This was a pretty interesting read and displays a level of sophistication I honestly didn’t expect (at least they know they are getting participants to sell a call option and therefore should expect bids at the extrinsic value of that option). I would be really interested on the history of how they decided to go down the peg price route vs just copying CAISO (or other non peg price model, caiso just seems easy because they still have some
https://www.iso-ne.com/static-assets/documents/2023/06/a03a_mc_2023_06_06__dasi_competitive_offer_formulations_memo.pdf
This was a pretty interesting read and displays a level of sophistication I honestly didn’t expect (at least they know they are getting participants to sell a call option and therefore should expect bids at the extrinsic value of that option). I would be really interested on the history of how they decided to go down the peg price route vs just copying CAISO (or other non peg price model, caiso just seems easy because they still have some
scarcity pricing mechanism)
I’m not familiar with the CAISO model—I’ll give the linked memo a read at some point.