Western Energy Crisis of 2000-01

The US Western Energy Crisis of 2000-01, though long passed, has raised persisting questions about the relationship between spot and forward electric prices, which are clearly (but only partially) related. A Brattle expert provided expert testimony on this topic in several recurring federal regulatory proceedings concerning the economic damages caused by the Western markets energy crisis. As part of these analyses, Brattle compared the statistical relationship between spot and forward prices during typical markets to what occurred during the alleged market manipulations in Western markets. The analysis was part of the evidence used to obtain very large and favorable outcomes for damages to the California power procurers.