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Today in Energy

September 27, 2011

California electricity market reacted to the recent San Diego blackout

graph of real time prices and actual load for CAISO: Sept 8, 2011, as described in the article text
Source: U.S. Energy Information Administration, based on California ISO and Federal Energy Regulatory Commission.
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On September 8, 2011 a blackout affected about 1.4 million electricity customers in the San Diego metro area, with additional losses in Arizona, Mexico, and other areas of Southern California. The California Independent System Operator (CAISO) temporarily suspended wholesale real-time energy markets and established administrative prices during the time of suspension to help ensure electric reliability. Major shocks to an electric system usually cause price dislocation in the real-time market, while system operators took action to ensure the reliability of the system.

Much of Southern California was cut off from power imported from Arizona when a 500 kilovolt transmission line tripped out of service. This, in combination with the automatic trip of the two nuclear reactors at San Onofre Generating Station, drove up real-time, wholesale prices in SP-15 (the southern portion of the north-south transmission backbone in California), San Diego Gas and Electric (San Diego Metro Area), and SoCal Edison (Los Angeles area) zones at the same time.

Yesterday's Today in Energy article described how the real-time wholesale electric power market responds to unexpected events. In this case, the disturbance was so great that CAISO temporarily suspended the real-time market. The pricing model used to calculate Locational Marginal Prices reached over $11,195 per megawatthour (MWh) in San Diego Gas & Electric's control area and nearly $1,900 per MWh in the SP-15 area. However, administrative price caps were put in place that superseded these prices.

CAISO took the following actions for real-time prices after this event:

  • Real-time prices for hours ending 5:00 p.m. – 6:00 p.m. would reflect the previous hour-ending price
  • A system-wide administrative cap of $250/MWh was set for hours ending 7:00 p.m. – 10:00 p.m.
  • A system-wide administrative cap of $100/MWh was set for hours ending 11:00 pm – 12:00 a.m. as well as hours ending 1:00 a.m. on September 9, 2011
  • San Diego Gas & Electric service area prices remained capped at $100/MWh through 4:00 a.m. on September 9, 2011

The causes of the blackout are currently under investigation by the North American Electric Reliability Corporation and the Federal Energy Regulatory Commission.