E3 advises system operators, regulators, and market participants on how wholesale electricity markets are designed. We work on capacity constructs and resource accreditation, energy and ancillary service market reform, scarcity pricing, market power mitigation, and the rules governing how storage, demand response, and large flexible loads participate. We have supported market design work in PJM, MISO, ERCOT, NYISO, CAISO, ISO-NE, and AESO, through stakeholder processes, commission proceedings, and FERC filings.
On the capacity side, we set reliability standards, develop accreditation methods that measure each resource’s marginal contribution during high-risk periods, and specify the parameters that define a capacity construct: season definitions, demand curves, forward offer obligations, performance definitions, and penalties. Several factors change which resources get built: whether ELCC is marginal or average, how interactive effects between solar and storage are allocated, and how resource classes are drawn. On the energy and ancillary service side, we design reserve products for systems with high forecast error, scarcity pricing and price caps, day-ahead commitment structures, and market power mitigation. The better those markets perform, the less the capacity construct has to cover.
We simulate proposed rules in loss-of-load probability and production cost models to show what each option delivers in reliability, system cost, and revenue by resource class. The most accurate and economically efficient designs are usually the most complex to implement, so we weigh implementation burden alongside the quantitative results. Market designs also have to survive a stakeholder process and a regulator. We draft the strawman designs and whitepapers, present in public workshops, and provide expert testimony before FERC and state commissions.
Arne Olson
Zachary Ming
