A market monitoring system for the open electricity markets

With the growing pressure from market participants, utilities, consumers and government, a timely review and analysis of existing open electricity markets in the USA becomes very necessary. The energy crisis in California and problems in other open electricity markets are urgently demanding a sensitive and robust market monitoring system able to provide the right warning signals in time. Knowledge of existing market policies, bidding behaviors, generation ownership concentration, transmission congestion and market power etc. is the key. This system will help provide a reliable and fair competing playground for market players, and lower electricity prices for consumers. This system should also provide the incentives for investors to improve the power system (generation, transmission and distribution) in the long run. In this paper, many factors causing the energy price spikes, such as market rules, cost recovery, transmission congestion, lack of dispatchable demands, unbalanced demand and supply, market power, volatility and uncertainty, have been addressed. A comprehensive and dynamic market monitoring system has been proposed in this paper to protect and improve the open electricity markets. Several important indices have been proposed as part of the market monitoring system, such as two market clearing price monitoring indices, one transmission congestion monitoring index, and an energy-based market power monitoring index. Examples and simulation results are presented throughout the paper to illustrate the ideas.