The Impact of FERC Orders on the Value of Bidders in PJM

A study of the responses of share prices of major bidders in the PJM auctions from the mid-1990s through 2006 finds statistically significant effects for some FERC decisions for a portfolio of bidders. In contrast to publicly stated policy objectives, the analysis shows that some FERC decisions significantly raised market expectations regarding the future profitability of bidders.