Message-ID: <11743468.1075852503059.JavaMail.evans@thyme> Date: Tue, 18 Sep 2001 06:26:08 -0700 (PDT) From: d..steffes@enron.com To: l..nicolay@enron.com, alan.comnes@enron.com Subject: RE: Cornell University Experiment on Market Prices Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Steffes, James D. X-To: Nicolay, Christi L. , Comnes, Alan X-cc: X-bcc: X-Folder: \JSTEFFE (Non-Privileged)\Steffes, James D.\Sent Items X-Origin: Steffes-J X-FileName: JSTEFFE (Non-Privileged).pst Guys -- Don't know if we need to do our own study. Probably want to get with this prof to discuss. I agree with his analysis that the electricity markets needs a bunch of sellers - means we should push for distributed generation. Thanks -----Original Message----- From: Nicolay, Christi L. Sent: Monday, September 17, 2001 5:55 PM To: Steffes, James D.; Comnes, Alan Subject: FW: Cornell University Experiment on Market Prices This study also concludes that due to the inelasticity of demand, there needs to be a great deal of sellers (more than in a typical market) to ensure competitive markets. I am not sure that we want to use this study for our purposes; however, need to be aware it is out there as we discuss any new methods of assessing market power. Do we need to conduct our own study? -----Original Message----- From: Yeung, Charles Sent: Monday, September 10, 2001 2:24 PM To: Bestard, Jose; Ingersoll, Richard; Novosel, Sarah; Comnes, Alan; Kaufman, Paul; Rodriquez, Andy; Perrino, Dave; Walton, Steve; Nicolay, Christi L.; Lindberg, Susan; Guerrero, Janel; Will, Lloyd Cc: Shapiro, Richard; Steffes, James D. Subject: Cornell University Experiment on Market Prices Cornell has published a report of 4 experiments conducted to test market trading behavior and its impact on electricity prices under different price auctions. 1) uniform price auction 2) uniform price with interruptible loads 3) discriminative auction - generators are paid their actual offers 4) soft-cap auction The study is fascinating as real subjects were employed and paid real dollars based on their trading performance. The findings are consistent with our arguments against price caps - particularly soft caps as installed in California. I think there is some "empirical" data that can be used in our arguments against price caps. More variations of the auctions aimed at testing some assumptions used in these 4 experiments are planned, and industry is invited to participate in the experiments. You can get the document directly at: www.pserc.cornell.edu << File: cornell market experiment.pdf >>