Storms Can't Dampen Market Spirits (Some causes of high Cal electricity)

Clearing UP Western Price Survey ^ | December 20, 2002 | Jason Mihos

[Robert357]

Keeping pace with strong winds and rain in the West this week, power markets swept higher. Charging natural gas prices, as well as the on-again, off-again status of Diablo Canyon's nuclear units, appeared to contribute to spot prices' upward mobility.

Outages in the Path 26 area of the California Independent System Operator grid system also may have played a part in prices' performance. Cal-ISO considered calling for load curtailments in Southern California to account for the situation but eventually did not, according to reports.

Systemwide, loads on the Cal-ISO grid stayed in the mid-31,000 MW range, notching up to about 32,000 MW for peak hours on Thursday.

One trader expressed surprise over prices at the Mid-Columbia point, which saw unusually high premiums for light-load energy. "No one could figure out why it was so high," he said, noting that off-peak power at Mid-C traded higher than at NP15. Other traders pointed to low hydro supplies as the reason for the runup.

Another market player said credit issues appear to be influencing prices. Traders are making deals based on who they are cleared to do business with. "For example, you see a trade for 33 mills but you skip it and take the next one for 35 mills because you can do business with that company," said the trader. "It's driving up prices."

At the Diablo Canyon nuclear complex, both 1,100 MW units ramped down on Monday afternoon because of high ocean swells and associated maintenance. The units returned to 50 percent of capacity early Wednesday and returned to full power on Thursday, though it's likely that new storm fronts and high ocean waves could again threaten to clog the plant's intake lines this weekend.

At the Four Corners coal-fired station, No. 5 returned to virtually full power on Tuesday. The 750 MW unit fell off line for tube leak repairs last week.

Peak prices at NP15 and SP15 rose to a high of 53 mills/KWh this week. Heavy-load prices at Mid-Columbia reached 46.5 mills, and trades at the California-Oregon border fetched as much as 48 mills/KWh. Light-load prices around the state hovered in the mid-30 mills range, with SP15 off-peak prices dipping as low as 28 mills and Mid-C prices reaching 41 mills/KWh.

In the Southwest, peak prices nearly cracked 50 mills, with Palo Verde trades netting as high as 49.75 mills/KWh. Prices for light-load hours at Palo Verde ranged from 26.75 mills to 35 mills/KWh.

At Canada's AECO hub, the low end of the range for off-peak load increased from 6,390 MW to 6,601 MW as the week progressed. Peak demand reached 8,510 MW by Thursday.

[Robert357]

OK so there you have it folks.

The Cal ISO thought about interrupting load when three 500 kV transmission lines were knocked down near Palmdale outside of LA. The result may have helped push up the price of electric power in California.

Another factor in pushing up the price of electricity is that some utilities seem to have "questionable" credit ratings resulting in some sellers not selling. My goodness, is this price gouging? How will SCE & PG&E fair when they enter the market on January 1? Inquiring minds want to know!

HAPPY NEW YEAR! It should be interesting to watch what happens in the west coast power market this new year.

[Robert357]

I thought you might be interested in an example of what some whould call "price gouging" and others would call prudent business in the power markets.

Bottom line is that this should be an intersting New Year when it comes to power markets on the west coast.

[Libertarianize the GOP]

bump

[Robert357]

I am going to ask a retorical question.

I wonder under what conditions the Cal ISO will actually call for Load curtailment?

I suspect the answer is.....When other reliability groups force them to and not a moment sooner.

I sure hope that the federal litigation allows FERC to impose new leadership rules on the ISO's Board structure.

[Ernest_at_the_Beach]

Thanks for the ping and the post. Very interesting!

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[snopercod]

I wonder under what conditions the Cal ISO will actually call for Load curtailment?

Easy. After the grid has crashed.

I was flying near Santa Barbara once, in communication with LA Center for traffic advisories. My instructor and I were cruising along at 6000' when an AirWest Metro III commuter whizzed by us in the opposite direction about 1000' away. It was no problem, because we saw him.

But about 30 seconds later, LA Center called and gave us a "traffic alert". We responded that yes, we passed the traffic about 30 seconds ago."

I querried my instructor as to why they alerted us after the fact, and he said that they wanted it on the audio tape that they had alerted us, just in case we had already collided.

Get my drift?

[Robert357]

... he said that they wanted it on the audio tape that they had alerted us, just in case we had already collided. Get my drift?

Oh, I hadn't thought of that. Yes, after the system crashes, but before the media reports. I guess CYA is alive and well in many organizations.

[Grampa Dave]

You two should consider writing a book about CalISO, about how it came to power, the bad decisions and finally its disbandment. The insider traders in CalIso, the incompetents and other shady actors in and around CalIso.

Eventually someone like you two will be able to find most of the direct costs and indirect costs invoked by CalIso to the citizens of Californian and those living in states that send electricity to us.

Thanks for being on top of this fascist nightmare and keeping us posted. I think that due to people like you finding the truth and posting it on FR, the damage inflicted by CalIso was minimized. If they could have operated with only the Kali Media covering them, only God knows what they might done to this state. Thanks to both of you!

[snopercod]

Thanks for the kind words. Robert is the real expert here. I'm just a has-been power plant engineer.

[Grampa Dave]

Well, thanks to both of you, those of us under the heels of the ISO fascists, were able to get the real news, not the Goerbil's CAl DNC PR versions.

Fascism, socialism and communism can only be successful in they control all of the news sources. Thanks to FR, people like you and Robert357, some good Wall Street reporters and few good conservative writers around the nation, these isms no longer control all of the news.