FERC boosts cap for wholesale electricity prices in West

Damn. You beat me to it. I was just going to post this from Bloomberg:

Washington, July 11 (Bloomberg) -- Federal energy regulators raised a limit on California's wholesale electricity prices, after the state's power-grid managers lowered the cap during a heat wave in the state this week.

The price cap was raised to $91.87 a megawatt-hour, which had been the cap before state officials declared a power emergency Tuesday and again yesterday, according to an order from the Federal Energy Regulatory Commission. The California Independent System Operator had lowered the cap to $57.14 a megawatt-hour on Tuesday and $55.26 yesterday.

``We cannot expose customers in California and other Western states to the risks of a low price cap,'' the commission said in its order. A low energy price cap ``could cause severe supply disruptions''

The commission said the new price cap would be in effect through Sept. 20, effectively terminating the state's ability to lower the caps for the rest of the state's summer.

So the main question is my mind is why the so-called "journalists" (legends in their own mind that they are), have neglected to mention this little fact for the last three days.

Two obvious conclusion should hit the California consumer between the eyes.

First the price caps are meaningless when a reliable electric energy supply exceeds the demand by as little as 5%. Specifically CAISO or any other customer does not have to pay anymore for power than they want to. They can simply say no and turn off the lights or ...

California can get their consumption under control or allow more generation within the state. Either obvious solution seems to be beyond the grasp of the Davis administration.

Let's see Econ 101: ISO lowers price, supply should go.....(down). FERC doubles price, supply should go.....(up).

Hmmmm.....FERC wants to reduce the probability of outages in California.

I wonder how many of that 1000+ MW of industrial production that was curtailed in the Stage 2 Energy Emergency would have paid 10 cents/kWh to have avoided curtailment? Probably most of it! Was the artificially low 5+cent/kWh price cap helping or harming the California economy and future tax revenues of the state? (Harming).

How sad.

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