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 journalJournal articlepeer-review

    32 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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