Integrated Transmission and Distribution (ITD) Project:
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Last Updated: 17 November 2025

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Leigh Tesfatsion
Professor Emerita of Economics
Courtesy Research Professor of
    Electrical & Computer Engineering
260 Heady Hall
Iowa State University
Ames, Iowa 50011-1054
https://www2.econ.iastate.edu/tesfatsi
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Integrated T&D System

Table of Contents:

ITD Project Description

The growing penetration of diverse intermittent power resources (wind, solar, ...) in modern electric power systems at both the transmission and distribution levels has increased the uncertainty of net load as well as the frequency of strong ramp events, complicating the maintenance of net load balance. In response to these trends, power system researchers and operators are proposing new market-based initiatives intended to facilitate the reliable efficient provision of power and ancillary services from a wide array of transmission and distribution resources. The implementation of such initiatives implies tighter feedback connections between transmission and distribution level operations.

Three major premises of the ITD Project:
  1. To ensure the reliability and efficiency of future power systems, researchers need to consider with care the operation of ITD systems over time.
  2. Researchers need to develop scalable market-based approaches that permit ITD system operators to ensure the advance availability of reserve to service the just-in-time power requirements of ITD system participants as the number and diversity of these participants continues to increase.
  3. To evaluate the physical and financial feasibility of these approaches in advance of implementation, researchers need computational platforms that permit ITD systems to be modeled and studied as coherent dynamic systems with grid sizes ranging from small to realistically large, and with an appropriate degree of operational verisimilitude.

General objective of the ITD Project:

The general objective of the ITD Project is to investigate the ability of Independent Distribution System Operators (IDSOs), functioning as linkage entities for ITD systems, to facilitate the availability of reserve (physically-covered insurance) for the reduction of volumetric grid risk in ITD systems. Reserve for a future operating period T consists of the guaranteed advance availability of flexible dispatchable power-production capabilities for possible system-operator dispatch during T to service just-in-time customer power demands and grid reliability requirements.

This general project objective is in accordance with FERC Order No. 2222, titled "Participation of Distributed Energy Resource Aggregations in Markets Operated by Regional Transmission Organizations and Independent System Operators." The Final Rule for FERC Order No. 2222 was issued on September 17, 2020.

ITD Project Contributions:

A primary contribution of project participants has been the development of several new types of bid-based and negotiation-based IDSO-managed Transactive Energy System (TES) designs for distribution-level participants in ITD systems.

Project participants have also developed new types of swing contracts facilitating the ability of IDSOs to harness ancillary services from a wide variety of TES-design participants that are then used to facilitate the reliability of ITD system operations. The payments received by the IDSOs from cleared ancillary service offers (in flexible swing-contract form) at the transmission level are passed back to the providers of these services at the distribution level, thus creating additional revenue streams for these providers.

The efficacy of these TES designs has been demonstrated by means of detailed conceptual analyses as well as test case simulations. To implement the latter, project participants have developed the ITD TES Platform V2.0, a computational platform that permits the software modeling and co-simulated implementation of ITD system operations over time. The Electric Reliability Council of Texas (ERCOT) energy region has been used as the empirical anchor for the development of this platform.

As indicated below, conceptual and test-case work carried out to date by project participants has been reported in a Wiley/IEEE Press book, journal articles, book chapters, and professional presentations. In addition, the key components comprising the co-simulation ITD TES Platform V2.0 have been released as documented open-source software at GitHub code/data repositories.

ITD Project Participants (Alphabetical Order)

Swathi Battula (Assistant Prof., EE Dept., IIT Kanpur; ISU ECpE PhD 2021), Jan 2017 - present.

Subhonmesh Bose (Associate Prof., ECpE, U of Illinois at Urbana-Champaign), July 2019 - June 2021.

Rui Cheng (Assistant Prof., North China Electric Power University, Beijing, ISU ECpE PhD 2023), Aug 2019 - present.

Shanshan Ma (Principal Engineer, Quanta Technology, LLC, ISU ECpE PhD 2019), Jan 2017 - Dec 2019.

Mariola Ndrio (PSERC Project GRA, U of Illinois at Urbana-Champaign, UIUC PhD 2021), July 2019 - June 2021.

Hieu Trung Nguyen (Assistant Prof., North Carolina A&T State U., ISU Post-Doc 2017-2018), May 2017 - Aug 2018.

Rohit Reddy Takkala (Research Analyst, Centre for Social and Economic Progress, New Delhi; ISU ECpE MS 2018), Sept 2017 - June 2018; Aug 2023 - present.

Leigh Tesfatsion (Professor Emerita of Economics, Courtesy Research Professor of ECpE, 375 Heady Hall, ISU), Aug 2015 - present.

Auswin George Thomas (Senior Market Validation and Quality Analyst, CAISO, ISU MS 2012) Aug 2015 - Dec 2017.

Jianhui Wang (Professor of Engineering, Southern Methodist University), Jan 2017 - Sept 2020.

Zhaoyu Wang (Northrup Grumman Endowed Associate Professor of ECpE, 1113 Coover Hall, ISU), Aug 2015 - present.

Anna Winnicki (PSERC Project GRA, U of Illinois at Urbana-Champaign), July 2019 - June 2021.

Contract & Grant Support for ISU ITD Project Participants (2016-2023)

Colciencias Programa 852
Sponsor: Colciencias, Modalidad Programas
Title: "Valuing Variability in the Colombian Electricity Market"
External Expert Advisor: Leigh Tesfatsion
Start Date of Award: March 2020
End Date of Award: February 2023
PSERC Project #M-40
Sponsor: Power Systems Engineering Research Center (PSERC)
Title: "Market and Control Mechanisms Enabling Flexible Service Provision by Grid-Edge Resources within End-to-End Power Systems"
PI: Leigh Tesfatsion (ISU)
Co-PI: Zhaoyu Wang (ISU)
Co-PI: Subhonmesh Bose (UI)
Start Date of Award: July 2019
End-Date of Award: August 2021
DOE Project
Sponsor: Office of Electricity (OE), U.S. Department of Energy (DOE)
Title: "Flexible Service Contracting for Risk Management within Integrated Transmission and Distribution Systems"
PI: Zhaoyu Wang
Co-PI: Leigh Tesfatsion
Co-PI: Jianhui Wang
Start Date of Award: January 1, 2017
End-Date of Award: September 30, 2020
PNNL Project
Sponsor: Pacific Northwest National Laboratory (PNNL)
Title: "Regional Scale Transactive System Study in the ERCOT Region of Texas"
PI: Leigh Tesfatsion
Co-PI: Zhaoyu Wang
Collaborators: PNNL Team
Start Date of Contract: March 19, 2018
End Date of Contract: July 31, 2019
PNNL Project
Sponsor: Pacific Northwest National Laboratory (PNNL)
Title: "Development of an Integrated Transmission and Distribution Test System to Evaluate Transactive Energy Systems"
PI: Leigh Tesfatsion
Co-PI: Zhaoyu Wang
Collaborators: PNNL Team
Start Date of Contract: April 1, 2017
End Date of Contract: July 31, 2019
EPRC Project
Sponsor: Electric Power Research Center (EPRC)
Title: "Integrated Distribution and Transmission Effects of Demand-Response Initiatives"
PI: Leigh Tesfatsion
Start Date of Award: August 1, 2015
End Date of Award: July 31, 2016

Project-Related Publications by ISU Participants (Chronological Order)

Books and Monographs:

Leigh Tesfatsion (2024), Economics of Grid-Supported Electric Power Markets: A Fundamental Reconsideration (Preprint,pdf), Foundations and Trends in Electric Energy Systems 8:1, NOW Publishers, Delft, The Netherlands, 123pp. DOI: 10.1561/3100000044
   Note: The published monograph (pdf) and individual monograph chapters (pdf) are available here from NOW Publishers for research, teaching, and/or private study purposes. See, also: (KeyPoints,pdf); (FERCTalk2023,pdf); (FERCDocketComments2022,pdf); and (YouTube,FERCDay2,7:34:00).

Leigh Tesfatsion (2021), A New Swing-Contract Design for Wholesale Power Markets, John Wiley & Sons, Inc. (IEEE Press Series on Power Engineering, Vol. 102), Hoboken, NJ, USA, 288pp. (IEEEPES,BookReview,pdf), (FERCTalk2022,pdf), (Wiley/IEEEPressBookFlyer)

Journal Articles and Book Chapters:

Leigh Tesfatsion (2025), Design Strategies for Integrated Transmission and Distribution Systems: An Expanding Toolkit (Preprint,pdf), (FERCTalk2025,pdf), Current Sustainable/Renewable Energy Reports 12:31, Springer Nature.

Leigh Tesfatsion (2024), "Locational Marginal Pricing: A Fundamental Reconsideration", IEEE Open-Access Journal of Power and Energy, Vol. 11, Feb. 2, pp. 104-116. DOI: 10.1109/OAJPE.2024.3361751. The IEEE Xplore open-access posting of this refereed published paper is available here.

Rui Cheng, Leigh Tesfatsion, and Zhaoyu Wang (2023), "A Consensus-Based Transactive Energy Design for Unbalanced Distribution Networks" (IEEEPreprint,pdf), (PESGM2022Talk,pdf), IEEE Transactions on Power Systems 38(1), January, 114-128.

Swathi Battula, Leigh Tesfatsion, and Zhaoyu Wang (2020), "A Customer-Centric Approach to Bid-Based Transactive Energy System Design" (Preprint,pdf), (BattulaThesisSlides2021,pdf), IEEE Transactions on Smart Grid 11(6), 4996-5008. DOI: 10.1109/TSG.2020.3008611

Swathi Battula, Leigh Tesfatsion, and Thomas E. McDermott (2020), "An ERCOT Test System for Market Design Studies" (Preprint,pdf), Applied Energy, Vol. 275, October, 115182. DOI: 10.1016/j.apenergy.2020.115182

Shanshan Ma, Zhaoyu Wang, and Leigh Tesfatsion (2019), "Swing Contracts with Dynamic Reserves for Flexible Service Management" (Preprint,pdf), IEEE Transactions on Power Systems 34(5), 4024-4037. DOI: 10.1109/TPWRS.2018.2831924

Hieu T. Nguyen, Swathi Battula, Rohit Reddy Takkala, Zhaoyu Wang, and Leigh Tesfatsion (2019), "An Integrated Transmission and Distribution Test System for Evaluation of Transactive Energy Designs" (AEPreprint,pdf), Applied Energy, Volume 240, 666-679.

Tianguang Lu, Zhaoyu Wang, Jianhui Wang, Qian Ai, and Chong Wang (2019), "A Data-Driven Stackelberg Market Strategy for Demand Response-Enabled Distribution Systems" (IEEEXplore), IEEE Transactions on Smart Grid 10(3), May, 2345-2357.

Auswin G. Thomas and Leigh Tesfatsion (2018), "Braided Cobwebs: Cautionary Tales for Dynamic Pricing in Retail Electric Power Markets" (Preprint,pdf), IEEE Transactions on Power Systems 33(6), 6870-6882. DOI: 10.1109/TPWRS.2018.2832471

Leigh Tesfatsion (2018), "Electric Power Markets in Transition: Agent-Based Modeling Tools for Transactive Energy Support" (ScienceDirect), Chapter 13 (pp. 715-766) in Cars Hommes and Blake LeBaron (Eds.), Handbook of Computational Economics 4: Heterogeneous Agent Models, Handbooks in Economics Series, North Holland (Elsevier), Amsterdam, the Netherlands.

Wanning Li and Leigh Tesfatsion (2018), "A Swing-Contract Market Design for Flexible Service Provision in Electric Power Systems" (WP,pdf), Chapter 5 (pp. 105-127) in: Sean Meyn, Tariq Samad, Ian Hiskens, and Jakob Stoustrup (Eds.), Energy Markets and Responsive Grids: Modelling, Control, and Optimization, The IMA Volumes in Mathematics and its Applications Series, Springer.

Leigh Tesfatsion (2017), "Modeling Economic Systems as Locally-Constructive Sequential Games" (Preprint,pdf), (DukeFCKeynote2024,pdf), Journal of Economic Methodology 24(4), 384-409.

Dheepak Krishnamurthy, Wanning Li, and Leigh Tesfatsion (2016), "An 8-Zone Test System based on ISO New England Data: Development and Application" (Preprint,RevisedAppendix,pdf), IEEE Transactions on Power Systems 31(1), January, 234-246.

Zhaoyu Wang and Yanyi He (2016), "Two-stage Optimal Demand Response with Battery Energy Storage Systems", IET Generation, Transmission and Distribution 10(5), April, 1286-1293.

Deung-Yong Heo and Leigh Tesfatsion (2015), "Facilitating Appropriate Compensation of Electric Energy and Reserve through Standardized Contracts with Swing" (Preprint,pdf), Journal of Energy Markets 8(4), December, 93-121.

Zhaoyu Wang, Bokan Chen, Jianhui Wang, and Miroslav Begovic (2015) "Stochastic DG Placement for Conservation Voltage Reduction based on Multiple Replications Procedure", IEEE Transactions on Power Delivery 30(3), June, 1039-1047.

Zhaoyu Wang, Bokan Chen, Jianhui Wang, Miroslav Begovic, and Chen Chen (2015), "Coordinated Energy Management of Networked Microgrids in Distribution Systems", IEEE Transactions on Smart Grid 6(1), January, 45-53.

Project-Related Reports by ISU Participants (Chronological Order)

Leigh Tesfatsion (2025), Design Strategies for Integrated Transmission and Distribution Systems: An Expanding Toolkit (WP,pdf), (FERCTalk2025,pdf), Econ WP 25004, Digital Repository, Iowa State University, Ames, Iowa. (Revised version published in Current Sustainable/Renewable Energy Reports, 2025)

Leigh Tesfatsion (2023), "Economics of Grid-Supported Electric Power Markets: A Fundamental Reconsideration" (FERCSupportDoc2023,pdf), Supporting Document (Attachment A) for Comments (Accession #20230117-5051) e-filed (17 January 2023) for FERC Order Directing Reports (Modernizing Wholesale Electricity Market Design), Docket #AD21-10-000, U.S. Federal Energy Regulatory Commission, Issued 21 April 2022.

Leigh Tesfatsion, Zhaoyu Wang, and Subhonmesh Bose (2021), "Market and Control Mechanisms Enabling Flexible Service Provision by Grid-Edge Resources within End-to-End Power Systems" (FinalProjectReport,pdf) , Final Project Report M-#40, Power Systems Engineering Research Center (PSERC) Publication 21-12, October.

Rui Cheng, Leigh Tesfatsion, and Zhaoyu Wang (2021), "A Multiperiod Consensus-Based Transactive Energy System for Unbalanced Distribution Networks" (WP,pdf), WP #21005, Economics Working Papers, ISU Digital Repository, Iowa State University, Ames, IA. (Shortened revised version published in the IEEE Transactions on Power Systems, 2022)

Swathi Battula (2021), Transactive Energy System Design for Integrated Transmission and Distribution Systems (BattulaThesis,pdf), PhD Dissertation, Department of Electrical and Computer Engineering, Iowa State University, Ames, IA.

Leigh Tesfatsion and Swathi Battula (2020), "Analytical SCUC/SCED Optimization Formulation for AMES V5.0" (AMESV5,CodeDoc,pdf), WP #20014, Economics Working Paper Series, ISU Digital Repository, Iowa State University, Ames, IA.

Leigh Tesfatsion and Swathi Battula (2020), "Notes on the GridLAB-D Household Equivalent Thermal Parameter Model" (ETPModel,CodeDoc,pdf), WP #19001, Economics Working Paper Series, ISU DIgital Repository, Iowa State University, Ames, IA.

Swathi Battula, Leigh Tesfatsion, and Zhaoyu Wang (2019), "A Transactive Energy Approach to Distribution System Design: Household Formulation" (WP,pdf), WP #19010, Economics Working Paper Series, ISU Digital Repository, Iowa State University, Ames, IA. (Shortened revised version published in the IEEE Transactions on Smart Grid, 2020.)

Hieu Trung Nguyen, Swathi Battula, Rohit Reddy Takkala, Zhaouyu Wang, and Leigh Tesfatsion (2018). "Transactive Energy Design for Integrated Transmission and Distribution Systems" (WP,pdf), WP #18004, Economics Working Paper Series, ISU Digital Repository, Iowa State University, Ames, IA. (Shortened revised version published in Applied Energy, 2019.)

Wanning Li and Leigh Tesfatsion (2017), "An 8-Zone ISO-NE Test System with Physically-Based Wind Power" (WP,pdf) WP #17017, Economics Working Paper Series, ISU Digital Repository, Iowa State University, Ames, Iowa.

Leigh S. Tesfatsion, César A. Silva-Monroy, Verne W. Loose, James F. Ellison, Ryan T. Elliott, Raymond H. Byrne, and Ross T. Guttromson (2013), "New Wholesale Power Market Design Using Linked Forward Markets: A Study for the DOE Energy Storage Systems Program" (SandiaFinalReport,pdf), Sandia National Laboratories Report, SAND2013-2789, Unlimited Release, April.

Project-Related Presentations by ISU Participants (Chronological Order)

Leigh Tesfatsion (2025), "Smart Grids as Coupled Physical and Economic Systems" (FERCTalk2025,pdf), FERC Technical Conference 2025 (Virtual): Increasing Real-Time and Day-Ahead Market Efficiency through Improved Software, U.S. Federal Energy Regulatory Commission, Washington, D.C., July 8--10.

Leigh Tesfatsion (2025), "Smart Grids as Coupled Physical and Economic Systems" (MSATalk2025,pdf), Market Surveillance Monitor (MSA), Independent Monitor of Alberta's Electricity and Retail Natural Gas Markets, Alberta, Canada, March 28.

Leigh Tesfatsion (2025), "Completely Agent-Based Modeling (c-ABM): A Right Mathematics for Coupled Physical and Economic Systems?" (AITalk2025,pdf), Workshop on Artificial Intelligence and Machine Learning for Economists, Iowa State University, Ames, IA, February 28.

Leigh Tesfatsion (2023), "Economics of Grid-Supported Electric Power Markets: A Fundamental Reconsideration" (FERCTalk2023,pdf), (YouTube,Day 2,7:34:00), (WP,pdf), Virtual (Zoom) Presentation to FERC Technical Conference 2023, Docket No. AD10-12-014 (Increasing Real-Time and Day-Ahead Market Planning Efficiency Through Improved Software), Washington, D.C., June 27-29.

Leigh Tesfatsion (2023), "Economics of Grid-Supported Electric Power Markets: A Fundamental Reconsideration" (KeyPoints,pdf), Virtual (Zoom) ECpE Power Seminar, Department of Electrical and Computer Engineering, Iowa State University, Ames, Iowa, April 18.

Leigh Tesfatsion (2023), "Economics of Grid-Supported Electric Power Markets: A Fundamental Reconsideration" (PJM/IMTalk2023:Part2,pdf), Virtual (WebEx) Presentation: Part II, Monitoring Analytics (PJM Independent Market Monitor), March 1.

Leigh Tesfatsion (2023), "Economics of Grid-Supported Electric Power Markets: A Fundamental Reconsideration" (PJM/IMTalk2023:Part1,pdf), Virtual (WebEx) Presentation: Part I, at Monitoring Analytics (PJM Independent Market Monitor), Feb 15.

Leigh Tesfatsion (2023), "Economics of Grid-Supported Electric Power Markets: A Fundamental Reconsideration" (FERCStaffTalk2023,pdf), presentation (virtual) to FERC Staff on E-Filed Comments and Supporting Document for Docket AD21-10-000", January 30.

Leigh Tesfatsion (2022), "Economics of Grid-Supported Electric Power Markets: A Fundamental Reconsideration," Virtual Presentation, Transactive Energy Theory Workshops 2022, Sponsored by the Pacific Northwest National Laboratory (PNNL), Dec. 6--7.

Leigh Tesfatsion (2022), "U.S. RTO/ISO-Managed Wholesale Power Markets: A Fundamental Reconsideration" (ANLTalk2022HandOut,pdf), Virtual Presentation, Argonne National Laboratory (ANL), Oct. 5.

Rui Cheng (presenter), Leigh Tesfatsion, and Zhaoyu Wang (2022), "Consensus-Based Transactive Design for Unbalanced Distribution Networks" (IEEEPESGMTalk2022,pdf), IEEE Power and Energy Society General Meeting, Denver, Colorado, July 17--21.

Leigh Tesfatsion (2022), "Transitioning to Linked Swing-Contract Wholesale Power Markets for Net-Zero 2050" (FERCTalk2022,pdf), FERC Technical Conference 2022 (Virtual): Increasing Real-Time and Day-Ahead Market Efficiency through Improved Software, U.S. Federal Energy Regulatory Commission, Washington, D.C., June 21--23.

Leigh Tesfatsion (2022), "A Next-Generation Analytical Approach to Policy Design: Completely Agent-Based Modeling (c-ABM)" (NYUTalk2022,pdf), Next Generation Analytical Approaches to Policy, Virtual Roundtable, Organized by the NYU School of Global Public Health, the Organization for Economic Cooperation and Development OECD), and New Approaches to Economic Challenges (NAEC), April 12.

Leigh Tesfatsion (2021), "Agent-Based Platforms for Electric Power Systems" (IEEEPESGMTalk2021,pdf), IEEE Power and Energy Society General Meeting (Virtual), July 26--29.

Leigh Tesfatsion (2021), "A New Swing-Contract Design for Wholesale Power Markets" (FERCTalk2021,pdf), FERC Technical Conference on Increasing Real-Time and Day-Ahead Market Efficiency Through Improved Software (Virtual), U.S. Federal Energy Regulatory Commission, Washington, D.C., June 22--24.

Leigh Tesfatsion (2021), "A Multiperiod Consensus-Based Transactive Energy System for Unbalanced Distribution Networks," PI Project Presentation, PSERC Industrial Advisors Board (IAB) Meeting (Virtual), Power Systems Engineering Research Center (PSERC), May 12--14.

Rui Cheng (2021), "A Multiperiod Consensus-Based Transactive Energy System for Unbalanced Distribution Networks," PSERC 2021 Student Poster Competition (Virtual), Power Systems Engineering Research Center (PSERC), April 8.

Swathi Battula (2021), "TES Design for ITD Systems" (BattulaThesisTalk2021,pdf), Department of Electrical and Computer Engineering (ECpE), ISU, February 1.

Leigh Tesfatsion (2020), "A New Swing-Contract Design for Wholesale Power Markets", Research Seminar (Virtual), ARPA-E/I-CPIE event, sponsored by Lehigh University, December 17.

Leigh Tesfatsion (2020), "A New Swing-Contract Design for Wholesale Power Markets," sponsored by the Electric Power Research Institute (EPRI), September 18.

Rui Cheng (presenter), Leigh Tesfatsion, and Zhaoyu Wang (2020), "Multi-Period Consensus-Based Transactive Control in an Unbalanced Distribution Network", Transactive Energy Systems Theory Workshop (Virtual), Pacific Northwest National Laboratory (PNNL), September 17.

Leigh Tesfatsion (2019), "Flexible Service Contracting for Risk Management within Integrated Transmission and Distribution Systems," DOE/OE Transmission Reliability, Reliability & Market Program Peer Review Meeting, Sphinx on K, Washington, D.C., June 11.

Leigh Tesfatsion (2018), "Market and Control Mechanisms Enabling Flexible Service Provision by Grid-Edge Resources within End-to-End Power Systems," Power Systems Engineering Research Center (PSERC) IAB Meeting, UC Berkeley, Dec 5--7.

Leigh Tesfatsion (2018), Keynote Address: "Agent-Based Modeling Support for Institutional Design," CSS 2018, The Computational Social Science Society of the Americas, Santa Fe, New Mexico, Oct 25--28.

Shanshan Ma (presenter), Zhaoyu Wang, and Leigh Tesfatsion (2018), "Swing Contracts with Dynamic Reserves for Flexible Service Management," IEEE Power & Energy Society General Meeting (GM 2018), Portland, OR, Aug 5--9.

Leigh Tesfatsion (2018), "Theory Development Through Agent-Based Modeling" (webinar), Symposium I: State of the Art & Epistemological Perspectives on Theory Development Through Agent-Based Modeling, Hannover, Germany, July 4--6.

Leigh Tesfatsion (2018), "Swing Contract Transactive Energy System Designs for End-to-End Power Systems," Hybrid Economic-Control Theory Workshop, MIT, Cambridge, MA, June 11, 2018.

Zhaoyu Wang (2018), "Agent-Based Modeling for Integrated Transmission and Distribution Test Systems," 2018 IEEE PES T&D Conference and Exposition, Denver, CO, April 16--19.

Leigh Tesfatsion (2018), "Electric Power Markets in Transition: Agent-Based Modeling Tools for Transactive Energy Support," Invited Talk (via Skype), Invenia Labs, Cambridge, UK, March 22.

Zhaoyu Wang (2018), "Integrated Transmission and Distribution Test Beds," Invited Talk, University of Bath, Bath, UK, January 16.

Leigh Tesfatsion (2017), "Modeling Coupled Natural and Human Systems as Locally-Constructive Sequential Games," Invited Talk (Skype), ABM Seminar, University of Minnesota, Mpls., November 8.

Zhaoyu Wang (2017), "Integrated Wholesale and Retail Power System Testbeds," Invited Talk, Springfield City Utilities, Springfield, MO, October 19, 2017.

ITD Project Team via Skype (2017), "Transactive Energy System Designs for End-to-End Power Systems with Massively Distributed Energy Resources," PNNL TESP Workshop, Richland, WA, October 16.

Leigh Tesfatsion (2017), "Agent-Based Modeling Tools for Electric Power Market Design: Implications for Macro/Financial Policy," Heterogeneous Agents and Agent-Based Modeling: The Intersection of Policy and Research, Joint Conference of the Office of Financial Research (U.S. Treasury), Brandeis University, and the Bank of England, held at U.S. Treasury, Washington, D.C., September 21--22.

Leigh Tesfatsion (2017), "Electric Power Markets in Transition: Agent-Based Modeling Tools for Transactive Energy Support" (via Skype), Amsterdam Business School, Amsterdam, the Netherlands, June 1.

Zhaoyu Wang (2017), "DOE Project Research Summary," Electric Power Research Center IAB Meeting, Iowa State University, May 14.

Leigh Tesfatsion (2017), "Modeling Economic Systems as Locally Constructive Sequential Games," Social Behavioral Modeling and Simulation Workshop, Sponsored by the Defense Advanced Research Project Agency (DARPA), RAND Corporation, Santa Monica, CA, April 3--4.

Leigh Tesfatsion (2016), "Economic Systems as Constructively Rational Games: Oh, the Places We Could Go!," International Congress on Agent Computing, George Mason University, Nov 29--30.

Leigh Tesfatsion (2016), Keynote Address, "Economic Systems as Constructively Rational Games: Oh, the Places We Could Go!," Economics in the Era of Natural Computation and Big Data, Duke Forest Conference, Durham, NC, Nov. 11--13.

Auswin G. Thomas (presenter) and Leigh Tesfatsion (2016), "Using Test Systems to Explore Integrated Transmission and Distribution System Operations with SmartGrid Functionality: A Demand- Response Illustration," IEEE PES General Meeting, Boston, MA, July 17--21.

Wanning Li (presenter) and Leigh Tesfatsion (2016), "Market Provision of Flexible Energy/Reserve Contracts: Optimization Formulation," Proceedings, IEEE PES General Meeting, Boston, MA, July 17--25, 2016.

Wanning Li and Leigh Tesfatsion (presenter) (2016) "Market Provision of Flexible Energy/Reserve Contracts," FERC Technical Conference, Washington, D.C., June 27--29.

Leigh Tesfatsion (2016), "Facilitating Flexible Service Provision in Electric Power Markets via Swing Contracting," Control at Large Scales: Energy Markets and Responsive Grids, Institute for Mathematics and its Applications (IMA), Mpls, May 9--13.

Steve Widergren, Koen Kok, and Leigh Tesfatsion (2016), "Transactive Energy Systems," Webinar, IEEE SmartGrid, March 10.

Koen Kok, Steve Widergren, and Leigh Tesfatsion (2015), "Intelligent Systems Support for Transactive Energy Systems: The Fundamentals," Half-Day Tutorial, IEEE Power and Energy Society General Meeting, Denver, CO, July 26--30.

Leigh Tesfatsion (presenter) and Deung-Yong Heo (2015), "Facilitating Appropriate Compensation of Electric Energy and Reserve Through Standardized Contracts with Swing," Panel Session: Effects of Contract Design on Electricity Market Performance with Increased Penetration of Distributed Energy Resources and Variable Generation, IEEE Power and Energy Society General Meeting, Denver, CO, July 26--30.

Auswin G. Thomas (presenter) and Leigh Tesfatsion (2015), "Integrated Transmission and Distribution Effects of Demand-Side Participation," Panel Session: Wholesale and Retail Market Interaction Requirements for Effective Demand-Side Participation, IEEE Power and Energy Society Meeting, Denver, CO, July 26--30.

Project-Related Software Developed by ISU Participants

ITD TES Platform V2 (open-source, co-simulation platform, Java/Python/C++/C): Released 8/2021.

The ITD TES Platform V2 (GitHub Repository) is a co-simulated platform developed by Swathi Battula and Leigh Tesfatsion at Iowa State University, with support from Pacific Northwest National Laboratory (PNNL) and the U.S. Department of Energy (DOE). It permits the modeling and implementation of an Integrated Transmission and Distribution (ITD) system operating over successive days. It has specifically been developed to facilitate performance testing of bid-based Transactive Energy System (TES) designs proposed for implementation within ITD systems. The current default transmission component of the ITD TES Platform V2.0 is the ERCOT Test System, implemented in part by means of AMES V5.0; see below.

ITD Project/Household Formulation (open source, Python): Released 10/2020.

The ITD Project/Household Formulation (GitHub Repository) provides Python code/data in support of the household modeling used in S. Battula, L. Tesfatsion, and Z. Wang (2020), "A Customer-Centric Approach to Bid-Based Transactive Energy System Design," IEEE Transactions on Smart Grid 11(6), 4996-5008.

AMES V5.0 (open source, Java/Python): Released 8/7/2020

AMES V5.0 (GitHub Repository): Version 5.0 of AMES (Agent-Based Modeling of Electricity Systems) is an open source agent-based computational platform capturing salient features of U.S. RTO/ISO-managed wholesale power markets operating over high-voltage transmission grids during successive days, with grid congestion handled by Locational Marginal Pricing (LMP). AMES V5.0 was developed by Swathi Battula and Leigh Tesfatsion at Iowa State University, with support from researchers at the Pacific Northwest National Laboratory (Tom McDermott, Mitch Pelton, Qiuhua Huang, and Sarmad Hanif). AMES V5.0 consolidates features from previous AMES versions and continues the main developments in these previous versions.

AMES V5.0 supports the submission of supply offers and demand bids (in both fixed and price-sensitive form) into daily DAM SCUC/SCED and RTM SCED optimizations formulated as Mixed Integer Linear Programming (MILP) problems with a comprehensive set of system constraints. It permits continual updating of initial state conditions to permit market operations to run over successive days. The package includes an 8-bus test case based on data, operations, and market timing for the Electric Reliability Council of Texas (ERCOT) energy region.

In addition, AMES V5.0 is integrated with a high-level simulation framework that permits it to function as a software component within larger systems, such as multiple seamed energy regions or integrated transmission and distribution systems.

ERCOT Test System (open source, Java/Python, implemented in part by AMES V5.0): Released 8/7/2020

The ERCOT Test System (GitHub Repository) was developed by Swathi Battula and Leigh Tesfatsion (at Iowa State University) and Thomas E. McDermott (at Pacific Northwest National Laboratory).

In default mode, the ERCOT Test System models ISO-managed day-ahead and real-time markets in the Electric Reliability Council of Texas (ERCOT) energy region operating over a high-voltage transmission grid during successive days, with grid congestion handled by Locational Marginal Pricing (LMP). Market participants include dispatchable generators, load-serving entities, and/or non-dispatchable generation such as unfirmed wind and solar power. The transmission grid is constructed by means of a synthetic grid construction method developed by Tom Overbye and collaborators, which is included in the download of the ERCOT Test System package.

Users can configure a broad variety of parameters to study basic ERCOT market and grid features under alternative system conditions. Users can also easily extend the test system's Java/Python software classes to study modified or newly envisioned market and grid features.

In addition, the test system is integrated with a high-level simulation framework that permits it to function as a software component within larger systems, such as multiple seamed energy regions or integrated transmission and distribution systems.

A detailed description of the ERCOT Test System, together with illustrative 8-bus and 200-bus ERCOT test cases, can be found in the following paper:

Eight Zone ISO-NE Test System (open source, Java/Python, implemented in part by AMES V4.0): Released 11/30/2015

The 8-Zone ISO-NE Test System, based on ISO New England data and characteristics, was developed by Dheepak Krishnamurthy, Wanning Li, and Leigh Tesfatsion at Iowa State University. Code for the test system and illustrative test cases can be accessed at the 8-Zone ISO-NE Test System Repository.

A detailed description of the 8-Zone ISO-NE Test System, together with illustrative applications, can be found in the following two papers:

Online Background Materials

Articles/Reports Encouraging Fundamental Reconsideration of Current ITD System Operations (Chronological Order):

Chiara Lo Prete, Karen Palmer, and Molly Roberson (2025), Time for a Market Upgrade?: A Review of Wholesale Electricity Market Designs for the Future" (Preprint,pdf), Energy Economics, to appear.
Authors' Summary: "This paper presents a review of electricity market designs to support the clean energy transition. Meeting system reliability challenges associated with increasing levels of renewable generation requires incentivizing resource flexibility, both in investment and in operation. Electricity market structures should be designed to allow resources needed for reliability to earn sufficient revenues to recover their fixed and variable costs. Good market designs should also enable low-cost financing to support investments in capital-intensive resources that are instrumental in meeting decarbonization objectives. An additional property of well-designed markets is promoting shortrun efficiency by reducing incentives to exercise market power and supporting efficient renewable curtailment outcomes. Besides reliability, long-run efficiency, and short-run efficiency, electricity markets may seek to achieve equity objectives (e.g., lower costs of renewable generation must be passed through to retail customers) and in some cases may be integrated with clean energy goals."

Joshua C. Macey (2025), Outsourcing Electricity Market Design (Preprint,pdf), The University of Chicago Law Review, Vol. 91, pp. 1243-1330.
Author's Summary: "A basic principle of virtually every regulation to improve grid reliability and reduce power sector emissions is that market participants change their behavior when regulations make it more expensive to engage in socially harmful activities. To give a concrete example, a carbon tax assumes that increasing the costs of emitting carbon dioxide will lead market participants to reduce energy consumption and switch to less carbon-intensive resources. But this assumption does not apply to large parts of the electricity industry, where investor-owned utilities are often able to pass the costs of climate and reliability rules on to captive ratepayers. The underlying problem, I argue, is that the U.S. legal system outsources investment and market design decisions to private firms that will be financially harmed if state and federal regulators pursue deep decarbonization or take ambitious steps to improve grid reliability."

Leigh Tesfatsion (2025), Design Strategies for Integrated Transmission and Distribution Systems: An Expanding Toolkit (Preprint,pdf), (FERCTalk2025,pdf), Econ WP 25004, Digital Repository, Iowa State University, Ames, Iowa. (Invited Springer Nature review)
Author's Summary: "Integrated Transmission and Distribution (ITD) systems for electric power are complex systems encompassing strongly coupled physical, economic, and legal processes. This review identifies and assesses design strategies for ITD systems that permit this complexity to be systematically addressed. A nine-tiered Design Readiness Level (DRL) classification is used to sort an illustrative collection of recent ITD system design studies into readiness tiers ranging from conceptualization to real-world deployment. Computational platforms are seen to provide key support for traversing the "Valley of Death" tiers separating typical university design research from typical design research carried out at industrial and government facilities. For example, agent-based co-simulation platforms, enhanced by developments in data-assisted generative artificial intelligence, permit reduced computational complexity, flexible tailoring of model simplifications to purposes at hand, matching of modeled agents to empirical referents, and systematic testing of design aspects that involve coupled physical, economic, and legal processes."

Leigh Tesfatsion (2024), Economics of Grid-Supported Electric Power Markets: A Fundamental Reconsideration [(Preprint,pdf), (KeyPoints,pdf), (FERCTalk2023,pdf)], Foundations and Trends in Electric Energy Systems, Vol. 8, No. 1, NOW Publishers, Delft, The Netherlands, 123pp.
Abstract: "Centrally-managed U.S. wholesale power markets operating over high-voltage AC transmission grids are transitioning from heavy reliance on fossil-fuel based power to greater reliance on renewable power with increasingly diverse suppliers and customers. This study highlights four conceptually-problematic economic presumptions reflected in the legacy core design of these markets that are hindering this transition. The key problematic presumption is the static conceptualization of the basic product as grid-delivered energy (MWh) transacted in short-run (day-ahead and intra-day) markets at competitively determined unit prices ($/MWh), conditional on delivery location and time. This study argues, to the contrary, that the basic product in need of efficient reliable transaction in these markets is reserve (physically-covered insurance) for protection against power imbalance (volumetric grid risk). This reserve is the guaranteed availability of dispatchable nodal power-production capabilities for possible central dispatch during designated future operating periods at designated grid delivery locations to satisfy just-in-time customer power demands and grid reliability requirements. For illustration, a recently proposed Linked Swing-Contract Market Design is briefly reviewed. The latter design permits dispatchable power resources to offer diverse types of reserve into a centrally-managed collection of linked forward bid/offer-based reserve markets via two-part pricing insurance contracts taking a flexible swing form. The swing in these contracts permits efficient planning for real-time reliability, and the two-part pricing form of these contracts permits cleared suppliers to assure their revenue sufficiency. A principled cost allocation rule supports the independence of the fiducial central manager by assuring break-even revenue adequacy for system operations as a whole."

Mark C. Christie (2023), "It's Time to Reconsider Single-Clearing Price Mechanisms in U.S. Energy Markets" (Preprint,pdf), Energy Law Journal, Vol. 44.1:1, Energy Bar Association.
Summary: This article makes four main arguments. First, it is timely for the United States to join the UK and Europe in a comprehensive reconsideration of the pricing mechanisms used in our power markets and to ask whether these pricing mechanisms can or will, in the future, deliver the best combination of cost savings and reliable power supply to consumers. Second, the need for this reconsideration of pricing mechanisms should focus immediately on capacity markets. Third, this reconsideration of pricing mechanisms should not be limited to capacity markets; it should include real-time and day-ahead power markets. Fourth, any serious reconsideration of power market pricing mechanisms must include an examination of the broader historical context in which these mechanisms were adopted, specifically the validity of the assumptions that drove power market deregulation in the nineteen-nineties.

Tony Clark and Vincent Duane (2023), "When is a MWh not a MWh?" (html), RTO Insider, February 8th.
Summary: In current U.S. RTO/ISO-managed wholesale power markets, amounts of energy (MWh) scheduled for delivery at designated grid locations b during designated future operating periods T are settled by means of Locational Marginal Pricing (LMP); that is, by the demand=supply determination of a uniform per-unit energy price LMP(b,T) ($/MWh). Clark and Duane question whether LMP will still work for these markets as they become increasingly reliant on intermittent (weather-dependent) power resources with near-zero fuel costs, such as wind and PV solar power.

Martin Bichler and Johannes Knörr (2023), "Getting prices right on electricity spot markets: On the economic impact of advanced power flow models" (Preprint,pdf), Energy Economics, Vol. 126, 106968.
Shortened Abstract: "As the share of variable renewable energy increases, adequate prices on electricity spot markets become increasingly important as they set signals for scarcity, investment, or demand response. Market prices are derived from the underlying welfare maximization problem. On electricity spot markets, this optimization problem is based on the non-convex and non-linear Alternating Current Optimal Power Flow (ACOPF) model. Since the ACOPF is intractable, electricity markets around the world use a linear approximation, the Direct Current Optimal Power Flow (DCOPF) model. ... The DCOPF often yields high price differences between nodes when there is no line congestion in the AC-feasible solution or vice versa. Such biased price signals pose a significant problem in practice as they lead to inefficient demand response, distorted investment signals, and incorrect congestion incomes. The use of non-linear relaxations mitigates this problem and provides an important advantage of the resulting prices over prices based on the DCOPF."

FERC (2022), Modernizing Wholesale Electricity Market Design: Order Directing Reports (IssuedOrder,pdf), (ConcernsSummary,pdf), Docket No. AD21-10-000, U.S. Federal Energy Regulatory Commission (FERC), Washington, D.C., April 21, 2022.
Order Abstract: "In this order, we direct each regional transmission organization and independent system operator (RTO/ISO) -- specifically, California Independent System Operator Corp. (CAISO); ISO New England, Inc. (ISO-NE); Midcontinent Independent System Operator, Inc. (MISO); New York Independent System Operator, Inc. (NYISO); PJM Interconnection, L.L.C. (PJM); and Southwest Power Pool, Inc. (SPP) (collectively, the RTOs/ISOs) -- to submit information to the Commission related to their wholesale markets. In particular, we direct each RTO/ISO to, within 180 days from the date of this order, file with the Commission in this docket a report that describes: (1) current RTO/ISO system needs given changing resource mixes and load profiles; (2) how each RTO/ISO expects its system needs to change over the next five years and over the next 10 years; (3) whether and how each RTO/ISO plans to reform its energy and ancillary services markets to meet expected system needs over the next five years and over the next 10 years; and (4) information about any other reforms, including capacity market reforms and any other resource adequacy reforms that would help each RTO/ISO meet changes in system needs. Public comments in response to the RTO/ISO reports may be submitted within 60 days following the filing of the reports. The Commission will review the reports and comments to determine whether further action is appropriate."

Leigh Tesfatsion (2021), A New Swing-Contract Design for Wholesale Power Markets [ (IEEEPES,BookReview,pdf), (FERCTalk2022,pdf), (Wiley/IEEEPressBookFlyer)], John Wiley & Sons, Inc. (IEEE Press Series on Power Engineering), Hoboken, NJ, USA, 288pp.
Abbreviated Preface: "Grid-supported U.S. centrally-managed wholesale power markets are currently transitioning to lower-carbon grid operations with an increasingly diverse collection of market participants. These trends, in turn, are resulting in greater uncertainty and volatility of net load. Market managers are consequently finding it harder to ensure continual balancing of net load, a basic requirement for grid reliability. This study reconsiders the design of these markets in light of these concerns. Three design principles are stressed: (i) Grid-supported wholesale power markets must necessarily be forward markets due to the speed of real-time grid operations. (ii) Only one type of product can effectively be offered in these markets: namely, reserve, an insurance product consisting of the guaranteed availability of power-production capabilities for possible central dispatch at designated grid locations during designated future operating periods as protection against volumetric grid risk (power imbalance). (iii) All dispatchable resources should be permitted to compete for the provision of reserve in these markets without regard for irrelevant underlying technological differences. If these three principles are accepted, current trade and settlement arrangements for grid-supported U.S. centrally-managed wholesale power markets need to be fundamentally altered. This study proposes a new linked swing-contract market design, consistent with principles (i)-(iii), that could meet the needs of these markets better than currently implemented designs."

NERC (2017), Distributed Energy Resources: Connection Modeling and Reliability Considerations (NERC,pdf), North American Electric Reliability (NERC) Corporation Report, February, Atlanta, Georgia.
Abbreviated Executive Summary: "The North American electric power system is transforming to a resource mix that relies less on coal and nuclear while integrating more natural gas, wind, solar, distributed generation, and demand response resources. The NERC Essential Reliability Services (ERS) Working Group is studying this transformation in the broader context of monitoring grid reliability and resiliency. Additionally, as noted in the ERS Framework Report (2015), Distributed Energy Resources (DERs) are a rapidly growing part of this transformation. This report discusses the potential reliability risks and mitigation approaches for increased levels of DER on the Bulk Power System (BPS). At the distribution level, the potential impacts of DERs are fairly well understood in the industry, but the translation of these impacts to the BPS has been studied less. This report discusses the challenges as well as the steps forward for reliably integrating higher DER penetrations."

NAS (2016), Analytic Research Foundations for the Next-Generation Electric Grid (NAS,pdf), National Academies of Science, The National Academies Press, Washington, D.C.
Abbreviated Abstract: "The next-generation electric grid must be flexible enough to accommodate intermittent renewable energy sources, such as wind and solar, and it must be resilient enough to withstand disturbances caused by attacks or disasters. ... At the request of the Department of Energy (DOE), this report provides guidance on the long-term critical research areas in the mathematical sciences that should be given priority in order to advance the analytic foundations needed to make the next-generation electric grid a reality. The report advises DOE to increase research in mathematical optimization and in dynamical system theory in order to more accurately model the next generation grid. It recommends improving data availability and usage through the creation of synthetic data and the development of open-source software. It also recommends that DOE broaden its coordination of research in its National Laboratories to include academic and industrial researchers and that it establish a National Electric Power Systems Research Center."

Philipp Ringler, Dogan Keles, and Wolf Fichtner (2016), "Agent-Based Modelling and Simulation of Smart Electricity Grids and Markets - a Literature Review" (DOI Link), Renewable and Sustainable Energy Reviews, Vol. 57, pp. 205-215.
Abbreviated Abstract: "The realisation of the smart grids and markets vision constitutes a substantial transition of electricity systems affecting multiple stakeholders and creating various technical, social, economic, political, and environmental challenges. These need to be considered adequately in decision support tools for agents in electricity systems. Agent-based modelling and simulation as a flexible and rich modelling framework can serve as a testbed for analysing new paradigms in the field of smart grids, such as demand response, distributed generation, distribution grid modelling, and efficient market integration. ... (It) can deliver valuable input for decision processes of stakeholders and policy making. Future research could feature more focused analyses of storage systems, local market concepts, interactions with centralised markets, and the role of intermediaries."

Maria Lorena Tuballa and Michael Lochinvar Abundo (2016), "A Review of the Development of Smart Grid Technologies" (DOI Link), Renewable and Sustainable Energy Reviews, Vol. 59, pp. 710-723.
Abbreviated Abstract: "This paper aims to present an overview of the SmartGrid with its features, functionalities and characteristics. It aims to demonstrate how Smart Grid technologies have shaped the modern electricity grid. It discusses policies, pilots and projects from different countries to provide the extent to which SmartGrid technologies have flourished. It also intends to identify research activities, trends, issues and challenges. The more people know about the Smart Grid, the better they will understand its value, and the less resistent they will be to compromises that might be necessary."

Resource Websites:

General Resources on Electricity Restructuring

Agent-Based Computational Electricity Market Research

EE/Econ 458: Economic Systems for Electric Power Planning    Note: This power economics course has been designed for long-distance access. All lecture notes and assigned readings are posted on-line.

Open-Source Software for Electricity Market Research, Teaching, and Training

MISO: Midcontinent ISO Homepage

ISO-NE: ISO New England Homepage

PJM Homepage

NY-ISO: New York ISO Homepage

CAISO: California ISO Homepage

ERCOT: Electric Reliability Council of Texas Homepage

SPP: Southwest Power Pool Homepage

The Midcontinent Independent System Operator (MISO) maintains MISO Dynamic LMP Contour Maps for day-ahead and real-time LMPs (refreshed every five minutes), accompanied by information in chart and tabular form.

The New England Independent System Operator (ISO-NE) maintains ISO-NE Dynamic LMP Contour Maps for day-ahead and real-time LMPs (refreshed every five minutes), accompanied by information in chart and tabular form.

The New York Independent System Operator (NYISO) maintains an NYISO Real-Time Dashboard that includes contour maps for day-ahead and real-time LMPs (refreshed every five minutes), accompanied by information in chart and tabular form.

The Southwest Power Pool (SPP) maintains SPP Price Contour Maps for day-ahead and real-time LMPs (refreshed every five minutes), accompanied by information in chart and tabular form.