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Electric rates lowered by removal of reverse auction

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Electric rates lowered by removal of reverse auction Empty Electric rates lowered by removal of reverse auction

Post  adamp Mon May 25, 2009 12:53 am

This article examines how the removal of ComEd's power to purchase electricity from suppliers via reverse auction and instead giving that power to a state commission has seemed to lower power prices in the state of Illinois. It would be interesting to analyze all the data here and see if the removal of a reverse auction is actually what's responsible for the lowering of prices. It seems that the electricity market could be one that is very much subject to collusion among suppliers in an effort to keep prices high across the board, since there are so few suppliers. But it is certainly counterintuitive to me as an economist to think that a government commission could provide more efficiency than a market auction.

adamp

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Join date : 2009-04-11

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