Dynamic Testing of Wholesale Power Market Designs:An Open-Source Agent-Based Framework

In April 2003 the U.S. Federal Energy Regulatory Commission proposed a complicated marketdesign – the Wholesale Power Market Platform (WPMP) – for common adoption byall U.S. wholesale power markets. Versions of the WPMP have been implemented in NewEngland, New York, the mid-Atlantic states, the Midwest, the Southwest, and California.Strong opposition to the WPMP persists among some industry stakeholders, however, duelargely to a perceived lack of adequate performance testing. This study reports on themodel development and open-source implementation (in Java) of a computational wholesalepower market organized in accordance with core WPMP features and operating over a realisticallyrendered transmission grid. The traders within this market model are strategicprofit-seeking agents whose learning behaviors are based on data from human-subject experiments.Our key experimental focus is the complex interplay among structural conditions,market protocols, and learning behaviors in relation to short-term and longer-term marketperformance. Findings for a dynamic 5-node transmission grid test case are presented forconcrete illustration.[...]