An experimental analysis of the effects of automated mitigation procedures on investment and prices in wholesale electricity markets

Journal of Regulatory Economics

Volumn 31, Issue 3, 2007, Pages 313-334

  Kiesling, Lynne ^a   Wilson, Bart J ^b  

^a NORTHWESTERN UNIVERSITY   (United States)

^b GEORGE MASON UNIVERSITY   (United States)

Author keywords

Automated mitigation procedures; Electric power markets; Investment; Price caps

Indexed keywords

EID: 34247334564     PISSN: 0922680X     EISSN: None     Source Type: Journal    
DOI: 10.1007/s11149-006-9018-4     Document Type: Article

References (48)

1. Borenstein, S. (2000). Understanding competitive pricing and market power in wholesale electricity markets. Electricity Journal, 13, 49-57.
2. Borenstein, S., & Bushnell, J. (1999). An empirical analysis of the potential for market power in California's electricity industry. Journal of Industrial Economics, 47, 285-323.
3. Borenstein, S., Bushnell, J., & Wolak, F. (2002). Measuring market inefficiencies in California's restructured wholesale electricity market. American Economic Review, 92, 1376-1405.
4. Entriken, R., & Wan, S. (2003). Agent-based simulation of an automatic mitigation procedure. Electric Power Research Institute Final Report. Available at http://www.epriweb.com/public/000000000001.007733.pdf.
5. Entriken, R., & Wan, S. (2005). Agent-based simulation of an automatic mitigation procedure. Proceedings of the 38th Hawaii international conference on system sciences. Available at http://www.econ.iastate.edu/ tesfatsi/ABElectSim.Entriken.pdf.
6. Federal Energy Regulatory Commission (2002a). Notice, agenda, and staff paper for the October 2nd staff conference re remedying undue discrimination through open-access transmission service. Docket RM01-12, September 27, 2002.
7. Federal Energy Regulatory Commission (2002b). Transcript of technical conference re remedying undue discrimination through open-access transmission service. Docket RM01-12, October 2, 2002.
8. Goldman, C., Lesieutre, B., & Bartholomew, E. (2004). A review of market monitoring activities at U.S. independent system operators. LBNL-53975, Lawrence Berkeley National Laboratory. Available at http://www.osti.gov/energycitations/servlets/purl/821332-lEx-PdM/native/821332. pdf.
9. Holt, C. (1989). The exercise of market power in laboratory experiments. Journal of Law and Economics, 32, S107-S130.
10. Kahn, A. E. (2002a). The adequacy of prospective returns on generation investments under price control mechanisms. Electricity Journal, 15(2), 37-46.
11. Kahn, A. E. (2002b). The deregulatory tar baby: The precarious balance between regulation and deregulation. 1970-2000 and henceforward. Journal of Regulatory Economics, 21(1), 35-56.
12. Longford, N. T. (1993) Random coefficient models. New York: Oxford University Press.
13. New York Independent System Operator. (2004). Automated mitigation procedure in the day-ahead energy market. Technical Bulletin 067.
14. New York Independent System Operator. (2004). Market monitoring and performance: SMD market changes overview. Presentation.
15. New York Independent System Operator. Real-Time Scheduling Primer. http://www.nyiso.com/oasis/smd2/pdf/rts_primer.pdf.
16. Puller, S. (2006). Pricing and firm conduct in California's deregulated electricity market. Manuscript, Texas A&M University. Review of Economics and Statistics, 88(4), forthcoming.
17. Rahimi, A. F., & Sheffrin, A. Y. (2003). Effective market monitoring in deregulated electricity markets. IEEE Transactions on Power Systems, 18, 486-494.
18. Rassenti, S. J., Smith, V. L., & Wilson, B. J. (2003). Controlling market power and price spikes in electricity markets: Demand-side bidding. Proceedings of the National Academy of Science, 100, 2998-3003.
19. Sweeney, J. (2002). The California Electricity Crisis. Palo Alto: Hoover Institution Press.
20. Synapse Energy Economics (2001). Best practices in market monitoring: A survey of current ISO activities and recommendations for effective market monitoring and mitigation in wholesale electricity markets. Available at http://www.synapse-energy.com/Downloads/report-pjm-advocate-best-practices- market-monitoring.PDF.
21. Tabors, R., & Cardell, J. (2003). Ex ante and Ex post designs for electric market mitigation: Past and present experience and lessons from California. Proceedings of the 36th Hawaii international conference on system sciences. Available at http://csdl.computer.org/comp/proceedings/hicss/ 2003/1874/02/187420055.pdf.
22. Williamson, D., Jullien, C., Kiesling, L., & Staropoli, C. (2006). Investment incentives and market power: An experimental analysis. Economic Analysis Group Discussion Paper, Antitrust Division, U.S. Department of Justice. Available at SSRN: http://ssrn.com/abstract=892598.
23. Wilson, J. F. (2000). Scarcity, market power, and price caps in wholesale electric power markets. Electricity Journal, 13, 33-46.
24. Wolfram, C. (1999). Measuring duopoly power in the British electricity spot market. American Economic Review, 89, 805-826.
25. Borenstein, S. (2000). Understanding competitive pricing and market power in wholesale electricity markets. Electricity Journal, 13, 49-57.
26. Borenstein, S., & Bushnell, J. (1999). An empirical analysis of the potential for market power in California's electricity industry. Journal of Industrial Economics, 47, 285-323.
27. Borenstein, S., Bushnell, J., & Wolak, F. (2002). Measuring market inefficiencies in California's restructured wholesale electricity market. American Economic Review, 92, 1376-1405.
28. Entriken, R., & Wan, S. (2003). Agent-based simulation of an automatic mitigation procedure. Electric Power Research Institute Final Report. Available at http://www.epriweb.com/public/000000000001.007733.pdf.
29. Entriken, R., & Wan, S. (2005). Agent-based simulation of an automatic mitigation procedure. Proceedings of the 38th Hawaii international conference on system sciences. Available at http://www.econ.iastate.edu/ tesfatsi/ABElectSim.Entriken.pdf.
30. Federal Energy Regulatory Commission (2002a). Notice, agenda, and staff paper for the October 2nd staff conference re remedying undue discrimination through open-access transmission service. Docket RM01-12, September 27, 2002.
31. Federal Energy Regulatory Commission (2002b). Transcript of technical conference re remedying undue discrimination through open-access transmission service. Docket RM01-12, October 2, 2002.
32. Goldman, C., Lesieutre, B., & Bartholomew, E. (2004). A review of market monitoring activities at U.S. independent system operators. LBNL-53975, Lawrence Berkeley National Laboratory. Available at http://www.osti.gov/energycitations/servlets/purl/821332-lEx-PdM/native/821332. pdf.
33. Holt, C. (1989). The exercise of market power in laboratory experiments. Journal of Law and Economics, 32, S107-S130.
34. Kahn, A. E. (2002a). The adequacy of prospective returns on generation investments under price control mechanisms. Electricity Journal, 15(2), 37-46.
35. Kahn, A. E. (2002b). The deregulatory tar baby: The precarious balance between regulation and deregulation. 1970-2000 and henceforward. Journal of Regulatory Economics, 21(1), 35-56.
36. Longford, N. T. (1993) Random coefficient models. New York: Oxford University Press.
37. New York Independent System Operator. (2004). Automated mitigation procedure in the day-ahead energy market. Technical Bulletin 067.
38. New York Independent System Operator. (2004). Market monitoring and performance: SMD market changes overview. Presentation.
39. New York Independent System Operator. Real-Time Scheduling Primer. http://www.nyiso.com/oasis/smd2/pdf/rts_primer.pdf.
40. Puller, S. (2006). Pricing and firm conduct in California's deregulated electricity market. Manuscript, Texas A&M University. Review of Economics and Statistics, 88(4), forthcoming.
41. Rahimi, A. F., & Sheffrin, A. Y. (2003). Effective market monitoring in deregulated electricity markets. IEEE Transactions on Power Systems, 18, 486-494.
42. Rassenti, S. J., Smith, V. L., & Wilson, B. J. (2003). Controlling market power and price spikes in electricity markets: Demand-side bidding. Proceedings of the National Academy of Science, 100, 2998-3003.
43. Sweeney, J. (2002). The California Electricity Crisis. Palo Alto: Hoover Institution Press.
44. Synapse Energy Economics (2001). Best practices in market monitoring: A survey of current ISO activities and recommendations for effective market monitoring and mitigation in wholesale electricity markets. Available at http://www.synapse-energy.com/Downloads/report-pjm-advocate-best-practices- market-monitoring.PDF.
45. Tabors, R., & Cardell, J. (2003). Ex ante and Ex post designs for electric market mitigation: Past and present experience and lessons from California. Proceedings of the 36th Hawaii international conference on system sciences. Available at http://csdl.computer.org/comp/proceedings/hicss/ 2003/1874/02/187420055.pdf.
46. Williamson, D., Jullien, C., Kiesling, L., & Staropoli, C. (2006). Investment incentives and market power: An experimental analysis. Economic Analysis Group Discussion Paper, Antitrust Division, U.S. Department of Justice. Available at SSRN: http://ssrn.com/abstract=892598.
47. Wilson, J. F. (2000). Scarcity, market power, and price caps in wholesale electric power markets. Electricity Journal, 13, 33-46.
48. Wolfram, C. (1999). Measuring duopoly power in the British electricity spot market. American Economic Review, 89, 805-826.