Forecast Brighter but Electricity Price Soars
Day 9 of California’s electricity emergency promised an improving supply picture both within the state and through more imports from the Pacific Northwest, which on Tuesday continued to dodge the expected hit from an Arctic cold front.
But a disruption in supplies from Utah late in the day ended up pushing California’s power grid into a Stage 2 emergency.
Meanwhile, California electricity prices continued to set records, a growing toll that consumer advocates worry will eventually come out of customers’ pockets.
“This is extraordinary,” said Doug Heller, consumer advocate with the Foundation for Taxpayer and Consumer Rights in Santa Monica. “This is the harbinger of a recession to come.”
The average price of electricity sold Tuesday on the California Power Exchange for use today was $1,182.02 per megawatt-hour. Each day since a price cap of $250 per megawatt-hour was loosened Friday, a new record has been reached in the state’s primary market for electricity.
If that price were sustained for a month and consumers were no longer protected by the current rate freeze, the average monthly residential bill would jump to $620, Heller said. In December 1999, when wholesale prices were about $30 per megawatt-hour, the average residential bill for a Southern California Edison customer was $50.
The so-called soft price cap, which requires power generators to detail the costs behind the price bid, is like one proposed by the Federal Energy Regulatory Commission, said Kellan Fluckiger, chief operating officer for the California Independent System Operator, which balances electricity supply and demand on the power grid serving 75% of the state. The move was intended to keep electricity from fleeing the state for higher prices elsewhere in the region and to help Cal-ISO run a more orderly market, he said.
It is too early to tell whether the first aim was successful, Fluckiger said, but he added that the new cap has made life more predictable at Cal-ISO, where last week dozens of operators were making frantic last-minute calls to fill gaps in the energy supply to ward off blackouts. Those operators now can devote more time to running the grid.
Electricity demand in California peaked at slightly more than 33,000 megawatts Tuesday; about 8,500 megawatts of in-state power remained unavailable because power plants were undergoing maintenance. Electricity reserves fell to less than 5% late in the day when some power facilities in Utah suddenly tripped offline, cutting imports from the Southwest by 1,200 megawatts. Cal-ISO then declared its 30th Stage 2 alert of the year.
Customers of the Los Angeles Department of Water and Power are unaffected by the power emergencies. In fact, the city-owned utility just brought two idled plants back online to help supply the Cal-ISO grid, selling nearly 300 megawatts Tuesday at cost, said General Manager S. David Freeman.
“We’re doing our best to be a good neighbor,” he said.
Cal-ISO had hoped to avoid declaring a Stage 2 emergency, which often requires power interruptions to some big electricity users, but a bigger supply from the Pacific Northwest kept the more serious emergency at bay for most of the day. The most serious of all, a Stage 3 emergency, was declared Thursday, when the grid was within 1.5% of running out of power, but the state narrowly averted rolling blackouts.
The expected Arctic cold front, which had Pacific Northwest utilities warning of the possibility of the region’s first-ever Stage 2 emergency, “wimped out on us,” said Ed Mosey, spokesman for the Bonneville Power Administration, which markets power from several federal dams. Temperatures were close to normal in parts of the region, and “we’re at Stage Nothing now,” Mosey said.
The outlook improves for later in the week because some power plants that were offline should be repaired, returning as much as 1,500 megawatts of electricity in the state, Fluckiger of Cal-ISO said. One megawatt is enough to power about 1,000 homes.
In the last few days, several power plants that had reached their air-pollution limits, particularly in Southern California, were returned to operation through agreements with the South Coast Air Quality Management District.
As a result, Southern California has excess power, but it can’t send it to electron-starved Northern California because of constraints on the key transmission link between the halves of the state, Fluckiger said.
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Deregulation of California Electricity
Special Power Report: Recent articles and graphics explaining why the state set up a market system for power and how it affectrs consumers are at
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