Experimental Analysis of Algorithms for Bilateral-Contract Clearing Mechanisms Arising in Deregulated Power Industry

We consider the bilateral contract satisfaction problem arising from electrical power networks due to the proposed deregulation of the electric utility industry in the USA. Given a network and a (multi)set of pairs of vertices (contracts) with associated demands, the goal is to find the maximum number of simultaneously satisfiable contracts. We study how four different algorithms perform in fairly realistic settings; we use an approximate electrical power network from Colorado. Our experiments show that three heuristics outperform a theoretically better algorithm. We also test the algorithms on four types of scenarios that are likely to occur in a deregulated marketplace. Our results show that the networks that are adequate in a regulated marketplace might be inadequate for satisfying all the bilateral contracts in a deregulated industry.