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Pastimes : The California Energy Crisis - Information & Forum
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To: Bearcatbob who wrote (1485)10/7/2002 6:28:45 PM
From: Raymond Duray  Read Replies (1) of 1715
 
PEAKER PRICING

Re: California Gov. Gray Davis took the $1,900 price as final proof the state was being gouged. That's not really the case. Such prices have always been paid, even in regulated markets. Edison, for example, had charged California consumers twice Reliant's price when it owned the Ellwood plant in 1995.

AND

Wow! I didn't know that back in 1995, the peak power price out of the Elwood plant, run by those very ethical staid REGULATED California utilities was TWICE the price those terrible IPPs charged during the latest power crisis.

You are being either completely naive or total disingenuous in comparing the peaker rate of 1995 with that of the manipulation of 2000-1.

In 1995, the market was structured so that an outlier like the Elwood plant charging ~$3,800/MWH was the price that was paid to that plant alone.

Due to the devious wording of AB 1890, in 2000-1, the CalPX, CalISO and CDWR were forced by an insane scheme to pay the highest bid price on accepted power from the IPPs during any particular contract period to all market participants. A totally idiotic approach to pricing, created by the IPPs for their own scheming advantage.

Thus what was once an outlier plant whose cost could be blended into the rate base was transmogrified into the horror show where "market power" was abused in order to inflate the hourly costs to astronomical levels for all market players, regardless of their base cost of operation.

This was an insane scheme that was written into law by the clever attorneys and traders for the IPPs. There was no consumer/customer input into the creation of the monstrously manipulable AB 1890 scheme.

-Ray
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