  The Regional Transmission Operators each have unique methods to procure
frequency regulation reserves used to track real power fluctuations on the
grid. Some market clearing practices result in high regulation prices with
large spread compared to other markets. We present the frequency regulation
market clearing formulations--as derived from operator tariffs--of the ISO New
England, PJM Interconnection, and Midcontinent ISO. We offer test case examples
to explain the historic market pricing behavior seen within each system
operator and conclude this behavior is due to the inclusion of estimated lost
opportunity costs in market clearing.
