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Inefficiency in deregulated wholesale electricity markets: the case of the New England ISO

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  • Lester Hadsell

Abstract

The efficiency of the New England Independent System Operator electricity market is examined. Using peak hour prices from March 2003 to February 2007, significant differences between Day Ahead (DA) and spot prices are found, indicating that profitable arbitrage opportunities existed in the DA market. It is also found that persistence of price volatility is higher in the DA market, indicating that information is not incorporated into DA prices as quickly as it is in the spot market.

Suggested Citation

  • Lester Hadsell, 2011. "Inefficiency in deregulated wholesale electricity markets: the case of the New England ISO," Applied Economics, Taylor & Francis Journals, vol. 43(5), pages 515-525.
    • Handle: RePEc:taf:applec:v:43:y:2011:i:5:p:515-525
    DOI: 10.1080/00036840802584943
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    References listed on IDEAS

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    1. Severin Borenstein & James Bushnell & Christopher R. Knittel & Catherine Wolfram, 2001. "Trading Inefficiencies in California's Electricity Markets," NBER Working Papers 8620, National Bureau of Economic Research, Inc.
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    Cited by:

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    3. Edward J. Anderson & Andrew B. Philpott, 2019. "Forward Commodity Trading with Private Information," Operations Research, INFORMS, vol. 67(1), pages 58-71, January.
    4. Haar, Lawrence, 2021. "The competitive disadvantages facing British assetless electricity retailers," Energy Policy, Elsevier, vol. 155(C).

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