Auction market implementation of ancillary services

The power industry in the United States is presently an evolving changing business environment. While planning to meet future peak demand is still a concern, the efficient utilization of existing generation and transmission resources is fast becoming a primary interest. This interest suggests to move from cost-based market operations to price based market operations. Auction market structure is one of the various ways to perform price based operation. Such a market place would be very new and challenging to all players of electric power industry. This paper describes an overview of the new business environmen. The application of auction markets to the electric power industry will require more automation than any other market. The implementation will require a computer bid management system to evaluate the bids as they are matched. Additionally, the matching of bids may require additional services than are already committed. This paper outlines the questions to be addressed ifa succesful market implementation is to be achieved within the United States. These questions deal primarily with the requirements of ancillary services.