Clearing Price Auctions

NYISO markets use a uniform clearing price auction to provide a common price at each location for all buyers and sellers.

Clearing Price

This type of auction creates an incentive for producers to lower their costs and bid competitively. They also provide transparency to the marketplace, as all participants are aware of the value of energy.

The auction is conducted using sophisticated software that simultaneously determines how to serve the load utilizing generators with the combined lowest total production cost.

View Whitepaper - Uniform Clearing Price vs. Pay-As-Bid in Wholesale Electricty Markets »

Key Energy Terms

Clearing Price

The price set at the intersection of generation supply and consumer demand. Determines price paid by loads and received by suppliers. Provides an incentive for producers to lower costs and bid competitively.

Generator

A machine that produces electrical energy. Generators that connect to the grid in New York must be able to respond to signals from the NYISO and produce a minimum of one megawatt of electricity. Over 400 generators compete to provide energy and ancillary services through the NYISO markets.

Load

A term that refers to either a consumer of energy or the amount of energy consumed. It represents the demand for electricity.