Effect of market structure and design on grid reliability

This paper argues that the Independent System Operator (ISO) should play a major role in designing a viable electricity market. It cites the case of the California energy crisis, where CAISO was marginalized and was not provided with the necessary tools to effectively manage the imbalance requirements as well as simultaneously manage congestion. It also suggests that modeling the physical aspect of the grid as the foundation to an electric market is the right way to operate an efficient and reliable ISO.