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Enron Mail |
FYI.
-----Original Message----- From: PWPENS [mailto:pwpens@socrates.Berkeley.EDU] Sent: Monday, October 01, 2001 1:11 PM To: (Recipient list suppressed) Subject: POWER Working Paper Email Notification Service (PWPENS) _________________________________________________________________ N E W P O W E R W O R K I N G P A P E R Working Paper Series of UCEI _________________________________________________________________ POWER Working Paper Email Notification Service (PWPENS) A service of The University of California Energy Institute's Program on Workable Energy Regulation (POWER). All POWER working papers can be downloaded free of charge from the UCEI website: http://www.ucei.org Just follow the link to "POWER Research". ________________________________________ "Trading Inefficiencies in California's Electricity Markets" (October 2001) PWP-086 by Severin Borenstein, James Bushnell, Christopher R. Knittel, and Catherine Wolfram We study price convergence between the two major markets for wholesale electricity in California from their deregulation in April 1998 through November 2000, nearly the end of trading in one market. We would expect profit-maximizing traders to have eliminated persistent price differences between the markets. Institutional impediments and traders' incomplete understanding of the markets, however, could have delayed or prevented price convergence. We find that the two benchmark electricity prices in California - the Power Exchange's day-ahead price and the Independent System Operator's real-time price - differed substantially after the markets opened but then appeared to be converging by the beginning of 2000. Starting in May 2000, however, price levels and price differences increased dramatically. We consider several explanations for the significant price differences and conclude that rapidly changing market rules and market fundamentals, including one buyer's attempt to exercise a form of monopoly power, made it difficult for traders to take advantage of opportunities that ex post appear to have been profitable. Download this paper in Adobe Acrobat format: http://www.ucei.org/PDF/pwp086.pdf ________________________________________ If you would like to be removed from this list, please send an email to Mailto:pwpens@socrates.berkeley.edu and include UNSUBSCRIBE in the subject heading. If you received this email indirectly and would like to be added to this emailing list, please send an email to Mailto:pwpens@socrates.berkeley.edu and include SUBSCRIBE in the subject heading.
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