informs abstract fwd shijie additional changes abstract power market developments us created several unique challenges energy industry economists discuss major factors underlying exceptionally high volatility electricity prices feel may reflect flaws power pools design incomplete transition fully deregulated markets generation transmission title fine vince shijie deng 10 01 2000 07 47 53 pm vkamins enron com cc subject informs abstract fwd forwarded message date sun 1 oct 2000 14 29 20 0400 edt shijie deng vkaminski aol com cc shijie deng subject informs abstract vince thanks abstract purpose conference program listing conference organizers need title abstract longer 50 words based abstract sent took liberty make title 50 word abstract attached please make changes feel necessary send back send organizers get confirmation best shijie title current challenges modeling power price volatility author dr vince kaminski head quantitative research enron capital trade resources abstract power market developments us created several unique challenges energy industry economists discuss major factors underlying exceptionally high volatility electricity prices feel may necessary price pay increased market efficiency expanded customer choice shi jie deng assistant professor school isye georgia institute technology office phone 404 894 6519 e mail deng isye gatech edu home page http www isye gatech edu deng sun 1 oct 2000 vkaminski aol com wrote shijie sending abstract informs presentation vince last three years characterized exceptionally high volatility power prices us markets market developments created number unique challenges energy industry economists one immediate question answer measure volatility energy prices although agree prices power markets characterized high variability traditional measures used financial economics annualized standard deviation log price returns may fit well electricity prices second challenge explain sources high price volatility answer question extent attributed problems addressed long run problems include flaws market design allow market participants abuse market power limited availability unequal access transmission temporary shortages generation capacity factors underlying high volatility electricity prices may permanent nature may necessary price pay increased market efficiency expanded customer choice