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With the continued development of renewable energy generation technologies and increasing pressure to combat the global effects of greenhouse warming, plug‐in hybrid electric vehicles (PHEVs) have received worldwide attention, finding applications in North America and Europe. When a large number of PHEVs are introduced into a power system, there will be extensive impacts on power system planning and operation, as well as on electricity market development. It is therefore necessary to properly control PHEV charging and discharging behaviors. Given this background, a new unit commitment model and its solution method that takes into account the optimal PHEV charging and discharging controls is presented in this paper. A 10‐unit and 24‐hour unit commitment (UC) problem is employed to demonstrate the feasibility and efficiency of the developed method, and the impacts of the wide applications of …