Wholesale electric prices soar anew

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Sacramento Bee

With wholesale prices again soaring on California’s biggest power-trading market, grid operators called the year’s 30th “stage two” electric emergency Tuesday.

One consumer group estimated that if those prices continued and were passed along to ratepayers, the average Californian’s electric bill would be $620 in December.

Electric rates are currently frozen, although Pacific Gas and Electric Co. and Southern California Edison are fighting in federal court and before the state Public Utilities Commission to end the freeze and pass along their costs.

Although prices reached $1,500 a megawatt-hour Tuesday on the California Power Exchange, where most of the state’s electricity is traded, problems with new trading rules drove the average price much lower.

The issue, which revolves around how prices should be revised to reflect space crunches on transmission lines, is fueling anxiety between two California power agencies, the PX and the Independent System Operator, which runs the transmission grid.

On Tuesday, the glitch produced two sets of prices – an average of $1,182 a megawatt-hour before the transmission calculations dropped it to $258.

One year ago, the average PX price was about $30.

The issue is expected to simmer at least until Friday, when the Federal Energy Regulatory Commission will consider the state’s electricity chaos.

Meanwhile, Tuesday’s wholesale costs fueled more calls to re-regulate electricity.

“The prices that we’re seeing are so out of whack … it’s just obscene,” said Doug Heller, a consumer advocate with the Foundation for Taxpayer and Consumer Rights, which promises a 2002 ballot initiative on the issue.

As the ISO declared a “stage two” emergency Tuesday and called for continuing efforts to conserve electricity, the agency’s chief operating officer, Kellan Fluckiger, predicted that more power could soon be available.

Power plants capable of generating 1,000 to 1,500 megawatts are expected back on line by the end of the week, Fluckiger said.

By week’s end, only about 7,000 megawatts of capacity might be off line, he said, compared with 11,000 megawatts last week.

Consumer Watchdog
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