PowerFacts
EPSA PowerFact: Organized Market Working in California: Cal-ISO Reports Lower Costs and Record Demand
"In 2006, the California ISO experienced its best year ever - as measured by grid control criteria set by the Western Electricity Coordinating Council (WECC).... In 2006, the California ISO exceeded every standard by a substantial margindemonstrating high-quality performance in operating the grid safely, reliably and efficiently."
California ISO, 2006 Annual Report, Powerful Delivery: Behind the Lines, (issued July 13, 2007).
<center>THE ISO CONTINUED TO DRIVE DOWN COSTS IN 2006 ... </center>
- "For the fifth consecutive year, operation of the short-term electricity markets managed by the California ISO were competitive and stable-reflecting significant strides made by the state through infrastructure enhancements and long-term power contracting." (p. 9)
- "The average "all-in" cost of wholesale energy, when adjusted for natural gas prices, declined nearly 18 percent from $57.83 per megawatt-hour in 2005 to $37.55. This reflects a decline in the total costs associated with serving load in the ISO Control Area.... Total wholesale energy costs declined 16 percent from $13.6 billion in 2005 to $11.4 billion in 2006, following three years of cost increases. This largely follows the trend in the price of natural gas, which rose steadily from 2003-2005, then dropped last year." (p. 9, emphasis added)
- "In the last two years, the costs associated with maintaining grid reliability were reduced by 57 percent." Costs fell from $1.1 billion in 2004 to $476 million in 2006. (p. 11)
- "Intra-zonal congestion costs associated with the management of bottlenecks on local transmission lines were reduced significantly for the second year in a row. In 2006, total intra-zonal congestion costs were $207 million, which represents a 51 percent decrease from the 2004 total of $426 million." (p. 8)
<center>... WHILE EFFECTIVELY MEETING RECORD DEMAND</center>
- "The heat wave of July 2006 will go down in the history books as a 1-in-57 year event that scorched the state and drove demand for power to levels no one expected to see until 2010.... Actions contributing to the success included: Independent generator owners performing vital repairs in record time to keep megawatts flowing to the grid," among others. (p. 7, emphasis added)
- "Electricity generators contributing to the ISO control area operated around-the clock for the duration of July's ten-day heat wave as electric loads exceeded 45,000 megawatts daily, including weekends." On Monday, July 24, the California ISO successfully met a record demand of 50,270 megawatts while maintaining the minimum 5 percent operating reserve. The previous daily record for demand of 45,431 megawatts was set in 2005. (p. 7)
- "In 2006, the California ISO experiences its best year ever - as measured by grid control criteria set by the Western Electricity Coordinating Council (WECC).... In 2006, the California ISO exceeded every standard by a substantial margin-demonstrating high-quality performance in operating the grid safely, reliably and efficiently." (p. 8)
- "One of the most significant industry events of 2006 was the introduction of new resource adequacy rules that ensure ample power supplies are available to meet California's growing consumer demand.... These new requirements have had a dramatic impact on ISO control room operations, helping to ensure grid reliability by reducing reliance on the real-time market and last minute, backstop measures." (p. 17)
CONTACT: JOHN SHELK
(202) 349-0154or 703-472-8660
EPSA is the national trade association representing competitive power suppliers, including generators and marketers. These suppliers, who account for nearly 40 percent of the installed generating capacity in the United States, provide reliable and competitively priced electricity from environmentally responsible facilities serving global power markets. EPSA seeks to bring the benefits of competition to all power customers.