Pacific Gas & Electric (PG&E) wanted to demonstrate to the Federal Energy Regulatory Commission (FERC) that sellers in the California electricity markets committed California Independent System Operator and Power Exchange (CAISO-PX) tariff violations during the summer of 2000. PG&E also wanted to (1) calculate a set of competitive prices that would have been expected to occur in the California electricity markets if sellers had not committed tariff violations and (2) compare those prices to the amounts actually received by sellers. Finally, the utility wanted to calculate refunds that sellers would pay to California utilities for certain types of energy transactions in order to mitigate prices charged above just and reasonable levels.
DHInfrastructure supported preparation of expert testimony on behalf of PG&E. We built a database of market bid prices and production costs, simulated dispatch of market participants during the period in question; calculated economic withholdings of power marketers, and identified anomalous bidding strategies used by power marketers that constituted tariff violations. We then analyzed the bidding behavior of specific sellers.