Board Sets Lower Price Cap on Backup Power

The board of governors of the California Independent System Operator narrowly approved a new cap on the price of electricity in the market for emergency-backup power that the Folsom-based nonprofit runs. The price cap will vary based on a complicated formula that takes into account such things as fuel prices, and will range as low as $100 per megawatt-hour and as high as $250 per-megawatt hour. The price has been capped since Aug. 1 at $250 per megawatt-hour for so-called real-time, ancillary services. Most electricity is purchased the day before it is needed, and additional power is purchased in the Cal-ISO market. But this summer, an unprecedented amount of power was sold through Cal-ISO’s market, and the board has been trying progressively lower caps to control price spikes and shift deals back into the primary California Power Exchange market. The new price cap will go into effect Nov. 3, or as soon as the Cal-ISO staff can implement it. In addition, Los Angeles Department of Water and Power General Manager Director S. David Freeman, who helped found Cal-ISO but has become a vocal critic, joined the organization’s board.