A firm energy market for Colombia is presented. Firm energy—the ability to provideenergy in a dry period—is the product needed for reliability in Colombia’s hydrodominatedelectricity market. The firm energy market coordinates investment in newresources to assure that sufficient firm energy...

We present a simulation analysis of the proposed Colombian firm energy market. The mainpurpose of the simulation is to assess the risk to suppliers of participation in the market. We alsoare able to consider variations in the market design, and assess the impact of alternative...

Wholesale electricity markets are commonly organized around a spot energy market.Buyers and suppliers submit bids and offers for each hour and the market is cleared atthe price that balances supply and demand. Buyers with bids above the clearing pricepay that price, and suppliers with offers...

We argue that a capacity market is needed in most restructured electricitymarkets, and present a design that avoids problems found in the early capacitymarkets. The proposed market only rewards capacity that contributes toreliability as demonstrated by its performance during hours in which there...

Competitive bidding for electric power is maturing. Increasing numbers of utilities are soliciting proposals from private suppliers. The amount of capacity being sought is increasing, and potential suppliers appear to be abundant. Analysis of these developments still remains limited. Evidence on...

The electricity industry in the US today is at a crossroads. The restructuring debate going on in most regions has made it clear that the traditional model of vertically integrated firms serving defined franchise areas and regulated by state commissions may not be the pattern for the future. The...

Performance-Based Ratemaking (PBR) is a form of utility regulation that strengthens the financial incentives to lower rates, lower costs, or improve nonprice performance relative traditional regulation, which the authors call cost-of-service, rate-of-return (COS/ROR) regulation. Although the...

This report reviews recent DSM shareholder incentive designs and performance at 10 US utilities identifies opportunities for regulators to improve the design of DSM shareholder incentive mechanisms to increase the procurement of cost-effective DSM resources. We develop six recommendations: (1)...

This paper demonstrates that financial transmission rights allow their owners to capture at least a portion, and sometimes all, of the congestion rents. This extends work in this area by Shmuel Oren which was limited to the case in which generators could not purchase financial transmission...

Decoupling revenues from sales is an important regulatory option under consideration by regulators seeking to transform utilities from sellers of a least-cost energy commodity to providers of least-cost energy services. This report examines decoupling from three perspectives. First, the authors...