Deregulation of the electricity sector has resulted in conflict between the economic aims of creating competitive … wholesale and retail markets, and an engineering focus on reliability of supply. The paper starts by deriving the optimal prices … level of rationing they prefer contingent on real time prices. It then examines the assumptions required for a competitive …

During the Summer of 2000, wholesale electricity prices in California were nearly 500% higher than they were during the … explain this increase in wholesale electricity prices. We simulate competitive benchmark prices for Summer of 2000 taking … same months in 1998 or 1999. This price explosion was unexpected and has called into question whether electricity …