Subject Index

Citation

Kleit, A.N. (2018), "Subject Index", Modern Energy Market Manipulation, Emerald Publishing Limited, Leeds, pp. 219-225. https://doi.org/10.1108/978-1-78743-385-420181015

Publisher

:

Emerald Publishing Limited

Copyright © 2019 Emerald Publishing Limited

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INDEX

Note: Page numbers followed by “n” with numbers indicate footnotes.

Administrative agency, process at

, 48–49

Administrative Law Judge (ALJ)

, 48, 125, 142, 158

Affirmative defense

, 146

Agriculture Department

, 34

Alternative hypothesis

, 131, 163

Amaranth

, 124, 125

battle of economists

, 129

case (2007)

, 119, 125–127

Commission Decision

, 134–135

hedge fund

, 124

important of economists

, 129–130

lies, damn lies, and econometrics

, 130–132

Quinn and Fischel for defense

, 132–134

scienter

, 128–129

searching for manipulation

, 137–138

settlements and jurisdiction

, 135–137

side excursion on put options

, 127–128

staff’s case and Hunter’s rebuttals

, 125

theories of manipulation

, 123

trading

, 134

American Electric Power Service Corporation

, 89n4

Amicus curae

, 37

Ancillary market strategy

, 91–93

Ancillary markets

, 78–79

Anti-Manipulation Rule

, 170

Appeals Court

, 32, 34, 37, 38, 40, 49

Arbitrage

, 13–15, 93, 145–146

strategy

, 110, 117

Arbitrageurs

, 8

Artificial price

, 10, 44, 54, 57–58, 105, 110–113

Avista

, 48, 57, 65

trades on underlying during market close

, 55

trading strategy

, 56–57

Balanced schedules

, 94, 100

Balancing authority

, 69

Bankruptcy

, 5

Barclays

, 158, 212

Dean Hubbard’s statement

, 171–174

defense

, 165–167

district court’s decision on discovery

, 174–176

exchange between barclays and staff

, 165–169

FERC’s penalty order

, 169–171

process

, 158–159

show cause order

, 159–165

Baseline consumption

, 188

“Bid–ask spread”

, 9

“Black box” approach

, 150, 166

Black Oak decision

, 198

BP America

, 141

arbitrage and early trading

, 145–146

“framing the open” theory

, 143–145

manipulation and theory of firm

, 150–152

other issues

, 153

parties and proceedings

, 141–143

scienter

, 147–150

trading strategies

, 146–147

Bre-X Minerals Limited Canadian company

, 10

Bre-X stock rose

, 10

British Columbia Hydro

, 89

“Bury the corpse” effect

, 19, 35, 107

California energy crisis

, 67, 68

California Independent System Operator (CAISO)

, 69, 81

computing system

, 108

day-ahead ancillary market

, 92

market

, 110

system

, 83, 85

California’s electricity markets

, (see also Electricity markets), 81

ancillary market strategy

, 91–93

congestion-related strategies

, 89–91

electricity restructuring

, 81–87

energy procurement in day-ahead markets

, 95

ENRON

, 87–89

gaming

, 100–101

price arbitrage strategies

, 97–100

real-time prices

, 93–97

California–Oregon border (COB)

, 48

Call options

, 51, 52

Capacity markets

, 98n12

Cargill v. Harden (1971)

, 38–40

Cascade effect

, 26, 27, 53, 59, 60, 127, 147

Cash settled option contracts

, 51

Cash-settled index

, 7, 23

Cheap talk

, 47, 64

Chicago Mercantile Exchange

, 2

Chicago rye markets

, 32, 33

Chicago wheat market

, 24

Commodity Exchange Authority (CEA)

, 31

Commodity exchanges

, 22, 42, 59, 69

Commodity Futures Trading Commission (CFTC)

, 11, 31, 42, 44, 47, 134, 137

artificial price

, 57–58

misconstruing Cargill

, 63–64

misconstruing Henner

, 61–63

path to manipulation finding

, 57–64

Commodity market

, 1

actions as farmer

, 4

buying from exchange

, 5–6

challenges for commodity trader

, 7–9

challenges for exchange

, 6–7

hypothetical trading book for corn

, 9

selling to

, 1–4

trading

, 211

Commodity trader, challenges for

, 7–9

Competitive Energy Solutions (CES)

, 182

Congestion Revenue Rights (CRRs)

, 106

Congestion-related strategies

, 89

Death Star and Cut Schedules

, 90–91

load shifting

, 89–90

Congressional staffers

, 50

Constrained equilibrium

, 75

Convertible bonds

, 124

Corn contracts

, 12

“Corners”

, 11

Crop insurance

, 2n1

Cut Schedules

, 90–91

“Data snooping”

, 132

Daubert v. Merrell Dow Pharmaceuticals, Inc.,

, 153

Day-Ahead Load Response Program (DALRP)

, 179–180, 185–187

rules

, 187–189

Day-ahead markets

, 75–77

DC Energy v. H. Q. Energy Services

, 114

De novo review

, 197–198

De novo trial

, 158, 175

Death Star

, 90–91

Deception

, 100

Degenerate pricing

, 110–113

Delivery/settlement period

, 27–28

Demand

, 72–75

reduction

, 181

Demand response

, 186

policy ISO-NE policy

, 179–181

“Dependent” variable

, 130

Deutsche Bank

, 105, 118, 206

arguments

, 107–108

“degenerate pricing” and “artificial” prices

, 110–113

legal standards

, 113

motivation

, 108–109

original intent rule

, 116–117

other issues

, 113

per se illegality

, 115–116

proceedings and FERC Staff’s arguments

, 106–107

prosecution’s case

, 105

reason for lose money

, 109–110

settlement with FERC

, 120

stand-alone profitability

, 113–114

subsequent FERC cases

, 117–118

US enforcement agencies

, 118–119

DiPlacido

, 47, 166, 212

CFTC’s path to manipulation finding

, 57–64

contending theories

, 50–57

parties and charges

, 48

process at administrative agency

, 48–49

weaknesses of procedure

, 49–50

Dreyfuss Show Cause Order and Consent

, 117

“Dummy” variables

, 130n12

Early trading

, 145–146

ECONLIT search engine

, 144

Econometrics

, 130–132

Economic theories of manipulation

, 17

early works

, 17–19

Pirrong creating field

, 19–25

works by Ledgerwood and coauthors

, 25–28

Efficient Markets Hypothesis

, 28, 161

eggs

, 34

Electricity

demand

, 68–69

price

, 185

Electricity markets

, 67, 211

ancillary markets

, 78–79

day-ahead and real-time markets

, 75–77

FTRs

, 77–78

required price for offering into reserve market

, 79

restructured

, 68–70

three-node model

, 70–75

Electricity Reliability Council of Texas (ERCOT)

, 68

Electricity restructuring in California

, 68, 81

monthly wholesale electricity prices during crisis

, 84

price caps and finger pointing

, 83–87

supply curves

, 86

“End game” of manipulation

, 21

Energy Information Administration

, 186

Energy Policy Act (2005)

, 134

ENRON

, 81, 87, 195

in California Crisis

, 88–89

strategy

, 99

ENRON Energy Services (EES)

, 99

Etracom

, 118

Ex ante profitability

, 113–114, 117

Ex post enforcement

, 203

Ex post profitability

, 113–114, 117

Exchange(s)

, 23

buying from

, 5–6

commodity

, 22, 42, 59, 69

fungible

, 3

rules

, 62

Exxon stock

, 19

Farming

, 1–2

“Fat Boy” strategy

, 99–100

Federal court system

, 213

Federal Energy Regulatory Commission (FERC)

, 49, 68, 81, 96, 105, 123, 125, 137, 141, 144, 151, 157, 179,

FERC v. Electric Power Supply Association

, 181

FERC v. Silkman

, 182, 191

penalty order

, 169–171

staff

, 105, 159

Federal Power Act (FPA)

, 170, 183, 202

Federal Reserve Board

, 42

Federal Trade Commission (FTC)

, 49

Financial economics

, 28

Financial index market

, 159

Financial market manipulation

, 15

Financial risk

, 106

Financial Transmission Rights (FTRs)

, 77–78, 89, 105

Finger pointing

, 83–87

Firm compliance

, 152

Firms

, 110

First law of nature

, 33

Forney Perpetual Loop

, 90

“Framing the open” theory

, 143–145

Fraud

, 116

Freeport-McMoran Corporation

, 10

Gaming

, 89, 91, 100–101

rule

, 212

General Foods v. Brannan (1948)

, 32–34

“Get Shorty” ENRON

, 91–93

Grain Futures Act (1922)

, 31

Great Western v. Brannan (1953)

, 34–36

H. W. Miller and Company v. Benson (1958)

, 36

“Harming well-functioning market”

, 107

Hedge fund

, 124

Hedgers

, 8, 17, 18

Hedging

, 51–53

financial risk method

, 105

theory

, 56

Home-run strategy

, 206

Houston Ship Channel (HSC)

, 142

Hunt Brothers’ silver market episode

, 32, 40–45

Hunter v. FERC

, 136, 711 F. 3rd 155

Hurricane Katrina

, 124

Hydroelectric facilities

, 67

Independent System Operators (ISOs)

, 69

Independent variables

, 130

Index manipulation

, 158

Index period

, 158

Indicator variable

, 145

Individual trader, incentive of

, 151–152

Indonesian government

, 10

Informed party

, 17, 18

Instant message (IM)

, 126

Intermediate Microeconomics

, 150

“Invisible hand” (Smith)

, 68

ISO-New England (ISO-NE)

, 179

policy

, 179–181

Jurisdiction

, 135–137

Kaminski’s analysis

, 131–132

Kirchhoff’s law

, 67, 72

Kyle model

, 17

Laundering

, 93

“Law and economics” paradigm

, 35n3

LEXIS search terms

, 59

“Light” index

, (see NP off-peak)

Limit orders

, 26

Liquidity

, 8

Load serving entities (LSEs)

, 76

Load shifting

, 89–90, 105

London Metal Exchange (LME)

, 23

Long manipulations

, 22, 24

Loopholes

, 201–203, 207

Manipulation

, 1, 9, 39, 47, 105, 150–152

analysis

, 199–200

CFTC

, 11

commodity market

, 1–9

Ledgerwood and Kleit definitions

, 12

losing money

, 10

market

, 12

speculation, arbitrage, and market power

, 13–15

strategy

, 23

theory

, 53–54

wash trading

, 12, 13

Manipulator

, 11, 21, 24

Marginal costs (MCs)

, 72

Marginal Loss Surplus Allocation (MLSA)

, 197

Market

bid

, 9

design function

, 100

impact

, 14n10

maker

, 8

manipulation

, 12

monitors

, 70

participants

, 14, 23

power

, 9, 13–15

power manipulations

, 15

wholesale price

, 179

Market monitoring and information protocols (MMIP)

, 96

Merit order

, 77

Midwest Independent System Operator (MISO)

, 69

Minorco v. Hunt

, 14

Misconstruing Cargill

, 63–64

Misconstruing Henner

, 61–63

MLSA revenues

, 198–199

“Money for nothing” scheme

, 91

Monopsony behavior

, 94

Motives for violating bidders

, 59–60

My Cousin Vinny (movie)

, 153n14

Natural gas

, 145

“Neo-classical” theory of the firm

, 150

New Orleans contracts

, 36

New York Cotton Exchange

, 37

New York Mercantile Exchange contracts (NYMEX contracts)

, 48, 57

Nodes

, 71

“Nontransitory” market power

, 15

Null hypothesis

, 131

Ohms

, 71

Options

, 51–53

Original intent rule

, 116–117

“Out of merit” (OOM)

, 85

Overgeneration

, 99–100

Palo Verde (PV)

, 48, 55, 65, 91, 158

electricity

, 11

Payment system

, 196

Per se illegality

, 115–116

Per se rule

, 61

Peruvian government

, 43

Phantom congestion

, 108

PJM

, 195, 201–203, 205

Plaintiff

, 135

“Polar Vortex”

, 204

Post hoc rationalization

, 206

Power flow

, 73

Power supply

, 68

Powhatan

, 195

participants and proceedings

, 197–198

Powhatan’s response

, 200–206

show cause order

, 198–200

staff’s rebuttal and commission’s initial decision

, 206–208

transmission losses

, 195–197

Powhatan’s trades

, 203–204

Preliminary econometric model

, 166

Price arbitrage strategies

, 97

Overgeneration and “Fat Boy” strategy

, 99–100

“Ricochet”

, 97–99

Price caps

, 83–87

Price effect manipulation

, 43

Price impact

, 14n10

“Price Rebound” theory

, 132

Price slippage

, 14n10

Protective call

, 51

Protective put

, 53

Punishment and theory of firm

, 150–151

Put option

, 52

Quantity risk

, 2n1

Rate of return regulation

, 68

Real-time markets

, 75–77

Real-time prices

, 93–97

“Real-time” markets

, 76

Regional transmission operator (RTO)

, 67–70, 106, 181, 195

“Regulation” markets

, 79

Regulatory capture

, 42

Reserve markets

, 78, 91

Reserve payments

, 78

Resistance

, 70–72

Restructured electricity markets

, 68

rate of return regulation

, 68

restructured states

, 69

RTOs

, 68–70

RTOs in North America

, 70

Revenue equation

, 20

“Ricochet”

, 97

economic analysis

, 98

strategy

, 97

“Risk neutral”

, 21

Rumford and Silkman defense

, 185

DALRP

, 185–187

rules of DALRP

, 187–189

scienter

, 189–190

Rumford Paper

, 182

Rumford Show Cause Order

, 184

Scienter

, 35, 116, 128–129, 135, 147–150, 161–164, 189–190, 200

Secretary of Agriculture

, 32

Self-preservation

, 33

Self-regulating organization

, 205

Settlements

, 135–137

Short manipulation

, 24

Show cause order

, 117, 144n7, 157, 159, 182–185, 198

damages amount

, 164–165

manipulation analysis

, 199–200

scienter

, 161–164, 200

underlying case

, 159–161

UTC trading driven by MLSA revenues

, 198–199

Solar power

, 76

Southwest Power Pool (SPP)

, 69

Speculation

, 13–15

Speculators

, 8, 14, 17

Squeezes

, 11

Standard deviation

, 172

State Department of Water and Resources

, 83

State-mandated price

, 82

Statistical inference

, 130–131

Statistical significance

, 131

Stepwise regression

, 132

Sullivan & Long v. Scattered

, 108

Supply

, 72–75

curves in California

, 86, 87

power

, 68

Supplying reserve power

, 78

Surrebuttal analysis

, 133

“t-statistic”

, 131

Target

, 26

Theory of the firm

, 150

firm compliance

, 152

incentive of individual trader

, 151–152

punishment and

, 150–151

Three-node model

, 67, 70, 71

constrained equilibrium

, 75

flow across three transmission lines

, 74

power flow

, 73

resistance

, 70–72

supply and demand

, 72–75

Town eggs

, 34

Traders

, 151

Trading

, 22

book

, 8

strategies

, 146–147

Trading Places (Classic 1983 movie)

, 6n5

Transmission

lines

, 71

losses

, 195–197

Treasury bonds

, 19

Trigger

, 25–26

U.S. v. Addyston Pipe

, 116

Underscheduling Load

, 96

Uneconomic trading

, 10, 26, 27, 48

“Unintentional” squeeze

, 35

University of Utah

, 58

“Up-To-Congestion” contracts (UTC)

, 198

trading driven by MLSA revenues

, 198–199

US enforcement agencies

, 118–119

Violating bids

, 57, 58

CFTC

, 61

DiPlacido’s defense

, 60

motives for violating bidders

, 59–60

Violating offers

, 58, 59

Volkart Brothers (1962)

, 36

Wash trading

, 12, 13

Well-functioning market

, 195, 205–206

Western State Power Pool (WSPP)

, 92

Widget

, 150

Wind power

, 76