Modeling regional electric power markets and market power

Robert F. Cope, David E. Dismukes and Rachelle F. Cope
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Robert F. Cope: Department of Management, Southeastern Louisiana University, Hammond, LA, USA, Postal: Department of Management, Southeastern Louisiana University, Hammond, LA, USA
David E. Dismukes: Center for Energy Studies, Louisiana State University, Baton Rouge, LA, USA, Postal: Center for Energy Studies, Louisiana State University, Baton Rouge, LA, USA
Rachelle F. Cope: Department of Management, Southeastern Louisiana University, Hammond, LA, USA, Postal: Department of Management, Southeastern Louisiana University, Hammond, LA, USA

Managerial and Decision Economics, 2001, vol. 22, issue 8, 411-429

Abstract: This paper develops a nonlinear, mathematical programming model for estimating production decisions in an open access, regional power market. Our approach allows one to estimate competitive power market equilibrium prices, which in turn offers empirical conclusions about marginal generation facilities, transmission interconnection congestion, and most importantly, load pockets and market power. Sensitivity analyses are conducted by subjecting the model to changes in production costs, peak hour demand, power imports, and transmission interconnection price assumptions. We then consider the issue of a firm's ability to exercise market power and the implications it may have on regional equilibrium power prices. The Louisiana power market is used as a case study for our work. Copyright © 2001 John Wiley & Sons, Ltd.

Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:22:y:2001:i:8:p:411-429

DOI: 10.1002/mde.1031

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