The market-clearing optimization routines currently used in US RTO/ISO-managed wholesale power markets do not permit proper cost and benefit valuation of this flexibility because they do not take into account its joint-product genesis and its joint-product use. This chapter contends that an alternative swing-contract market design would permit a more appropriate valuation for the flexible provision of reserve (dispatchable power-paths) in centrally managed wholesale power markets. In current US ISO/RO-managed wholesale power markets, penalties for failure to follow dispatch instructions are administratively determined. Standardized failure-to-perform penalties and incentive payments could also be required aspects of the performance payment methods included within reserve offers. Finally, penalty and incentive payments can also take the form of appropriate adjustments in the amount of reserve procurement cost allocated by the ISO to each M(T) participant.