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11 - Market Power

Published online by Cambridge University Press:  24 February 2022

Todd S. Aagaard  and
Andrew N. Kleit
Todd S. Aagaard
Affiliation:
Villanova University Charles Widger School of Law
Andrew N. Kleit
Affiliation:
Pennsylvania State University
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Summary

The exercise of market power is a continuing problem in electricity markets. This is especially true for capacity markets. To deal with this challenge, each of the Northeast regional transmission organizations (RTOs) uses a variant of the pivotal supplier test to determine if market power exists. Which variant is used has important implications for the risks of error in the analysis of market power. Where market power is found, it needs to be mitigated. How such mitigation takes place in capacity markets has posed difficulties for the RTOs.

Type
Chapter
Information
Electricity Capacity Markets , pp. 190 - 204
Publisher: Cambridge University Press
Print publication year: 2022

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