FERC extends $1,000 price cap on NY ISO power
Dow Jones Interactive
October 24, 2001
 
 
Creating chaos out of order ; Power play: Federal order to merge electric transmission grids will hurt Maryland consumers.
Dow Jones Interactive
October 24, 2001
 
 
Calif Resells Surplus Power At A Loss In Second Quarter
Dow Jones Interactive
October 24, 2001
 
 
 
 
 
 
 
 
 
 
FERC extends $1,000 price cap on NY ISO power
 
WASHINGTON, Oct 24 (Reuters) - The U.S. Federal Energy Regulatory Commission on Wednesday agreed to extend a price cap of $1,000 per megawatt hour for wholesale electricity bids handled by the New York Independent System Operator. 

The New York ISO asked FERC to approve an extension through April 30, 2002, for the price cap, which first went into effect in July of last year. 

However, FERC said it expected power supplies in New York City and Long Island to remain tight through the summer of 2002. The ISO would likely request another bid cap extension at that time. 

Therefore, FERC said the price cap will last as an interim measure until the new Northeast Regional Transmission Organization is up and running. 

"We believe that our decision ... will promote price certainty and market participants' confidence in the New York ISO-administered markets, which will increase supply, improve reliability and ... lower energy prices," the agency said in its order. 

The New York ISO operates one of the nation's biggest wholesale electric markets with billions of dollars in transactions. 

The $1,000 price cap was first adopted to control market manipulation and prevent artificially inflated prices. The cap is supported by several large utilities, such as Consolidated Edison Inc. , which were concerned about high wholesale power prices that occurred after the New York ISO took control of the state's power grid. 

FERC aims to create four huge Regional Transmission Organizations to replace the New York ISO and similar groups in managing the nation's power grid. Federal regulators see the RTOs as a way to avoid a repeat of the power crisis in California last winter, in which the antiquated U.S. grid prevented more power from flowing into the state. 

Under FERC's plan, the RTOs would be for-profit groups in the U.S. Northeast, Midwest, Southeast and West. Each region would combine public utility transmission facilities to provide open access, more reliable power and lower rates for consumers. 

However, some utilities have been hesitant to join an RTO because they will some lose control over the rates they charge other companies to use their power lines. 


Creating chaos out of order ; Power play: Federal order to merge electric transmission grids will hurt Maryland consumers.


USING scare and bully tactics, the federal government is trying to force Maryland electricity consumers into paying higher prices for less reliable service and less local control. 

That's the outlook for the Federal Energy Regulatory Commission's plan to create four new large regional power transmission groups to manage the nation's electric grid. The efficient, stable, economical PJM Interconnection grid system that's taken over 70 years to refine would be twisted and subverted to serve the needs of high-cost New York. 

Maryland's carefully crafted deregulation plan to benefit consumers and utilities is also threatened by the FERC order to create a Northeast regional transmission organization within three years. 

Challenges by Maryland, Virginia and Washington to the federal agency's mandate have been ignored. So have protests from Vermont and New Hampshire. 

Curiously, FERC cited the PJM network, which includes Maryland, as a model for the nation. Then it ordered a hasty merger of PJM with less able New York and New England systems. 

Warning of California -type energy problems for the rest of the nation, FERC has pressed its theory that bigger is always better. It ignores the fact that California is the largest U.S. electric market and still failed due to arrogant mismanagement. 

Some opposition to the FERC plan is based on loss of control by state regulators and existing regional systems. States opposed to deregulation fear the plan will force that change on them. 

Even within PJM, which serves five states and Washington, members hold differing positions on forming mega-regional networks. 

But PJM is the largest competitive wholesale power market in the world and has served its 22 million customers well. There's little benefit and a lot of risk in forcing it into a shotgun marriage with less capable Northeastern partners.

 
Calif Resells Surplus Power At A Loss In Second Quarter
 
LOS ANGELES -(Dow Jones)- The California agency buying power in lieu of the state's ailing utilities resold electricity in the spot market during the second quarter at an average price of $45 a megawatt-hour, the agency said Wednesday. 

The announcement by the California Department of Water Resources was an answer to critics who blasted the department this summer for having to resell surplus power for as little as $1 a megawatt-hour because it secured too much electricity under long-term contracts negotiated by the administration of Gov. Gray Davis, the department said. 

In a press release, the department's California Energy Resources Scheduling division, its power-marketing arm, said it resold 224,871 megawatt-hours, or 1.1% of its total purchases. That power generally was first bought on the spot market or through monthly or quarterly contracts, not the long-term contracts, the department said. 

Such sales are typical of any power-buying operation, as demand for electricity can vary in unpredictable ways, the department said. 

The DWR is responsible for buying all the power needed by the customers of the state's three main utilities beyond what the utilities generate themselves or have secured under their own long-term contracts - or about one-third of the total. 

According to the DWR, power secured under Davis' long-term contracts covers one-third to one-half of the electricity it must supply. Short-term deals, such as monthly or quarterly contracts, represent one-third of the portfolio. The rest is bought in the spot market. 

The state has put its average cost of power under the long-term contracts at 7.9 cents per kilowatt-hour for the first five years and 6.9 cents per kilowatt-hour for the next five years. 

Davis has taken heat for locking up too much electricity at high prices. Similarly, the Department of Water Resources has been criticized for amateurish purchasing practices. 

The DWR releases information on its power transactions quarterly to protect its negotiating position, the department said. 

The DWR buys power for customers of PG&E Corp. (PCG) unit Pacific Gas & Electric, Edison International (EIX) unit Southern California Edison and Sempra Energy (SRE) unit San Diego Gas & Electric.