RE: [hreg] dirty tricks
Interestingly enough the whole ercot design is to increase the volatility of the wholesale market. 95%+ of the electrical market is all pre negotiated amounts and rates, the balancing market is to make up for extra that is not on a contract (you don’t want to over buy) so the risk analysis teams try to guess as close as possible what the actual usage will be.
They used to cap the price at $1000 but recently moved it up to $1500 the planned final cap is projected to be $3000. Increased volatility attracts new generators or has existing generators maintain a higher rate of readiness. Also having a volatile market places a higher value on demand response and gets more participants willing to curtail their loads during high price spikes dropping the need for peak generation. This is a really simple explanation of a complicated market that will even get more complicated as they implement the new nodal market which will add congestion pricing as well.
The ercot meetings are open most of the time and its quite interesting on how it works.
From: firstname.lastname@example.org [mailto:email@example.com] On Behalf Of hydroternegy
Sent: Thursday, April 05, 2007 1:01 PM
Subject: [hreg] dirty tricks
Don't know if anyone saw the news report about the sudden surge in
wholesale price of electricity in austin , over 1000% spike for 1 hour
on Monday. looks like supply was inadequate to meet demand, and shot
the price thru the roof. you won't be able to audit the cost, but you
could have been paying 18.a k/w that hour! looks like there is a need
for more generated electicity in our area, perfect for more coal power