intelligent agents (MCGM), monitoring of the bid’s 
behavior through clustering techniques (MCOM) and 
market monitoring based on regulation through IDEF0 
(MRM). 
One of the advantages of using IDEF for market monitoring 
based on regulation (MRM model) is that it can be used for 
a posterior development using intelligent agents. In [5],[7] a 
methodology oriented to agents is presented for business 
                                                           
1 The model is being developed by the research group 
GISEL as part of the COLCIENCIAS – ISA agreement.  
 C I R E D 19th International Conference on Electricity Distribution Vienna, 21-24 May 2007 
 
Paper 0864 
 
 
CIRED2007 Session 6 Paper No  0864     Page 3 / 4 
modelling, which is a combination of object – oriented 
methodologies (OO-SE) and methodologies for business 
modelling (IDEF). 
MRM METHODOLOGY  
In MRM the rules of the market are perceived by market 
agents in a different way. A first problem confronted at the 
beginning of the modelling was to establish the limits of the 
market and therefore of the modelling. A first step is to 
establish the purpose and reach of the model through 
research questions; in addition the Structured Analysis Data 
Technique (SADT) methodology for structured analysis of 
dates was applied to the market using the IDEF0 language 
(see fig. 2). A market model seeks to extend the 
understanding of the same one through modelling its 
constituent parts, allowing to analyze the operation and 
interaction of the different processes. 
 
Fig. 2. SADT scheme applied to Power Market. 
 
Selection of the Monitoring Elements 
For develop the monitoring model using IDEF0, as 
primordial elements were selected the elements related to 
the system operation, the investment motivated by the 
regulation of each one of the business units, the costs 
recognized by the market in each one of their activities 
development and the market structure. The developed 
scheme was called PENSIMELEC (Pentagon for 
Monitoring the Power Market) (From its acronym in 
Spanish). See fig 3. 
 
The crossed analysis of each PENSIMELEC edge allows to 
identify important signs of the market such as dynamics of 
the sector, concentration grade, prices stability, etc, 
according to regulatory signs of the market and which are 
captured as mechanisms in the model developed with 
IDEF0 
STRUCTURE
CO
ST
S
OPERATION
IN
VESTM
EN
T IN
C
O
M
ES
PENSIMELEC
Eficiency
Market
concentration
Dynamics of the
sector
Market
Transparency
Stability of Prices
 
Fig. 3. PENSIMELEC. Pentagon for Monitoring the Power 
Market. 
Simplified methodological structure of MRM 
The methodological steps of the methodology are: 
 
1. Information search: The methodology is based on 
regulatory information. Therefore, the regulation entity 
of the country is identified, as well as similar 
organisms.  
 
2. Storage: The information found (resolutions, laws and 
decrees) is stored on a database or Excel ® book in 
order to apply discriminating criteria by means of 
filters or defined consultations.  
 
3. Classification: Pertinent criteria for each agent are 
defined to achieve the classification. The application 
field of the resolution (general or particular) is 
determined by a simultaneous process, as well as those 
resolutions which are derogations, appeals or operation 
rules of the regulation entity (administratives). For an 
appropriate classification it is necessary to carry out 
surveys of regulatory impact (primary perception of the 
environment), as well as consultation to experts on 
power markets (secondary perception of the 
environment).  
 
4. Model development: The first step for model 
development is to perceive the market as an 
organization and fraction it in business units that 
interact to each other. In the framework law that 
originated the market opening are described the units.  
As second step, a process of competitive intelligence 
(CI) should be applied for the identification of the 
relevant topics found in the previously classified 
resolutions and taking the PENSIMELEC as central 
axis. The third step is the identification of the ICOM 
elements for each developed unit. 
 
5. MRM Application: The last stage is making decisions. 
The commissioned organization to perform the 
monitoring can generate indicators and periodical 
reports for the own company or for the rest of the 
agents (depending on the case). 
 C I R E D 19th International Conference on Electricity Distribution Vienna, 21-24 May 2007 
 
Paper 0864 
 
 
CIRED2007 Session 6 Paper No  0864     Page 4 / 4 
CONCLUSIONS 
The investigation proposal is pioneer in the introduction of 
the concept of business modelling for performing a 
monitoring scheme applied to power markets. The 
methodology is experimental and is still in a development 
stage.  
 
The regulatory processes are complex and their reach is 
difficultly predictable; therefore every time new laws that 
affect the market conformation arise. In some cases is the 
market who “forces” to change the laws due to natural 
disasters or force majeure events. These changes are easy to 
represent with IDEF.  
 
The methodology can be used for detecting contradictions 
or regulatory holes by making a scan through the different 
submodels of the expected ex post or current situation.  
 
MRM is susceptible of being applied to any Latin American 
power market, at reduced costs, with simple desk tests. The 
necessary inputs for its application are gratuitous.  
 
For the future, the integration of other models taking as base 
the MRM’s main core (IDEF) is possible. Other models can 
be “called” to develop a complete and enough IT system 
(Information Technology) to carry out the necessary 
monitoring labors for an electricity market.  
 
The models representation is conceptual. The development 
of a multi-agent intelligent system [9] for automating the 
task of searching variables into the resolutions that govern 
the market is more and more nearby whether it is counted 
with a global and structured understanding exists using 
formal notations of the power market. 
 
REFERENCES 
 
[1] Joan Colomer, Joaquim Meléndez, Jordi Ayza.2000, 
Sistemas de supervision. Cuadernos CEA-IFAC. 
España. 
[2] Craig Glazer. 2004, «PJM Market Monitoring Plan. 
FERC Electric Tariff». Sixth revised Volume 1. 
Attachment M.. 
[3] Raj Addepalli. 2004. «Introductory Primer on the 
Monitoring and Surveillance of Electric Power 
Markets ». Philippine Energy Regulatory Commission.  
[4] Michael Petit.2002. « Report on the State of the art in 
enterprise modelling report ». University of Namur.. 
GRAISOFT-COMPUTAS. www.ueml.org  
[5] Carlos A. Iglesias. Mercedes Garijo, José C. Gonzalez. 
“Metodologías orientadas a agentes”. Universidad Pol. 
de Madrid.  
[6] FIPS Pub 183, 1993, « Integration definition for 
function modeling (IDEF0)  Software Standard 
Modelling techniques »  FIPS Pub 183. Computer 
Systems Laboratory Nacional Institute of Standards 
and Technology. . 
[7] Elisabeth A, Kendall Margaret, T Malkoun and Chong 
Jiang. 1996. A methodology for developing agent based 
systems for enterprise integration.  Luckose and Zhang 
C editors. Proceedings of the First Australian 
Workshop on DAI.  Lecture Notes on Artificial 
Intelligence. Springer Verlag  Heidelberg Germany 
[8] Ortiz H. Javier, Estrada E. Hugo., M. Rebollar 
Alicia.1996-2001. “Ingeniería de requisitos”, Proyecto 
de investigación financiado por el CONACYT y 
desarrollado en el Centro Nacional de Investigación y 
Desarrollo Tecnológico CENIDET, Cuernavaca, 
Morelos, México. 
[9] Cheol-Han Kim, R.H Weston, A. Hodgson, Kyung-
Huy Lee.2002. «The complementary use of IDEF and 
UML modelling approaches ». Information System 
Engineering, Daejon Universuty, South Korea. 
www.elsevier.com/locate/compind  
[10] Escorsa Castells Pere; Maspons Ramón, 2001 “De la 
vigilancia tecnológica a la inteligencia competitiva”; 
PEARSON EDUCATION; Prentice Hill, España. 
 
 


MONITORING ELECTRICITY MARKETS TROUGH REGULATION USING IDEF0 LANGUAGE

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MONITORING ELECTRICITY MARKETS TROUGH REGULATION USING IDEF0 LANGUAGE

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