 For these centralized electricity markets Okay, I'd said that there were that starting in the 1990s. There were two competing models for setting up electricity markets right one in California and one in these PJM states and so the What what California did was it tried most directly to replicate Financial exchange right like the New York stock exchange for buying and selling electricity And so it opened what was called the California power exchange, okay, and so California's biggest utilities right they all they all agreed to go along with this and they agreed to buy all of their power from the power exchange Okay, so how the power exchange worked was this First Individual generators decided whether or not they wanted to offer their supplies into the power exchange Okay, so this is called Decentralized unit commitment. Okay, so it was up to the generators whether or not they they wanted to make their Capacity available to the exchange Okay, the bids from the generators there there was there there was an overall cap So a maximum amount that the generators could bid But beyond that the generators could more or less do whatever they wanted right they could submit whatever type of supply offer they wanted to okay, and then just as generators had to submit supply offers the three utilities in The the the three large California utilities. They also had to submit demand bids okay, so The and so the idea was that you would have So many suppliers rushing into this market to serve so much electricity demand That This that there would be this sort of vigorous competition that that would ensue sort of like in an auction Okay, so how the the way that the power exchange market worked was every hour Suppliers would submit supply offers which Is the blue curve here okay, and The supply offer indicated how much generating capacity the supplier was willing to make Available to the power exchange at what price Okay, so when you put all of these together you got what we would call a supply curve or an offer curve And that's in the blue On the demand side The Utilities had to submit The amount of electricity that they were willing to buy from the exchange at some price And so that's the pink curve right over here And when these when these purchase offers were Aggregated together you got kind of a California system demand curve and where The supply and demand curve met Determined the price and quantity at which the electricity market would clear Okay, so In this example right and and this is this is a this is a picture from the late 1990s So in in this example the point where supply equals demand okay The market cleared for this particular hour at about 32,500 megawatts of Generation capacity would be utilized right to serve 32,500 megawatt hours of energy demand and the market clearing price would be $190 per megawatt hour okay, so this was repeated every single hour of every single day and In the event that there wasn't enough Electricity purchased in through the power exchange to serve all of California's electricity demand there was this there was sort of a there was a secondary or balancing market that would that would ultimately equate demand and supply Right on a short on a sub hourly basis So this was basically how the power exchange mark model worked, okay, and the the power exchange the California power exchange lasted for about two and a half years and after the California power crisis It's part of California sort of screeching halt to electricity deregulation. The power exchange was shut down okay, and the And partially because of California's sort of dismal failure The power exchange model has not really been replicated anywhere else except Alberta up in Canada where it's actually they actually have had a Power exchange type market for I think well over a decade right and see if they seem to like it But in California didn't work so well