The ISO implements Security Constraint Unit Commitment (SCUC) for clearing of day-ahead market. In this paper, SCUC is also uses for simultaneous clearing of energy and reserve market. Spinning reserve and of generating units and Demand Response Programs (DRPs) are considered as system operating reserves in the proposed model. Some of DRPs usage restrictions such as maximum load curtailed, maximum curtailment in a day, Expected Energy Not Served (EENS) is considered as a criterion for system reliability evaluation.

A Two-Stage Stochastic Mixed Integer Programming is proposed for power system uncertainties modeling. The first stage named base case, includes unit commitment program with transmission lines constraints in pre-contingency conditions and the second stage is about system security providing using of scheduled spinning reserves and DRPs in each scenario.. Monte Carlo simulation is implemented for generating unit and transmission lines random outages and load prediction errors. Finally, backward scenario reduction method is used for computational burden reduction. The proposed model is applied to the IEEE RTS to demonstrate its effectiveness. The results show that the use of DRPs’ reserve, reduce the system operation costs and have high impact in reliability improvement and reduction in market clearing price in critical or peak hours.