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The Power Grid Is Just Another Casino for Energy Traders

Nov. 5, 2021, 9:00 AM

One morning in January, Andrew Kittell climbed into his gray Toyota pickup and drove to the top of the San Diego-Coronado Bay Bridge. He parked in the service lane and got out, leaving his driver’s license in the car. He walked toward the railing.

Kittell was a trader in the market for financial transmission rights, also known as congestion contracts. These are essentially bets that at specific places and times, demand for electricity will rise enough to create bottlenecks, or congestion, on the power grid, causing prices to jump. The tools of this trade are weather forecasts and demand curves ...