FERC´s standard market design: the Dynegy perspective

Summary form only given as follows. FERC has embarked on a major initiative to enhance competition and lower prices in the nation´s bulk power markets. To that end it is in the process of finalizing a standard market design (SMD). A significant challenge will be to balance the need for standardization and streamlined operations with the need for regional differences and market innovation. FERC believes that a common market framework promotes efficiency and lowers costs. It creates a reliable power system, provides mitigation for market power, offers more choices to market participants and minimizes transaction costs in seams issues. In this presentation the author presents the FERC procedures for developing the SMD, the principles that guided the development of the SMD, and the major elements of the SMD, including, the day-ahead, and real time markets, the operating reserves markets, transmission rights and the role of demand elasticity. Further, the author provides a critique of the SMD and its role in facilitating the development of wholesale and retail electricity markets.