Why haven’t reliability markets developed?
Jonathan Lesser is a partner and Guillermo Israilevich is a manager with Bates White LLC, an economic and litigation consulting firm in Washington, D.C. Although Dr. Lesser has testified in Devon Power LLC, et al. (Docket No. ER03-563-030), the opinions in this article are not sponsored by any market participant. Contact Dr. Lesser at firstname.lastname@example.org and Dr. Israilevich at email@example.com.
Ask two economists to define electric reliability, and you may get three different answers. That’s bad, but better than asking two engineers, who may bombard you with technical acronyms. So, the first step in discussing markets for reliability is to agree on a workable definition. Only then does it make sense to discuss whether such markets are needed, and if so, why they haven’t already sprung up by themselves.