President of Charles River Associates, Boston. His 33 years of consulting have featured electric power problems, power market analyses, mergers, antitrust issues, power procurement, demand analysis, and rate design. He served with the Federal Power Commission and taught at Boston College, Wesleyan University, and Harvard University before joining CRA. He received his Ph.D. in Economics from Harvard. Andrew Parece is a Vice President at Charles River Associates. He has more than 15 years of experience consulting to clients in the energy industry, covering a wide range of issues including pricing, forecasting, long-range planning, demand-side management, electricity deregulation and restructuring policy, and auctions of generation assets and standard offer service. He received a B.A. in Economics and Computer Science, and an M.B.A. from Cornell University. This article is part of a longer analysis of price-spike economics that includes hypothetical scenarios illustrating how major price-spike episodes arise and an analysis of economic effects of capacity requirements as a price spike prevention tool. The longer analysis is accessible at http://www.crai.com.