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Latest ISO/RTO State of the Market Reports Independently Find Organized Regional Electricity Markets Fair And Competitive

Every year, the Independent Market Monitor for each organized wholesale electricity market releases a rigorous, in-depth assessment of the competitive performance, design and operation of the market run by its Independent System Operator (ISO) or Regional Transmission Organization (RTO). With a report on the Electricity Reliability Council of Texas (ERCOT) released just last month, all six of this year's State of the Market Reports using 2007 data are completed. Each documents that the ISO/RTO in question produced fair and competitive results. While two-thirds of the country's consumers are served by an ISO or RTO, tens of millions in the Southeast and West are not. As a result, these consumers lack the full benefits of competitive wholesale markets, including in-depth assessments by independent market monitors.

PJM INTERCONNECTION

  • "The overall results support the conclusion that prices in PJM are set, on average, by marginal units operating at or close to their marginal costs. This is strong evidence of competitive behavior." (2007 State of the Market Report, Volume 1: Introduction, Market Monitoring Unit, March, 2008; p.8)


  • "The pattern of prices within days and across months and years illustrates how prices are directly related to demand conditions and thus also illustrates the potential significance of price elasticity of demand in affecting price." (p. 10)


MIDWEST ISO

  • "The Midwest ISO markets have substantially improved the commitment and dispatch of generating resources in the Midwest. The improved commitment is largely due to the day-ahead market, which provides a market-based process to commit generating resources and supply load. Ninety-seven percent of the generation dispatched in 2007 was scheduled through the day-ahead market." (2007 State of the Market Report, Potomac Economics, July, 2008; p. vi)


  • "The energy markets cause energy to be produced from the most economic resources given the limits of the transmission system. This includes employing the lowest-cost redispatch options to manage congestion and allowing the transmission system to be fully utilized." (p. i)


CALIFORNIA ISO

  • "For the sixth consecutive year (2002-2007), California's wholesale energy markets remained stable and competitive. Over the past seven years (2001-2007), approximately 14,900 MW of new generation has been added to the CAISO Control Area, enabling the retirement of 5,500 MW of older inefficient generation, resulting in a net increase of 9,400 MW of new generation. Additionally, another 1,800 MW of new generation is projected to be operational in 2008." (Market Issues and Performance: 2007 Annual Report, Department of Market Monitoring, April 2008; p. 1)


NEW YORK ISO

  • "The energy and ancillary services (operating reserves and regulation) markets performed competitively in 2007." (2007 State of the Market Report - New York Electricity Markets, Potomac Economics, May 2008; p. 5)


  • "Day-ahead and real-time markets jointly optimize energy, operating reserves and regulation." (p. 2)


ISO NEW ENGLAND

  • "In general, the day-ahead and real-time markets operated efficiently in 2007 with prices that reflected underlying market fundamentals. Electricity prices in New England have been strongly correlated with changes in underlying fuel prices, as one would expect in a well-functioning market." (2007 Assessment of the Energy Markets in New England, Potomac Economics, June 2008; p. 2)


SOUTHWEST POWER POOL

  • "SPP launched its Energy Imbalance Service (EIS) Market on February 1, 2007. We not only believe that the EIS Market has been successful, but we also believe the process by which it was developed was successful. The EIS Market was designed and developed through a transparent, member-driven process with significant oversight by SPP's Board of Directors and by the Regional State Committee (RSC). Throughout the development, SPP worked closely with its members, the Board, the RSC, and with the FERC to address any concerns before market start." (2007 State of the Market Report, Boston Pacific Company, Inc., April 2008; p. 82)


  • "Over the first year of operation [of the EIS market], benefits have been realized. First, as shown in a separate report, actual market data indicate that there were trade benefits (production cost savings) over $100 million. Put simply, this is the result of the EIS Market dispatching up more efficient, lower-priced units and dispatching down higher-priced, less efficient units. Second, we are also seeing that the market is resolving the majority of the congestion in the EIS Market footprint." (Pg. 83)


ELECTRIC RELIABILITY COUNCIL OF TEXAS

  • "The overall competitive performance of the market exhibited continued improvement in 2007, which will tend to lower prices" (2007 State of the Market Report for the ERCOT Wholesale Electricity Markets, Potomac Economics, August 2008; Pg. vi)


  • "The results in the figure above indicate very competitive market outcomes in 2007[showing] significant improvement over 2005 and 2006" (Pg. xxxiv)


SOUTHEAST

No Market Monitor

WEST (OUTSIDE CALIFORNIA)

No Market Monitor

Latest ISO/RTO State of the Market Reports Independently Find Organized Regional Electricity Markets Fair And Competitive

CONTACT: JOHN SHELK
(202) 349-0154or 703-472-8660

EPSA is the national trade association representing competitive power suppliers, including generators and marketers. These suppliers, who account for nearly 40 percent of the installed generating capacity in the United States, provide reliable and competitively priced electricity from environmentally responsible facilities serving global power markets. EPSA seeks to bring the benefits of competition to all power customers.