A Regional Approach to Market Monitoring in the West

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Market monitoring involves the systematic analysis of pricesand behavior in wholesale power markets to determine when and whetherpotentially anti-competitive behavior is occurring. Regional TransmissionOrganizations (RTOs) typically have a market monitoring function. Becausethe West does not have active RTOs outside of California, it does nothave the market monitoring that RTOs have. In addition, because the Westoutside of California does not have RTOs that perform centralized unitcommitment and dispatch, the rich data that are typically available tomarket monitors in RTO markets are not available in the West outside ofCalifornia. This paper examines the feasibility of market monitoring inthe West outside of California ... continued below

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Barmack, Matthew; Kahn, Edward; Tierney, Susan & Goldman, Charles October 1, 2006.

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Market monitoring involves the systematic analysis of pricesand behavior in wholesale power markets to determine when and whetherpotentially anti-competitive behavior is occurring. Regional TransmissionOrganizations (RTOs) typically have a market monitoring function. Becausethe West does not have active RTOs outside of California, it does nothave the market monitoring that RTOs have. In addition, because the Westoutside of California does not have RTOs that perform centralized unitcommitment and dispatch, the rich data that are typically available tomarket monitors in RTO markets are not available in the West outside ofCalifornia. This paper examines the feasibility of market monitoring inthe West outside of California given readily available data. We developsimple econometric models of wholesale power prices in the West thatmight be used for market monitoring. In addition, we examine whetherproduction cost simulations that have been developed for long-runplanning might be useful for market monitoring. We find that simpleeconometric models go a long ways towards explaining wholesale powerprices in the West and might be used to identify potentially anomalousprices. In contrast, we find that the simulated prices from a specificset of production cost simulations exhibit characteristics that aresufficiently different from observed prices that we question theirusefulness for explaining price formation in the West and hence theirusefulness as a market monitoring tool.

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  • Report No.: LBNL--61313
  • Grant Number: DE-AC02-05CH11231
  • DOI: 10.2172/900946 | External Link
  • Office of Scientific & Technical Information Report Number: 900946
  • Archival Resource Key: ark:/67531/metadc877340

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  • October 1, 2006

Added to The UNT Digital Library

  • Sept. 22, 2016, 2:13 a.m.

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  • Sept. 30, 2016, 2:31 p.m.

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Barmack, Matthew; Kahn, Edward; Tierney, Susan & Goldman, Charles. A Regional Approach to Market Monitoring in the West, report, October 1, 2006; Berkeley, California. (digital.library.unt.edu/ark:/67531/metadc877340/: accessed September 23, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.