Report: Pacific NW Power Prices Top California

SEATTLE -- Drought and a lack of aggressive regulatory oversight has pushed spot market prices for wholesale electricity in the Pacific Northwest even above those paid in California, the Seattle Times has reported. The newspaper hired a consultant to examine trades for electricity made on the "mid-Columbia" regional power market during the first three months of this year and surprisingly found that power on the next-day delivery spot market averaged $267 per megawatt hour (MwH), 16-percent above the average Northern California market price and 28-percent higher than in Southern California. A lack of rainfall has limited the region's hydroelectric production, and some observers believe that California's increasingly hard line against profiteering and its unpaid tab of power purchases has inspired some power generators to seek greener pastures in the Northwest. "Here, the power marketers know they can keep the prices up," Paula Green of Seattle City Light told the Times. State lawmakers in Washington, Oregon and California have repeatedly asked the Federal Energy Regulatory Commission to step in and cap wholesale power prices throughout the western United States. FERC has refused on the grounds that such caps would discourage the construction of new power plants in the region. "We have a deepening crisis here, and it demands tremendous (federal) involvement," said Rep Jay Inslee, D-Wash. Spot market electricity is purchased by utilities to cover last-minute shortfalls and generally goes to the highest bidder. Private generating companies that have been accused of scalping electricity point out that the free market sets the price, and that they often aren't even paid for the electricity they have sold into California. According to the Times, spot market sales as recorded by the energy industry publication Energy Market Report, showed that the Pacific Northwest market closely tracked California most of last year. In December, however, a cold snap in the Northwest and energy shortages in California sent the Northwest average to $552 MwH. When prices fell back this year, the Northwest became consistently higher than California. In February, mid-Columbia prices averaged $280.46 MwH compared with $238.31 MwH in Northern California and $197.50 MwH in Southern California. Retail rates in the Pacific Northwest remain below California, however increases are in process. Seattle City Light has raised its rates some 28 percent this year, and the Bonneville Power Administration has warned its industrial customers that its contract prices could go up more than a hair-raising 200 percent this autumn.

Source: UPI