Electricity markets employ open access and non-discrimination to foster competition, market entry, and innovation. The physical characteristics of the electricity system require explicit consideration of key elements in electricity market design. Pricing and settlement rules for the real-time market must provide efficient incentives, both for short-term operations and long-run investment. The ERCOT energy-only market design emphasizes the need to get the real-time prices right. The recent innovation of the ERCOT Operating Reserve Demand Curve (ORDC) addressed the fundamental problem of inadequate region-wide scarcity pricing that has plagued other organized markets, which have exhibited inadequate incentives both for reliable operations and efficient investment.
Hogan, William W. and Susan Pope. "Priorities for the Evolution of an Energy-Only Electricity Market Design in ERCOT." Harvard Electricity Policy Group. May 9, 2017.