Go to the following Website for a course outline from a University of Chicago Graduate Bus School Course and look at class 16.
Link to U of Chicago Course Outline >
There are two things to look at the first is the Power Point slides (see the last slide).
The course instructor argues that the true causes were:
(1)Short Term Contracts and The Requirement to Sell Through the PX
(2)Underscheduling of Load and Resources
(3)Governance of PX and ISO
(4)Auction Design
(5)Demand Response
Second there is FERC's analysis of the problem back when everyone was in the thick of things. That is found in the report, which is linkable at that site.
FERC basically says that the State of California messed things up pretty badly and provided some solutions that the State refused to implement.
Hopefully this provides a little more documentation that the problem resides with the State of California government (legislature, PX, ISO, DWR, Gov's Office) and that they were not the innocent victim they are trying to portray
The Commission finds in this order that the electric market structure and market rules for wholesale sales of electric energy in California are seriously flawed and that these structures and rules, in conjunction with an imbalance of supply and demand in California, have caused, and continue to have the potential to cause, unjust and unreasonable rates for short-term energy (Day-Ahead, Day-of, Ancillary Services and real-time energy sales) under certain conditions.
One of the FERC recommendations from Nov. 2000 was the underscheduling penalties which have now gone by the wayside. I suspect that was because the penalties against Cal-ISO quickly ran up into the Billions of dollars, and politically, FERC had no way to enforce them. Cal-ISO is obviously still engaged in underscheduling.
Let's hope FERC stands fast on the independence issue.
Of course, a major West Coast grid crash would give FERC the political cover to step in and fix both the underscheduling and independence problems. Maybe FERC has decided to just step aside until the inevitable happens?
?? the addition of a penalty charge for deviations in scheduling in excess of five percent of an entity’s hourly load requirements and the disbursement of penalty revenues to the loads that scheduled accurately;?? the establishment of independent, non-stakeholder Governing Boards for the PX and the ISO; and