Wholesale Power Markets | FTI Consulting
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Wholesale Markets

About two-thirds of the U.S. electric system is served by competitive wholesale power markets. Market participants bid their power into the market coordinated by an independent market operator at a preferred cost and time frame. FTI Consulting experts developed the Locational Marginal Pricing system and associated financial transmission rights used in all organized power markets in the United States — New England, New York, the Mid-Atlantic (PJM), the Midwest (Midwest Independent System Operator), Southwest (Southwest Power Pool), Texas (Electric Reliability Council of Texas) and California — and globally: the Canadian provinces of Ontario and Alberta; New Zealand; Australia; Chile; Argentina; and the European Union (“EU”). We are well-versed in the reforms to wholesale markets across many EU member states, providing the economic, regulatory and sector expertise to help design and deliver new market frameworks.

Our Service Offerings

Disputes

FTI Consulting professionals have been involved in debates surrounding changes in U.S. power capacity market rules and their impact on supplier behavior and the cost of power. We have analyzed the market structures extensively and the implications of the rules on market-bidding behavior. The capacity markets have prompted numerous regulatory proceedings regarding the efficiency of the market designs and their susceptibility to potential exercise of both buyer and seller market power. Continued debate regarding the appropriate mitigation rules for buyer and seller market power is ongoing and has resulted in several rounds of revisions to market rules and litigation. FTI Consulting has provided analysis, testimony and litigation support to market participants in association with all the features of these markets.

Investigations

FTI Consulting has worked on many Federal Energy Regulatory Commission (“FERC”) enforcement cases, as the FERC has undertaken a more aggressive approach toward policing wholesale market supplier behavior. Through an intimate knowledge of the power, gas and oil markets, our professionals are able to analyze market buyer and seller interactions and to test theories of market manipulation or abuse suggested by regulators. We have assisted many clients with these often time-consuming and uncertain investigations.

Policy

Utilities are continuously reviewing how the wholesale market policies and rules impact them and their ratepayers, whether these policies and rules are working as intended, and whether reforms are necessary. The strategy and regulatory specialists and economists at FTI Consulting help a utility analyze the impact of market and regulatory policies and then work with the client and regulators to craft policies that deliver the intended benefits. Our experts look at the costs and benefits to governments, utilities, power consumers and other market participants and evaluate changes in the market framework and other public policies.

Strategic Communications

FTI Consulting Strategic Communications specialists, working with a firm’s utility experts, provide public education program support for utilities and utility trade organizations such as the Edison Electric Institute. These communications programs inform consumers about how smart grids provide the ability to see in real time what the price of electricity is and to moderate energy consumption during low-cost, low-demand periods of the day to save money. Such education programs usually include multimedia tactics — inserts included in electricity bills, advertising, messaging via social media and web videos. The goal is to raise awareness about what a smart grid is, what it can do for consumers and how much money they ultimately can save.

Strategic & Business Consulting

Many of the principles that govern how wholesale markets work are driven by economics. Because FTI Consulting has a deep capability in economics and an in-depth understanding of the dynamics of the wholesale markets, our Energy specialists are well-equipped to work with clients — utilities and even countries — to handle all the economic modeling necessary to create a wholesale market; to write and rewrite market rules in many jurisdictions; and to restructure the energy industry for a community, for a state, for an entire country.

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