Antimonopoly regulation method based on perfect price discrimination

Vadim Borokhov

Published 2015-07-16Version 1

We propose a method of antimonopoly regulation in a day-ahead power market with locational marginal pricing which forms economic incentives for a producer, operating a portfolio of generating units, to submit an offer indicating its true cost and faithful values of technical parameters, entering generating units constraints. The uncertainty faced by regulator when applying the method affects neither nodal output/consumption volumes nor locational marginal prices but manifests itself in overall uplift or downlift for the market, which may be allocated among the other market players in a way preserving the price signals produced by the market.