The Federal Energy Regulatory Commission (FERC) says the wholesale electric market structure in California is “seriously flawed,” and it proposes a series of sweeping changes to reshape the state’s markets and help remedy the electricity pricing problems that have plagued California this year. But, says the Commission, consumers will continue to pay higher prices because of inadequate generation supply, and they will continue to do so unless the state of California also addresses inadequate siting of generation and transmission, and development of demand-side response.
The Commission proposals include a major overhaul of the California Independent System Operator (ISO) and Power Exchange (PX) market rules in order to provide more flexibility for market participants to manage their risks and broaden ther opportunities to buy and sell power. Chairman James J. Hoecker said: “Never has this Commission had to address such a dramatic market meltdown as occurred in California’s electricity market this summer. Never have residential electricity customers been as exposed to economic risk and financial hardship as they were in San Diego. Incumbent utilities have also accumulated dramatic cost under recoveries in this short time frame. It is important that this Commission act.
“This order,” he continued, “is the beginning, not the end, of the Commission’s consideration of California’s problem. . . We do not offer short-term or Band-aid solutions.”
For further information, visit http://www.electricnet.com/read/nl20001106/360510.
Based on a report from ElectricNet
