November 2001
Power Portfolio
Financial algorithms could boost utilities' efficiency.
By Tracy Staedter
Utility companies trade electricity the way brokers trade stocks: buy low, sell high. That requires guessing how much to generate, when to buy power from another firm, how a heat wave will boost demand and so forth. Operations researcher Samer Takriti of IBM's Watson Research Center in Yorktown Heights, NY, hopes a computer model using algorithms from financial markets will reduce the uncertainty and help utilities more efficiently meet demand.
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