A Way to Reorganize Organized Markets

Although there has been widespread criticism of the standard market design, no satisfactory alternative has yet been proposed that will satisfy the consumers, the generators, and regulators. This article proposes a structured capacity market that entails a cost-based call on energy. The article demonstrates that this alternative market structure would not only facilitate new generation and encourage bilateral contracts, but would bring the all-in market price down compared to the Poolco model.