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2018-03-28 15:30:00 2018-03-28 16:30:00 America/New_York Research Seminar Series - Chiara Lo Prete Assistant Professor of Energy Economics, John & Willie Leone Family Department of Energy and Mineral Engineering, Penn State University - College of Earth and Mineral Sciences WALC B074

March 28, 2018

Research Seminar Series - Chiara Lo Prete

Event Date: March 28, 2018
Hosted By: Andrew Liu
Time: 2:30 - 3:30 PM
Location: WALC B074
Contact Name: Erin Gough
Contact Phone: 765-496-0606
Contact Email: egough@purdue.edu
Open To: all
Priority: No
School or Program: Industrial Engineering
College Calendar: Show
Assistant Professor of Energy Economics, John & Willie Leone Family Department of Energy and Mineral Engineering, Penn State University - College of Earth and Mineral Sciences

"Lose to profit? Equilibrium models of cross-product manipulation in electricity markets"

 

ABSTRACT

The existence of complex interactions between elements of electricity market design creates opportunities for price manipulation strategies that differ from the traditional exercise of supplier market power. This has emerged as a central policy concern of the Federal Energy Regulatory Commission in recent years. Since 2007, FERC has settled eighteen investigations related to electricity market manipulation, allowing for the recovery of about $600 million in civil penalties and $350 million in disgorgement of unjust profits to be allocated back to the consumers. One of the strategies discussed in FERC’s settlements is cross-product manipulation, which consists in using unprofitable financial positions for the purchase or sale of energy in the day-ahead market to move prices in a direction that benefits congestion-related financial positions. Dr. Lo Prete will present ongoing work on two- and three-stage equilibrium models of cross-product manipulation using virtual transactions. The models account for demand uncertainty, the likelihood of transmission congestion in both day-ahead and real-time markets, and intertemporal constraints that limit a unit’s ability to produce electricity. Equilibrium models help identify market conditions under which cross-market manipulation is sustained over time, and quantify its impact on electricity prices and other market outcomes. 

Photo of Chiara Lo PreteBIO

Chiara Lo Prete joined Penn State's John and Willie Leone Family Department of Energy and Mineral Engineering as an Assistant Professor of Energy Economics in July 2014. Dr. Lo Prete studies the design and operations of electricity markets using quantitative methods at the intersection of economics, operations research and statistics. Her research focuses on strategic behavior and price formation in wholesale electricity markets, impacts of environmental policies on electricity markets, and market mechanisms to accommodate renewable penetration. Before joining Penn State, Dr. Lo Prete was a Ziff Environmental Fellow at the Harvard University Center for the Environment. She earned a BA in Economics from LUISS University, a MA in Energy Economics from the Scuola Mattei, and a MS and PhD in Geography and Environmental Engineering from The Johns Hopkins University.