Contents in Brief    List of Results and Fallacies Preface Acronyms and Abbreviations Symbols xiv xviii xx xxii Part 1. Power Market Fundamentals Prologue Why Deregulate? What to Deregulate Pricing Power, Energy, and Capacity Power Supply and Demand 2 6 17 30 40 What Is Competition? Marginal Cost in a Power Market Market Structure Market Architecture Designing and Testing Market Rules 49 60 74 82 93 Part 2. Reliability, Price Spikes and Investment Reliability and Investment Policy Price Spikes Recover Fixed Costs Reliability and Generation Limiting the Price Spikes Value-of-Lost-Load Pricing 108 120 133 140 154 Operating-Reserve Pricing Market Dynamics and the Profit Function Requirements for Installed Capacity Inter-System Competition for Reliability Unsolved Problems 165 174 180 188 194 Part 3. Market Architecture Introduction The Two-Settlement System Day-Ahead Market Designs Ancillary Services The Day-Ahead Market in Theory 202 208 217 232 243 The Real-Time Market in Theory The Day-Ahead Market in Practice The Real-Time Market in Practice The New Unit-Commitment Problem The Market for Operating Reserves 254 264 272 289 306 Part 4. Market Power Defining Market Power Exercising Market Power Modeling Market Power 316 329 337 Designing to Reduce Market Power Predicting Market Power Monitoring Market Power 345 356 365 Part 5. Locational Pricing Power Transmission and Losses Physical Transmission Limits Congestion Pricing Fundamentals Congestion Pricing Methods Congestion Pricing Fallacies 374 382 389 395 404 Refunds and Taxes Pricing Losses on Lines Pricing Losses at Nodes Transmission Rights 411 417 424 431 Glossary References Index     443 455 460