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2009 State of the Market Report

Competitive Assessment

Figure 80: Real-Time Market Output Gap WUMS Area – 2009

2.0%

Percentage of Capacity in Category

1.5%

1.0%

0.5%

0.0%

Offline Units Online and Quickstart

Other Top2

Other Top2

Other Top2

Other Top2

Other Top2

Other Top2

Other Top2

Other Top2

Other Top2

Other Top2

Up to 60 60 to 70 70 to 80 80 to 90 90 to 100 Up to 60 60 to 70 70 to 80 80 to 90 90 to 100

Low Threshold

High Threshold

MISO Load Level (GW)

Our analysis indicates that the output gap quantities at both threshold levels are generally below one percent of the total capacity at all locations and load levels. In general, the output gap increases with load levels because the high prices that occur at high-load levels cause a much greater share of resources to be economic. However, because this could also signal a rise in anticompetitive conduct, we investigate increases in output gap levels at higher-load levels on an ongoing basis. These investigations did not raise material competitive concerns in 2009. Finally, the figures also show that the output gap quantities for the largest two suppliers are generally comparable to or only moderately higher than for other suppliers.

Overall, these analyses and our ongoing monitoring of hourly results indicate that the supply offers in the Midwest ISO were generally very competitive in 2009. The competitive offer patterns observed in 2009 are likely due to both the market conditions and structural characteristics of the market. Surplus generation and lower load in 2009 reduced the incentive to economically withhold supply. Additionally, many of the largest suppliers in the Midwest ISO are also large LSEs, which reduces their incentive to withhold.

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