CONCLUSION: THE DOTS KEEP CONNECTING

Current US RTO/ISO‐managed wholesale power markets maintain a conceptually problematic distinction between “reserve” and “energy” as transacted products. Spot‐market prices, supplemented by out‐of‐market make‐whole payments, are used to determine product settlements for forward‐market operations. These design features result in system operations and settlement processes that are complicated and confusing for market participants. In contrast, the Linked Swing‐Contract Market Design proposed is conceptually coherent. The design envisions a centrally managed wholesale power market as a linked collection of ISO‐managed forward reserve markets. Reserve bids submitted into a swing‐contract market are price‐sensitive and/or fixed demands for power‐path deliveries. The ISO allocates net reserve procurement costs and transmission service costs across market participants on the basis of their contributions to these costs.