Missed Opportunity: What's Right and Wrong in the FERC Staff Report on the Midwest Price Spikes
Contrary to findings, the conditions seen in June 1998 were not that unusual. And next year could promise prices even worse (em or, for the first time, real reliability problems.
The recent report by the staff of the Federal Energy Regulatory Commission on the causes of the power price spikes that occurred in the Midwest performs an important service (em it acknowledges that in competitive markets, the price of wholesale power can be quite high in periods of peak demand.
Nevertheless, the staff went wrong in reporting that the conditions behind the price spikes were unusual.