OTHER TYPES OF INTERCHANGE

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schedule generation additions at longer intervals by buying capacity when it is

short and selling capacity when a large unit has just been brought on-line and
it has a surplus. Pure capacity reserve interchange agreements do not entitle
the purchaser to any energy other than emergency energy requirements.
10.6.2 Diversity Interchange

Daily diversity interchange arrangements may be made between two large

systems covering operating areas that span different time zones. Under such
circumstances, one system may experience its peak load at a different time of the
day than the other system simply because the second system is 1 h behind. If the
two systems experience such a phenomenon, they can help each other by interchanging power during the peak. The system that peaked first would buy power
from the other and then pay it back when the other system reached its peak load.
This type of interchange can also occur between systems that peak at different
seasons of the year. Typically, one system will peak in the summer due to
air-conditioning load and the other will peak in winter due to heating load.
The winter-peaking system would buy power during the winter months from
the summer-peaking system whose system load is presumably lower at that
time of year. Then in the summer, the situation is reversed and the summerpeaking system buys power from the winter-peaking system.
10.6.3 Energy Banking

Energy-banking agreements usually occur when a predominantly hydro system

is interconnected to a predominantly thermal system. During high water runoff
periods, the hydro system may have energy to spare and will sell it to the thermal
system. Conversely, the hydro system may also need to import energy during
periods of low runoff. The prices for such arrangements are usually set by
negotiations between the specific systems involved in the agreement.
Instead of accounting for the interchange and charging each other for the
transactions on the basis of hour-by-hour operating costs, it is common practice
in some areas for utilities to agree to a banking arrangement, whereby one of
the systems acts as a bank and the other acts as a depositor. The depositor
would deposit energy whenever it had a surplus and only the MWh
deposited would be accounted for. Then, whenever the depositor needed
energy, it would simply withdraw the energy up to MWh it had in the account
with the other system. Which system is banker or depositor depends on
the exchange contract. It may be that the roles are reversed as a function of
the time of year.
10.6.4 Emergency Power Interchange

It is very likely that at some future time a power system will have a series of
generation failures that require it to import power or shed load. Under such
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