Cal-ISO market monitor says 4Q15 prices decreased to lowest levels of the year

Transmission congestion in the California ISO (Cal-ISO) market had some minor effects on power prices in 4Q15, though prices were in the day-ahead and 15-minute markets dropped to their lowest levels of the year in peak and off-peak demand periods, according to the Department of Market Monitoring at the Cal-ISO.

The lower power prices were primarily caused by lower natural gas prices and reduced loads during 4Q15, the department said in its Feb. 24 report on 4Q15 market issues and performance.

Day-ahead prices during December 2015 averaged $31 per MWh during peak demand periods and $27 per MWh during off-peak demand periods, both of which were lower than in any month during the previous 15 months, the report said. Day-ahead prices during 4Q15 averaged $33 per MWh during peak periods and $28 per MWh during off-peak periods, the report said.

Average prices in the 15-minute market were lower than day-ahead prices by about $1 per MWh during 4Q15, which was a drop from 3Q15 but not below prices seen in May 2015, according to the report.

High temperatures on several days in October 2015 resulted in higher-than-expected loads and some very high real-time prices, the Cal-ISO Department of Market Monitoring said. Real-time prices spiked above $1,000 per MWh for several intervals during those days due to regional congestion and low day-ahead scheduled load compared with what was experienced.

Price spikes in the 5-minute and 15-minute markets occurred but remained fairly infrequent during the quarter, the report said.

Transmission congestion was relatively low and had a small impact on average prices in some areas, with much of the congestion due to transmission outages, the report said. Prices in the Pacific Gas and Electric area increased by 13 cents per MWh in the 15-minute market during 4Q15 due to congestion, and day-ahead prices in San Diego Gas and Electric and Southern California Edison increased by 9 cents per MWh and 15 cents per MWh, respectively, due to congestion. Price impacts were greater during specific days during the quarter when the transmission congestion was prevalent, with some impacts reaching above $21 per MWh in parts of the Cal-ISO market, the report said.

Much of the congestion was related to Path 15 and the Barre–Villa Park transmission facilities, with the Barre–Villa Park constraints during most of December due to an outage on the nearby Miraloma–Olinda 220-kV line, according to the report. The loss of that transmission capacity affected prices in the southern part of the Cal-ISO market.

The report touches on various issues, including NV Energy becoming the latest participant in the western energy imbalance market (EIM) on Dec. 1, 2015, after PacifiCorp joined in November 2014.

Because of the high energy transfer capability and limited congestion between NV Energy and the Cal-ISO, local NV Energy prices often closely reflected system prices, according to the report.