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Market Analysis Report Nov-Dec 2002 - Memorandum

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Summary:

Market Analysis Report for November and December, 2002 (Memorandum), Board of Governors Meeting, January 23, 2003

Extract:

Phase 1a of the ISO’s 2002 Market Redesign (MD02) has been in place since October 30. This increased the $91.87-per-megawatt-hour (MWh) price cap to a damage control bid cap of $250/MWh, and also put into place the Automatic Mitigation Procedure (AMP). Meanwhile, natural gas prices have risen steadily over the past few months, peaking above $5 per million British Thermal Units (MMBtu) in December. These factors have all contributed to an increase in electricity prices. The market-clearing price (MCP) for real-time incremental (INC) energy procured through the ISO’s Balancing Energy Ex-Post Price auction market (the BEEP Stack) averaged $64.70 and $62.38 per megawatt-hour (MWh) in November and December, respectively, compared to $59.62/MWh in October. The BEEP price for decremental (DEC) energy averaged $14.17/MWh in November and $15.23/MWh in December, up substantially from the $10.08 level seen in October. The new AMP mitigation measures have yet to be triggered. Since the inception of Phase 1a, AMP has detected Conduct Test failures in at least 36 hours in November or December. None of these incidents resulted in failures of the Impact Test. Please see the section on real-time markets later in this document for a detailed discussion of AMP. Beginning January 1, the utility distribution companies (UDCs) began procuring their own net-short forward-scheduled energy requirements. The Department of Water Resources’ California Energy Resources Scheduler (CERS) is no longer procuring electricity on the utilities’ behalf, but will provide the utilities with a guarantee of credit upon which they can make their own purchases. Also on January 1, the ISO assumed operational control of transmission lines belonging to four new municipal Participating Transmission Owners (PTOs), extending ISO control over several new branch groups.

Document Locations:

• Market Monitoring - 2003 Reports and Presentations