What JP Morgan did and what it says about US electric market design

I’m talking to Jim Bushnell, an Associate Professor at the University of California, Davis – who was in New Zealand in August as the S.T. Lee fellow at the New Zealand Institute for the Study of Competition and Regulation.

Before the Christmas break, Jim explained why the current cases of price manipulation in US power markets aren’t Enron all over again. It’s all about the complex market design in the US, which internalises a plethora of externalities - and what happens when traders play there. This week he reflects on where the story may end.

In August, Bushnell gave a lecture in Wellington asking If Electricity Liberalisation is So Great, why does everybody hate it?