Bruce Layman Seminar Event

Bruce Layman, Chief Economist, WA Economic Regulation Authority, will present a seminar provisionally titled "Market Power Mitigation in the Wholesale Electricity Market", at the University Club, from 6pm on Wednesday 5 October at the University Club, UWA. The presentation will be followed by drinks and Canapes. This event is free for members and partners and $33 for non-members.

Speaker Biography

Bruce Layman is the Chief Economist at the Economic Regulation Authority of Western Australia (ERA), a role he has held for five years.  He works across a wide range of the ERA’s functions, including the ERA’s Wholesale Electricity Market monitoring activities.  This includes shaping the ERA’s thinking on how to monitor and investigate price offers by market participants, and carrying out these functions in practice.   Prior to working at the ERA, Bruce worked at Western Australian Treasury where he held various roles including positions responsible for economic forecasting, economic research, calculation of Western Australian economic statistics and estimating the costs and benefits of policy and industry assistance proposals.  Bruce has a Bachelor of Economics with Honours and a Masters of Economics from the University of Western Australia.  He has almost 25 years’ practical experience as an economist, although he notes that his current role is the first in which ‘economist’ actually appears in his job title. 

Presentation Abstract

 It is generally accepted that electricity markets are very prone to abuse of market power and that the cost of this potential abuse can be very high.  Consequently, many electricity markets, including the Western Australia’s Wholesale Electricity Market (WEM), have separate capacity and energy markets,where suppliers receive one payment to provide capacity and another payment for any energy produced.  This market structure explicitly aims to reduce price volatility and exploitation of market power.  The Economic Regulation Authority (ERA) is responsible for market power mitigation and monitoring in the WEM, a key function of which is to enforce a market rule forbidding generators from offering prices above their short-run marginal cost, where such behaviour relates to market power.  This presentation covers market power monitoring and mitigation in the WEM, including: a brief summary of Australian competition law concepts; why electricity markets tend to have market power mitigation measures over and above general competition law; a very brief summary of United States (US) electricity markets; and how the ERA views the short-run marginal cost rule in the WEM.