The post-mortems on last summer's price spikes in the Midwest are in. At least three studies of the event diverge in their conclusions:
First, on Sept. 24 of last year, the staff of the Federal Energy Regulatory Commission found the root cause of the spikes in extreme weather and unexpected outages. It observed no direct evidence of market manipulation and concluded that the events were unlikely to recur.
Reacting to those findings, Judah Rose of ICF Kaiser International saw deficiencies in the FERC report and predicted more spikes as a shortage of generating capacity worsens in the near future. (See "Missed Opportunity: What's Right and Wrong in the FERC Staff Report on the Midwest Price Spikes," Public Utilities Fortnightly, Nov. 15, 1998, p. 46.) To cope with it, he recommends operational changes and quick deregulation, the latter to end uncertainty that discourages new investments.
Four days later, on November 19, the Public Utilities Commission of Ohio reported to the legislature that last summer's weather and outages might well recur. Policy interventions to improve market coordination were needed, said the PUC, since today's "immature" market could "evolve rapidly only under optimal conditions."
Today, several months later, is there anything left to say?