Publications

    Hogan, William W.Back Cast of Interim Solution B+ to Improve Real-Time Scarcity Pricing: White paper.” In, 2013.Abstract
    The Public Utility Commission of Texas (PUCT) has requested that ERCOT perform a back cast of an interim proposal that will approximate Real-Time co-optimization of energy and Ancillary Services (AS). This interim proposal has been described as the “Interim Solution B+” and is intended to be a more appropriate method of pricing scarcity during conditions of low operating reserves in Real-Time. This back cast approximates the pricing outcomes and estimates what the market impacts may have been if “Interim Solution B+” had been in place for the years 2011 and 2012. This analysis builds off of the previous “Interim Solution B” back cast that was filed by ERCOT on February 13, 2013.
    Hogan, William W.Electricity Scarcity Pricing Through Operating Reserves: An ERCOT Window of Opportunity.” In, 2012. Publisher's VersionAbstract
    Texas has a window of opportunity to complement its resource adequacy initiatives with an accelerated program to adopt an operating reserve demand curve. Suppressed prices in real-time markets provide inadequate incentives for both generation investment and active participation by demand bidding. An operating reserve demand curve developed from first principles would improve reliability, support adequate scarcity pricing, and be straightforward to implement within the framework of economic dispatch. This approach would be fully compatible with other market-oriented policies, the existing Texas “energy only” market design, and the proposed options for long-term resource adequacy.
    of Service, New York State Department Public. “Staff Report on the State of Competitive Energy Markets: Progress To Date and Future Opportunities.” In, 2006.Abstract

    The restructuring of the energy industry from regulated vertically-integrated monopolies to competitive markets has been described as "one of the largest single industrial reorganizations in the history of the world." With 9.4 million residential and 1.2 million business electric and natural gas accounts able to choose among a number of energy providers, New York State is recognized as a leader in this area. New York has adopted a flexible approach which has allowed policies to be guided and shaped by the successes and challenges experienced in this and other states, and by continuously evolving market conditions.

    This approach has required an ongoing appraisal of the status of New York's markets and the identification of further steps to be taken to promote the long-range vision adopted by the New York State Public Service Commission (NYPSC or the Commission). As a part of that ongoing effort, this report assesses the current state of New York's wholesale electric markets and retail electric and gas markets, describes progress that has been made over the past several years in creating such markets, and identifies opportunities for continued progress toward robust competition in New York State's energy industry.

    Joskow, Paul, and Jean Tirole. “Retail Electricity Competition.” In, 2005. Publisher's VersionAbstract

    We analyze a number of unstudied aspects of retail electricity competition. We first explore the implications of load profiling of consumers whose traditional meters do not allow for measurement of their real time consumption, when consumers are homogeneous up to a scaling factor. In general, the combination of retail competition and load profiling does not yield the second best prices given the non price responsiveness of consumers. Specifically, the competitive equilibrium does not support the Ramsey two-part tariff. By contrast, when consumers have real time meters and are billed based on real time prices and consumption, retail competition yields the Ramsey prices even when consumers can only partially respond to variations in real time prices. More complex consumer heterogeneity does not lead to adverse se1ection and competitive screening behavior unless consumers have real time meters and are not rational. We then examine the incentives competitive retailers have to install one of two types of advanced metering equipment. Competing retailers overinvest in real time meters compared to the Ramsey optimum, but the investment incentives are constrained optimal given load-profiling and retail competition. Finally, we consider the effects of physical limitations on the ability of system operators to cut off individual customers. Competing retailers have no incentive to determine the aggregate value of non-interruption of consumers in the zones they serve, preferring instead to free ride on other retailers serving consumers in the same zones. 

     

    Holmberg, Pär. “Asymmetric Supply Function Equilibrium with Constant Marginal Costs.” In, 2005. Publisher's VersionAbstract
    This paper analytically derives a Supply Function Equilibrium (SFE) of a real-time electricity market with multiple firms and asymmetric production capacities. There is a unique SFE, which is piece-wise symmetric when firms have identical constant marginal costs. It is believed that some of the properties of the derived SFE are valid for real-time markets in general. FirmsÕ capacity constraints bind at different prices. Still, firms with non-binding capacity constraints have smooth residual demand. Approximating an asymmetric real-time market with a symmetric one, tends to overestimate mark-ups for small positive imbalances and underestimate mark-ups for large positive imbalances.
    Alexander, Barbara. “Part One: An Analysis of Residential Energy Markets in Georgia, Massachusetts, Ohio, New York and Texas.” In, 2002.Abstract

    Excerpt from the Executive Summary:

    The five state programs examined in Part One include: Georgia’s natural gas competition program at Atlanta Gas Light Co., New York’s Consolidated Edison’s electric restructuring program, Massachusetts’ electric competition program (statewide), Ohio’s electric competition program (statewide), and Texas’ electric competition program (statewide). Part One analyzes the terms of service provided to residential customers through both Default Service and the offers made by competitive suppliers; the consumer protection programs and policies adopted by each state; the extent of the development of the retail market; and the scope and type of competitive suppliers who have sought to obtain residential customers.

    Rose, Kenneth, and Venkata Bujimalla. 2002 Review of Electric Power Markets, 2002.Abstract

    Excerpt from the Executive Summary:

    News of Enron’s accounting improprieties and subsequent collapse have been part of the continued eventful last two years for the electric supply industry. Shortly after the skyrocketing prices in California and the West of 2000 and 2001 had subsided, the Enron developments began to come to light in late 2001. This has lead to investigations by several federal agencies and revelations of improper trading and reporting practices of other energy companies. As a result of this and reduced demand for electricity, the industry has been hit by a “credit crunch” as investors have become more wary and has forced many energy companies to cut back on trading activities, sell assets, and reduce future investments in order to improve their balance sheets. In the face of all the industry turmoil, while many retail markets remain relatively inactive, particularly for smaller residential customers, overall market activity has increased from last year. Wholesale markets since California settled down, continue in general to function well from an operational standpoint, however, there continues to be strong evidence that significant market power is being exercised in all markets that have been examined.