Features

Energy prices soar, power still at a premium

The Associated Press
Wednesday December 13, 2000

SACRAMENTO — Strains on the state’s power grid prompted more calls for energy conservation Tuesday, just hours after a Stage Two alert ended. 

Wholesale electricity prices, most of their cost-limits removed as the state hunted for new energy, continued to soar. 

On Monday, the cost of wholesale electricity reached more than $900, and by Wednesday it was expected to exceed more than $1,100. Last year at this time, the cost was about $45, or less. 

For most electricity, the price per megawatt hour last week was capped at $250. 

But the managers of the state’s power grid, the Independent System Operator, asked the Federal Energy Regulatory Commission to eliminate that cap to enable the state to get more energy supplies. 

FERC quickly agreed, and the cap was lifted. 

The California Power Exchange, a sort of wholesale energy market that coordinates the buying and selling of electricity, later asked FERC to remove any remaining sales subject to the $250 cap.  

The Exchange said traders were abandoning its trading floor to take advantage of the unlimited prices through ISO. 

“This will allow suppliers to protect themselves from being forced to supply energy that are below their costs,” the Power Exchange said in its petition to FERC, filed Monday. 

FERC said Tuesday it was considering the Exchange’s request. 

The federal commission, already conducting a investigation into California’s deregulated electricity system, is expected to issue its long-awaited plan to resolve the state’s power crisis on Friday. 

Throughout California on Tuesday, a Stage One alert remained in effect. A Stage One alert means power reserves are below 7 percent and all power users are asked to conserve.  

A Stage Two alert was lifted at midnight. 

Initial reports of warmer weather in the Northwest gave some hope that there would be more power to import to Northern California. 

“We are still fighting the same things, transmission constraints, cold weather.  

We are hearing it’s not quite as cold in the Northwest, so that could help out a lot,” said ISO spokesman Patrick Dorinson. 

The ISO watches the power grid for about 75 percent of the state. 

Last week, Stage Two emergencies were declared every day when power reserves fell below 5 percent.  

On Thursday, the ISO declared a Stage Three emergency, but fell short of mandating rolling blackouts. The energy forecast improved this week when some power plants came online. 

Power supplies were adequate in Southern California, but Northern California is less certain, Dorinson said. 

“We are working on ways to bring power in from the Northwest. We are only a very little bit better than we were this time last week,” he said.