Economics

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Using Auctions to Divest Generation Assets
(Elsevier Science, 1997-12) Cameron, Lisa J.; Cramton, Peter; Wilson, Robert
In most states, ratepayers will compensate utilities for their stranded costs. As a result, these costs must be measured as accurately as possible, in a manner that is easily understood by all concerned parties. We describe the options for measuring stranded costs and argue that a simultaneous ascending auction is the best approach.
Review of the Proposed Reserve Markets in New England
(Market Design, Inc., 2005-01) Cramton, Peter; Hung-po, Chao; Wilson, Robert
ISO New England proposes reserve markets designed to improve the existing forward reserve market and improve pricing during real-time reserve shortages. We support all of the main elements of the proposal. For example, we agree that little is gained by allowing reserve availability bids in the day-ahead market. Doing so greatly increases the complexity of the market without the prospect of more efficient pricing. Rather, offline reserves are most efficiently priced and awarded well in advance, as is done by the improved forward reserve market.