California ISO reconsiders price cap

The California Independent System Operator is meeting in emergency session today to reconsider its vote of last week, establishing price caps of $500/Mw on wholesale electricity purchases.

Jul 6th, 2000


The California Independent System Operator is meeting in emergency session today to reconsider its vote of last week, establishing price caps of $500/Mw on wholesale electricity purchases.

One ISO member called for the meeting saying she did not understand that vote and meant to vote for a lower price cap of $250/Mw, says Patrick Dorinson, spokesman for the California ISO.

An emergency meeting can be called by one member, only if two other members support the move, he says.

The ISO had previously voted two times on the issue of price caps. The first vote on $250/Mw caps failed by a vote of 12 to 12. A second vote to adopt the $500/Mw price caps passed 16 to 4 with 4 members abstaining. Some sources reported the Los Angeles Department of Water & Power, a municipal utility, was instrumental in getting the board to reconsider the matter.

California power market observers have mixed feelings whether there are sufficient votes to rescind the vote on the $500 cap and replace it with a $250 cap.

It appears that there are sufficient votes from the three calling for the emergency meeting to force a change in the outcome. On the other hand, sources say that there are two other members who voted for the $250 caps who have changed their mind.

And these sources, who declined to be named, say that one ISO member has submitted a letter of resignation over the entire affair. While the ISO board has not acted on the letter yet, it is unclear if the ISO will consider the resignation before or after the vote in this special meeting. The timing of this resignation could impact the vote.

No matter how the outcome, the entire incident has generated a lot of �bad feeling� out there, says Joe Ronan, a regulatory affairs executive at Calpine Corp., San Jose, Calif.

�There�s no doubt that a lot of people are concerned about their electric bills,� says Ronan. �At the same time, lower price caps might mean that out of state generators might not sell into the California market.�

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