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Abstract

International Perspectives on Electricity Market Monitoring and Market Power Mitigation

The Review of Network Economics

Vol. 6, Issue 3 - September 2007, pp 397 - 424



Authors
  José A. García
The Brattle Group

James D. Reitzes
The Brattle Group
E-mail: [email protected]

Abstract
  We review the different market monitoring and market-power mitigation policies that arise in world electricity markets. Regulators for electricity markets apparently respond to differences in underlying market structure and design features when choosing between ex-ante (that is, rule-based) behavioral restrictions as opposed to ex-post enforcement (that is, investigations and sanctions) as the principal means for deterring abuses of market power. Particular design features that influence market-monitoring policies are whether the market is one-part (energy only) versus two-part (energy and capacity), and whether there is centralized or bilateral trading. Information-disclosure requirements also are a key element of market monitoring.

Keywords: Electricity, market power, market monitoring, regulation, two-part pricing, bilateral trading.
JEL Codes: L40, L41 L51, L94, K21, K23.

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