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Information and transparency in wholesale electricity markets: evidence from Alberta

David Brown (), Andrew Eckert () and James Lin ()
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Andrew Eckert: University of Alberta
James Lin: Government of Alberta

Journal of Regulatory Economics, 2018, vol. 54, issue 3, 292-330

Abstract: Abstract We examine the role of information transparency in Alberta’s wholesale electricity market. Using data on firms’ bidding behavior, we analyze whether firms utilize information revealed in near real-time through the Historical Trading Report (HTR), which is released 10 min after each hour and contains a complete (de-identified) list of every firms’ bids into the wholesale market from the previous hour. We demonstrate that firms are often able to identify the offers of specific rivals by offer patterns adopted by those firms. For one of these firms, these patterns are associated with higher offer prices. This is consistent with allegations by Alberta’s Market Surveillance Administrator that firms may be utilizing unique bidding patterns to reveal their identities to their rivals to elevate market prices. We show that certain firms respond to rival offer changes with a lag consistent with responding to information revealed through the HTR, and that they respond differently to different firms, suggesting that they are able to infer identification.

Keywords: Electricity; Market power; Information; Regulation; Antitrust (search for similar items in EconPapers)
JEL-codes: D43 L40 L51 L94 Q48 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:kap:regeco:v:54:y:2018:i:3:d:10.1007_s11149-018-9372-z