Did the introduction of a nodal market structure impact wholesale electricity prices in the Texas (ERCOT) market?

J. Zarnikau*, Chi-Keung WOO, R. Baldick

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

22 Citations (Scopus)

Abstract

Regression analysis suggests that zonal averages of locational marginal prices under the nodal market are about 2 % lower than the balancing energy prices that would occur under the previous zonal market structure in ERCOT. The estimates for the nodal market price effects are found after controlling for such factors as natural gas prices, total system load levels, non-dispatchable generation levels, the treatment of local congestion costs, and the treatment of the revenues received by the market from the auctioning of transmission rights. Our finding is limited to periods which are not characterized by price spikes in the wholesale market.

Original languageEnglish
Pages (from-to)194-208
Number of pages15
JournalJournal of Regulatory Economics
Volume45
Issue number2
DOIs
Publication statusPublished - Apr 2014

Scopus Subject Areas

  • Economics and Econometrics

User-Defined Keywords

  • Deregulation
  • Electricity market restructuring
  • ERCOT
  • Locational marginal pricing

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