  In this paper we calculate the incremental system production cost associated
with a measure of locational power injection uncertainty that can be
interpreted as a locational price for tracking power fluctuations. This
Locational Price of Variability (LPV) can be used to allocate charges for
regulation reserves by location, and hence, can also be used to value
distributed energy storage employed to mitigate such fluctuations. We consider
policy changes that could enable the implementation of the LPV.
