Information and Transparency in Wholesale Electricity Markets: Evidence from Alberta

42 Pages Posted: 19 Mar 2018

See all articles by David Brown

David Brown

University of Alberta - Department of Economics

Andrew Eckert

University of Alberta - Department of Economics

James Lin

Government of Alberta - Department of Energy

Date Written: March 17, 2018

Abstract

We examine the role of information transparency in Alberta's wholesale electricity market. Using data on firms' bidding behavior, we analyze whether firms utilize information revealed in near real-time through the Historical Trading Report (HTR), which is released 10 minutes after each hour and contains a complete (de-identified) list of every firms' bids into the wholesale market from the previous hour. We demonstrate that firms are often able to identify the offers of specific rivals by offer patterns adopted by those firms. For one of these firms, these patterns are associated with higher offer prices. This is consistent with allegations by Alberta's Market Surveillance Administrator that firms may be utilizing unique bidding patterns to reveal their identities to their rivals to elevate market prices. We show that certain firms respond to rival offer changes with a lag consistent with responding to information revealed through the HTR, and that they respond differently to different firms, suggesting that they are able to infer identification.

Keywords: Electricity, Market Power, Information, Regulation, Antitrust

JEL Classification: D43, L40, L51, L94, Q48

Suggested Citation

Brown, David and Eckert, Andrew and Lin, James, Information and Transparency in Wholesale Electricity Markets: Evidence from Alberta (March 17, 2018). USAEE Working Paper No. 18-333, Available at SSRN: https://ssrn.com/abstract=3142663 or http://dx.doi.org/10.2139/ssrn.3142663

David Brown

University of Alberta - Department of Economics ( email )

8-14 Tory Building
Edmonton, Alberta T6G 2H4
Canada

Andrew Eckert (Contact Author)

University of Alberta - Department of Economics ( email )

8-14 Tory Building
Edmonton, Alberta T6G 2H4
Canada

James Lin

Government of Alberta - Department of Energy ( email )

10th Floor, North Petroleum Plaza
9945 108 Street
Edmonton, T5K 2G6
Canada

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