Market Power and Market Manipulation in Energy Markets PDF Download

Author: Gary Taylor (Consultant)
Publisher:
ISBN: 9780910325349
Category : Electric utilities
Languages : en
Pages :

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Author: Andrew N. Kleit
Publisher: Emerald Group Publishing
ISBN: 1787439194
Category : Business & Economics
Languages : en
Pages : 240

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Book Description
This book explores the important economic and legal questions of market manipulation that have arisen in restructured energy markets, paying particular attention to the actions of the Federal Energy Regulatory Commission.

Author: Frank A. Wolak
Publisher: World Bank Publications
ISBN:
Category : Electric power
Languages : en
Pages : 27

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Book Description
"This paper first describes those features of the electricity supply industry that make a prospective market monitoring process essential to a well-functioning wholesale market. Some of these features are shared with the securities industry, although the technology of electricity production and delivery make a reliable transmission network a necessary condition for an efficient wholesale market. These features of the electricity supply industry also make antitrust or competition law alone an inadequate foundation for an electricity market monitoring process.

Author: Huseyin Cagri Corlu
Publisher: Kluwer Law International B.V.
ISBN: 9041196048
Category : Law
Languages : en
Pages : 314

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Book Description
In the course of energy liberalisation, electricity and natural gas contracts have been separated from physical delivery, and these contracts are now traded as commodities in multilateral trading facilities. Although designed to render energy trading standardised and efficient, this system raises serious questions as to whether existing regulatory and antitrust provisions are sufficient to address market abuses that cause imbalances in demand and supply. The European Union’s (EU’s) Regulation on Wholesale Energy Market Integrity and Transparency (REMIT), adopted to combat such market manipulation, is still lacking in significant case law to bolster its effectiveness. Addressing this gap, this invaluable book provides the first in-depth analysis of market manipulation in the energy sector, offering a deeply informed understanding of the new anti-manipulation rules and their implementation and enforcement. Focusing on practices that perpetrators employ to manipulate electricity and natural gas markets and the applicability of anti-manipulation rules to combat such practices, the analysis examines such issues and topics as the following: – factors and circumstances that determine when and what market misconduct can be subject to enforcement; – the European Commission’s criteria to determine whether a particular market is susceptible to regulation; – jurisdiction of REMIT and the Market Abuse Regulation (MAR) with respect to the prohibitions of insider trading in financial wholesale energy markets; – to what extent anti-manipulation rules and EU competition law may be applied concurrently; and – types of physical and financial instruments that market participants have employed in devising their manipulative schemes. Because market manipulation is rather new in the EU context but has been prohibited and prosecuted under US law for over a century, much of the case law analysis is from the United States and greatly clarifies how anti-manipulation rules may be enforced. A concluding chapter offers policy recommendations to mitigate legal uncertainties arising from REMIT. Energy market participants, such as energy producers, wholesale suppliers, traders, transmission system operators and their counsel, and legal practitioners in the field will welcome this book’s extensive legal analysis and its clear demarcation of the objectives that REMIT seeks to accomplish with respect to energy market liberalisation.

Author: David B. Spence
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Book Description
Traditionally, American energy markets have been regulated using a combination of antitrust law and public utility law: the former has predominated in oil markets and the latter in markets for natural gas and electricity. Over time, energy markets have grown increasingly complex and competitive, due partly to changing market conditions (for example, in oil markets) and partly to the regulation (in natural gas and electricity markets). Increasingly competitive energy markets meant increased risk for energy companies, who turned to energy derivatives as a way to hedge that risk. High energy prices and charges of manipulation in 21st-century energy markets have led regulators to a new approach, one that borrows from securities regulation and focuses attention and "manipulation and deceit" by energy market participants. However, the securities model may be a bad fit for energy markets, because reliance on this new approach exposes consumers to price risks associated with the exercise of market power by sellers, risks to which they were not subject under traditional approaches to regulation. Specifically, the securities regulation model overlooks important ways in which sellers can exert market power at the expense of consumers in the absence of fraud or deceit, partly because of the way securities case law interprets "manipulation," and partly because some of the common assumptions regulators employ about the ways in which market participants respond to price changes do not apply, or apply only weakly, in some energy markets. We explore the origins of these "bad fit" problems, and their implications, in this article.

Author: United States. Congress. Senate. Committee on Energy and Natural Resources
Publisher:
ISBN:
Category : Consumer protection
Languages : en
Pages : 108

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Book Description

Author: Sebastian Eyre
Publisher:
ISBN: 9781783479771
Category : Competition
Languages : en
Pages : 0

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Book Description
Featuring an original introduction by the editors, these carefully-selected essays explore the main issues surrounding competition and regulation in electricity markets. The industry is experiencing irresistible forces of change, driven by energy policy objectives; a reassessment of market regulation in the face of high-energy prices; and the response to consumer pressure to agree on what constitutes a fair price for energy. This volume identifies the key articles that underpin the debate across the industries supply chain (generation, supply and networks) from a regulatory perspective (including market power and incentive regulation). The collection then considers the overall impact of liberalisation and future developments.

Author: Frank A. Wolak
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Book Description
This paper first describes those features of the electricity supply industry that make a prospective market monitoring process essential to a well-functioning wholesale market. Some of these features are shared with the securities industry, although the technology of electricity production and delivery make a reliable transmission network a necessary condition for an efficient wholesale market. These features of the electricity supply industry also make antitrust or competition law alone an inadequate foundation for an electricity market monitoring process. This paper provides examples of both the successes and failures of market monitoring from several international markets. More than 10 years of experience with the electricity industry restructuring process has shown that market failures are more likely and substantially more harmful to consumers than other market failures because of how electricity is produced and delivered and the crucial role it plays in the modern economy. Wholesale market meltdowns of varying magnitudes and durations have occurred in electricity markets around the world, and many of them could have been prevented if a prospective market monitoring process backed by the prevailing regulatory authority had been in place at the start of the market.

Author: Sandeep Vaheesan
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Book Description
State and federal initiatives have opened the American electric power industry to competition over the past four decades. Although the process has not occurred uniformly across the country, wholesale markets exist everywhere today. Independent power producers can now construct generation and sell their output to utilities and direct purchasers through bilateral contracts. In many regions, centralized power markets have also been established and facilitate the sale of billions of dollars in electricity annually through hourly auctions. As market forces have replaced direct price regulation in electricity, antitrust enforcement, however, has not expanded its role commensurately. Even though a lack of competition has been a chronic problem in power markets and arguably undermined the purpose of industry restructuring, the courts have invoked the filed rate doctrine to prohibit private antitrust suits against generators and other market participants accused of collusive behavior. The courts have held that federal and state regulation is adequate to maintain competitive markets and have questioned their own ability to deter anticompetitive behavior. The courts have used this faulty line of regulatory adequacy combined with judicial deficiency to immunize power generators from antitrust damages liability. While Congress or the Supreme Court should abolish the doctrine and allow for the antitrust laws to be fully enforced in electricity markets, eliminating this immunity is not sufficient to create competitive power markets and prevent repeats of the market manipulation seen in the California and Texas markets. The existence of private treble damages suits could have deterred collusive conduct like the anticompetitive financial arrangement between two major generators in the New York City wholesale market between 2006 and 2008. Yet, the antitrust laws are comparatively powerless to remedy the principal forms of anticompetitive behavior seen in power markets. Antitrust jurisprudence in the United States does not proscribe the exercise of unilateral market power and places high hurdles to finding liability against parties accused of colluding tacitly. Given the limitations of traditional private antitrust remedies, federal and state regulators must focus on creating competitive market structures. They can take three concrete steps toward this end: police generator consolidation more carefully, encourage expansions of the transmission grid, and expose more ratepayers to price signals. Vigorous application of these broader competition policy measures is necessary to redeem a restructuring project whose results thus far have been, at best, uncertain.

Author: Panagiotis Tsangaris
Publisher: Springer
ISBN: 3662555131
Category : Law
Languages : en
Pages : 213

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Book Description
This book examines the issue of capacity withdrawals in the electricity wholesale market. Electricity generators can exercise market power in the wholesale market either by withdrawing generation capacity, or by pricing above competitive levels in order to achieve a higher market price and, thereby, increase revenues. After a comprehensive explanation of capacity withdrawal practices and the issues that arise when proceeding under competition law, the book analyses whether an increased state of transparency, as provided for in the REMIT and Regulation 543/2013, could facilitate the efficient functioning of electricity wholesale markets and the investigation of capacity withdrawal practices. It also examines the effect of the prohibition of market manipulation as prescribed in the REMIT in dealing with abusive capacity withdrawals in the electricity wholesale market.