Testing the Effects of Price Responsive Demand on Uniform Price and Soft-Cap Electricity Auctions

Chapman, Duane | Mount, Timothy | Schuler, Richard | Schulze, William | Thomas, Robert J. | Two-sided Markets for Energy | Zimmerman, Ray D.
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R. Thomas, T. Mount, R. Zimmerman, W. Schulze, R. Schuler, D. Chapman
Proceedings of the 35th Hawaii International Conference on System Sciences, pp. 688-696, Jan 7-10, 2002, Waikoloa, Hawaii.

Testing auction mechanisms experimentally in a controlled environment provides an inexpensive means for evaluating their relative merits. This paper describes a framework for testing the efficacy of a price-responsive load on a uniform price last accepted offer and a soft-cap market. Experimental evidence to date based on uniform price market testing has shown an ability of price responsive load to mitigate high volatility and average price. The paper addresses a process to validate these results as well as our hypothesis that price responsive load will mitigate high soft cap market price behavior such as that observed in California.