California Power Prices Decline as Demand Drops Below ForecastsNaureen S. Malik
Northern California wholesale electricity prices declined as demand dropped below forecasts.
The California Independent System Operator Inc. issued a Flex Alert for today through tomorrow asking consumers in the northern part of the state to conserve power and the operators of power plants and transmission lines to restrict maintenance. Demand was expected to peak at 48,479 megawatts in the 5 p.m. hour, the most since August 2007.
The National Weather Service declared an excessive heat warning for much of California, including Sacramento, Fresno and Bakersfield. The high temperature in Sacramento, the state capital, may reach 105 degrees Fahrenheit (41 Celsius) today and peak at 107 in two days, according to the weather service.
“We are still in a Flex Alert situation today and tomorrow and will be watching conditions closely for Wednesday or until the heat wave breaks,” Steven Greenlee, a spokesman for the California ISO in Folsom, said in an e-mail. “We are concerned about wildfires and so the risks remain with unplanned transmission and generation outages.”
Spot electricity on Northern California’s NP15 hub slid $5.28, or 11 percent, to average $42.59 a megawatt hour for the hour ended at 1 p.m. West Coast time from the same time on June 28, grid data compiled by Bloomberg showed. Yesterday’s day-ahead price outlook for the hour was $73.89.
PG&E Corp. asked its Northern California utility consumers to conserve powers during extreme heat and issued a peak pricing event from 2 p.m. through 6 p.m. today and tomorrow, according to its website. A surcharge is added to customers participate in a peak day pricing program during the afternoon peak-demand period in exchange for credits during other months.
PG&E expects demand response programs to cut consumption by about 390 megawatts, Joe Molica, a company spokesman in San Francisco, said by telephone. The dynamic pricing is available to about 7,000 business locations, he said.
“I heard just today that one business has plans to shift their hours around to close around 2 p.m. and open much earlier in the morning,” Molica said. “Our demand response customers are great. They’ve been excellent about answering the call for conservation.”
Power consumption on the California grid was 41,907 megawatts during the hour ended at 1:30 p.m., 1.4 percent below the day-ahead forecast of 42,500 megawatts for the hour, according to the grid’s website.
“We can’t draw an immediate conclusion about the Flex Alert response until after the events and there’s time to run the numbers,” Greenlee said. For the two Flex Alerts issued last year, demand was curtailed by 830 megawatts and 512 megawatts based on voluntary conservation and local demand response, he said.
The amount of power generating capacity totaled 12,326 megawatts as of 3:15 p.m. yesterday, up from 12,255 megawatts at the same time on June 28, according to daily reports published by the grid operator.
A 700-megawatt natural-gas fired unit at Dynegy Corp.’s Moss Landing power plant, about 95 miles (153 kilometers) south of San Francisco, has returned to service after it didn’t ramp up this morning, said Chris DaCosta, a Boston-based analyst with Genscape Inc., which tracks real-time power data.
Katy Sullivan, a spokeswoman for Dynegy in Houston, declined to disclose real-time operations of its plants per company policy, according to an e-mail response to questions.
Southern California’s SP15 hub was down $4.97, or 11 percent, at $41.84 during the hour ended at 1 p.m., below the day-ahead outlook of $73.81.
Spot electricity also dropped from New England to the Midwest and Texas amid lower-than-forecast demand and milder weather. Parts of the East Coast experienced heavy rain and overcast skies today.
New York City prices tumbled $48.12 to average $30 a megawatt-hour for the hour ended at 4 p.m. Eastern from $78.12 during the same time on June 28. Boston dropped $36.28 to $32.73 a megawatt-hour during the same period.
Power on PJM Interconnection LLC’s benchmark Western hub, which includes prices from Washington to Erie, Pennsylvania, slid $5.53, or 13 percent, to $36.31, below yesterday’s outlook of $44.42.
In the Central U.S., Houston prices fell $14.72, or 28 percent, to $38.25 a megawatt-hour while the Indiana hub declined $11.44, or 30 percent, to $26.88.