Understanding the Markets
Markets are the key to providing open access to the grid. Through the markets, participants specify the value they place on grid access by bidding to buy or sell electricity and related services. The NYISO markets, in turn, make the most economic assignment of these scarce resources. Open access to the power system requires competition in the energy, ancillary services, capacity, and financial hedging markets. The NYISO’s market-based system is designed to provide the most efficient procurement of each of these components.
The following sections review the distinction between wholesale and retail electricity, the components of wholesale electricity costs, clearing price auctions, the array of electricity markets administered by the NYISO, and the benefits of competitive wholesale electricity markets.