Subject: Abstract
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked]
Date: Sun, 1 Oct 2000 22:44:00 -0700 (PDT)

Shmuel,

This is the abstract  for  my presentation on the 23rd of October.
I am in London and Paris this week. I can be reached at my 
private E-mail address [email-masked].

Please, feel free to suggest modifications to the abstract.

Vince

******************************************************************

> The last three years were characterized by exceptionally high volatility of
> the power prices in the US markets. The market developments have created a
> number of unique challenges for energy industry economists. One immediate
> question we have to answer is how to measure volatility of energy prices.
> Although we can all agree that the prices in the power markets are
> characterized by high variability, the traditional measures used in 
financial
> economics (annualized standard deviation of log price returns) may not fit
> well electricity prices. The second challenge is to explain the sources of
> high price volatility and to answer the question to what extent it can be
> attributed to problems that can be addressed in the long run. Such problems
> include flaws in market design that allow some market participants to abuse
> market power, limited availability and/or unequal access to transmission,
> temporary shortages of generation capacity. Some factors underlying high
> volatility of electricity prices may be of permanent nature and may be a
> necessary price to pay for increased market efficiency and expanded customer
> choice.