After counseling from some of its board members, the CaliforniaIndependent System Operator (ISO) has decided not to seek relieffrom the Federal Energy Regulatory Commission for an unprecedentedprice spike it experienced July 9 for reserve power in California’srestructured electricity markets, according to an ISO spokesperson.

Apparently cooler heads prevailed July 10, the day after the ISOheld a press conference marking its 100th day of operations.Coincidentally, the report about an unidentified electricitygenerator bidding $5,000-per-megawatt-hour to provide 1,500megawatts of spinning reserve sent some reporters from majorCalifornia newspapers spinning, although they noted in theirnext-day coverage that end-use consumers would not pay for theprice spike.

In making the report, ISO officials emphasized that they wouldask FERC on an “emergency” basis to take action apparently torevise a recent decision that removed price caps on someout-of-state suppliers with operations in California. The followingday, however, the ISO changed its mind, noting that the 500% to1,000% price spike was an aberration and most likely the marketwould correct itself with lower-cost spinning reserve providersbidding in the market.

Whatever the costs, they are borne by the three Californiainvestor-owned utilities, whose transmission facilities are beingoperated by the state-chartered, nonprofit ISO. Consumer electricrates are frozen for the first four years of the electricrestructuring.

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