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Department of Market Monitoring Report - Memopdf 268K Summary:Memorandum to ISO Operations Committee from Keith Casey, Director, Market Monitoring, Dated June 7, 2006, Re: Market Monitoring Report Extract:EXECUTIVE SUMMARY This month’s Market Monitoring Report provides a brief update on DMM activities over the last month and provides a detailed assessment of several key market trends and issues. Overall spot market prices during April and May have been very low in the CAISO and throughout the West due to an abundance of hydroelectric and other generation sources, combined with relatively low loads. During April, for instance, real time energy prices averaged only about $28/MWh, or 33% lower than April of last year, compared to a decrease in spot market gas prices of less than 10% relative to April of last year. Ironically, however, the same conditions that contributed to low overall spot market energy prices have also created a number of temporary reliability and market issues. For example, due to relatively low overall prices and high hydro conditions, the supply of fast ramping and regulation capacity has been very thin during ramping and off-peak hours, leading to sporadic price spikes in the real time energy and regulation markets. In addition, the abundance of surplus generation from hydro resources and minimum load energy from thermal units – combined with congestion into SP15 – has caused the CAISO to export large volumes of energy from NP15 at relatively low decremental energy bid prices through the real time pre-dispatch process. Thus, while overall spot market costs have been very low, the need to manage the reliability problems associated with overgeneration in the real time market has created some additional costs for the CAISO system. Document Locations: |
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