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Market Analysis Report

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Summary:

Market Analysis Report for March 2003 (Memorandum), Board of Governors Meeting, April 24, 2003

Extract:

During March, natural gas prices receded to the January levels of $4 to $5/MMBtu from the high prices that occurred in late February and early March. Day-ahead bilateral electricity prices fell in step with the lower fuel costs. Several price spikes occurred in March due to the need to dispatch higher cost peaking units to meet evening load ramps and during late evening hours when standard bilateral contract products for peak-hour energy deliveries end. In addition, on March 21, an explosion of a transformer bank at the Vincent substation in Southern California resulted in the ISO having to completely derate Path 26, a key transmission artery between Northern and Southern California. ISO operators and utility workers worked to partially restore flows on Path 26 to 600-925 MW by March 23, and were able to restore the path to its full capacity of 2500-3000 MW by early April. The capacity derates on Path 26 caused significant interzonal and intrazonal congestion around the State through the end of the month.

Document Locations:

• Market Monitoring - 2003 Reports and Presentations