How to Make Informed Decisions in Regulated Power Markets

administered by an Independent System Operator, or ISO, examples include PJM in the Mid-Atlantic and California ISO in the West (see image). These markets are designed to be competitive, and thus ISOs give access to large amounts of information to enable transparency and promote competition among market participants. This information includes granular pricing data, information about system outages and constraints, ISO published forecasts, and data about the generating stack. A common challenge is not only collecting and organizing this data but also having the insights and clarity to leverage it to make informed decisions in these markets.

Regulated markets are very different. In these markets, which are primarily located in the Southeast and West, utilities tend to be natural monopolies that own both the generation as well as the transmission and distribution infrastructure needed to deliver power to end-users. Typically just one company operates in a particular service territory, and there is no competition, thus these companies’ profits are regulated by the government, giving them the “regulated” distinction. Because there is no mandate for competition in these areas, comparatively, they have much less data than deregulated regions. There is very little information about what a fair market price is, what load is, or how much power is being generated.

So what happens when you need, say, market prices for a regulated area of the country? The one source for this data is the FERC Electric Quarterly Reports (EQR) dataset. FERC requires all entities selling or buying products on wholesale electricity markets to file all of their transactions with them, and then they publish this data into EQR. This large dataset is the only place you can get market pricing for regulated regions of the United States. Not only is it a great source for understanding pricing trends in regulated areas, but it's a great source for understanding who is buying and selling power to whom, and at what prices for both regulated and deregulated areas. Power Marketers, Originators, and Power Traders find this information extremely useful when trying to uncover counterparties and structure deals for long or short-term power sales.

Both market transparency and competitive intelligence can provide insight to companies looking to make the best decisions for their business. If your organization had more competitive insights, how would your strategy and activity be impacted? How could you organize and act on this data with accuracy, and without breaking the bank and hiring new staff?