Empirical test of models of unilateral and collusive market power in California's electricity market in 2000. The data from California energy crisis of 2000 suggests that the largest departures of observed electricity prices from the estimates of the competitive price occur when demand approaches market capacity. This paper studies models of unilateral and collusive market power applicable to electricity markets. Both suggest a unique mechanism explaining the increase of the price-cost margin with demand. The empirical test of these models provides more evidence for unilateral market power than for behavior suggesting tacit collusion.; Economics of hydro generating plants operating in markets for energy and ancillary services. In order to preserve the stability of electricity supply, electric generators have to provide ancillary services in addition to energy production. Hydro generators are believed to be the most efficient source of ancillary services because of their good dynamic flexibility. This paper studies optimal operation decisions for river dams and pumped storage facilities operating in markets for energy and ancillary services as well as the change in the water shadow price in presence of ancillary services markets. The analysis is applied to valuation of the ancillary services provided by hydro resources in the Tennessee Valley Authority. A simulation of ancillary services markets shows that TVA's hydro resources providing ancillary services can allow for substantial savings in total costs of energy provision. Optimal hydro scheduling in markets for energy and ancillary services increases the value of TVA's hydro resources by 9% on average and up to 26% for particular units. As a result of hydro participation in ancillary services markets water shadow prices of river dams drop significantly allowing for tightening hydro constraints in favor of other water uses.
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