Methods for market analysis, risk management and finance in the deregulated power industry

The dissertation presents novel studies from three aspects of electricity restructuring. First, an empirical economic method is developed to distinguish market design flaws from market participants' misconducts with a proposed correlation matrix structure. Secondly, an extension of modern optimal portfolio selection method is presented for valuation of insurance on generation outage risks. A Least-Squared-Errors based decomposition method is also proposed to decompose the asymmetric payoff/receipt distribution into two composite normal distributions. Thirdly, the concept of applying asset securitization, a newly developed finance tool in the capital market, is introduced to lower funding costs for the power industry. Benefits of securitization to both the power industry and the nation's capital markets are discussed.