Please use this identifier to cite or link to this item:

RTO Governance Structures Can Affect Capacity Market Outcomes

File Size Format  
0304.pdf 1.77 MB Adobe PDF View/Open

Item Summary

Title:RTO Governance Structures Can Affect Capacity Market Outcomes
Authors:Yoo, Kyungjin
Blumsack, Seth
Keywords:Policy, Markets, and Computation
electricity markets
regional transmission organizations
stakeholder processes
show 1 morevoting models
show less
Date Issued:07 Jan 2020
Abstract:Regional Transmission Organizations (RTOs), which coordinate delivery for over two-thirds of the electricity consumed in the U.S., are required by the FERC to employ stakeholder-driven mechanisms to establish market and operational rules. These “governance structures” set up a quasi-political process for determining which market rules are adopted and which are not. This study shows how governance systems are not simply administrative constructs but have real impacts – the details of how the market rules are made will ultimately affect market outcomes. Using the capacity market in the PJM Interconnection as a case study, we model the preferences of individual stakeholders over different capacity market designs, under different decision rules for which capacity market design is implemented. We compare capacity market design choices under PJM’s current decision system, which requires a super-majority in a sector-weighted voting context to implement a new market rule, with the decision systems used in the New York ISO and also under systems of preferential voting. This voting model is integrated with a model of capacity market clearing which allows us to demonstrate how different decision systems matter in terms of installed capacity and capacity market outcomes.
Pages/Duration:10 pages
Rights:Attribution-NonCommercial-NoDerivatives 4.0 International
Appears in Collections: Policy, Markets, and Computation

Please email if you need this content in ADA-compliant format.

This item is licensed under a Creative Commons License Creative Commons