Impact mitigation for emergency events: Their effects on day-ahead and real-time market locational based marginal pricing at the New York iso

The New York based electricity wholesale market (the New York Independent System Operator; NYISO), recently introduced a couple of measures that have the potential to mitigate the price impacts from a sudden and unforeseen event in a deregulated electricity market: the Price Response Load (PRL) programs. This paper tests whether the PRL programs reduced the risk premium in the electricity prices by searching for structural breaks in the difference between the forward and expected spot prices. We find that the risk premium significantly decreased with the commencement of these programs, which provides additional evidence for structural breaks in the mean of the forward discount.