Manipulation of Illinois Wholesale Power Auction?

Michael Giberson

A reader (in the comments here) asked whether we had any opinions on the complaint filed last week by the Illinois Attorney General alleging manipulation of the Illinois power procurement auction. Here’s the basic story, via Business Week and the Associated Press:

Last year, the Illinois Commerce Commission oversaw a reverse auction, where power suppliers offered the lowest prices at which they would sell electricity to Ameren and ComEd, which then sell the electricity to consumers.

The auction produced unexpectedly high increases over previous rates — 22 percent higher on average for ComEd customers and 55 percent higher for some Ameren customers. For some individual customers, the increases turned out to be even more.

[Attorney General Lisa] Madigan argued the huge increases must be a result of corporate misconduct. She said the average prices offered by wholesalers — which include the parent companies of ComEd and Ameren — are twice the actual costs of producing the electricity.

Generally speaking, it is impossible to come to a clear conclusion based upon the public version of the complaint documents — all of the potentially exciting parts are blacked out. (If any reader happens to have an un-redacted version to share, I could provide a better informed opinion.)

Overall, however, the public parts of the complaint don’t impress.

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Still Here …

Lynne Kiesling

Sorry for the radio silence; all of the things I’d like to write right now take more mental bandwidth than I can spare. I have literally been mentally composing a post on something for more than four months, but I haven’t had the mental space to think it through enough.

Time for the truthful reveal: I have a book contract with Routledge for a book on a conceptual framework for forward-looking regulatory institutions. The framework is a synthesis of neoclassical, Austrian, new institutional, and complex adaptive systems models, obviously applied to electric power and the challenges of technological change.

That’s what has been taking up the mental bandwidth for the past several months, and will continue to do so for the next several months. I’m not much prone to writer’s block, but I do find this kind of conceptual synthesis particularly challenging. It’s not a standard-issue economics type of creation, so my wrestling with the beast as it forms is mentally draining.

As the thoughts start to coalesce, I’ll probably preview them here, and ask for feedback, of course.

Thanks for your interest and your patience.