Article, Refereed Journal
Did the introduction of a nodal market structure impact wholesale electricity prices in the Texas (ERCOT) market?
Journal of Regulatory Economics, vol. 45, no. 2, April 2014, pp. 194
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.
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