A bid solicitation and selection method for developing a competitive spot priced electric market

The electric utility industry is in the beginning throes of a transformation from a cost-based regulated structure to a more market-based less regulated system. Traditional unit commitment and economic dispatch methodologies can continue to provide reliable least-cost solutions, providing they are modified to accommodate a larger sphere of market participants. This paper offers a method for an entity such as an independent system operator (ISO) to solicit and evaluate bids for developing a spot priced electric market by replicating existing utility practices that are effective and efficient, while creating an open and equitable competitive marketplace for electricity.