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Sharp Power-Price Rise Hits Texas

Rebecca Smith, Wall Street Journal
Wholesale power prices in Texas have surged to new heights, confounding market officials and worrying regulators who see early signs that the situation could destabilize the state’s deregulated electricity markets.

The spikes in wholesale power prices — ominous and so far unexplained — could take a big toll on both power providers and electricity customers if they persist. The state’s utility commission held an emergency meeting Thursday, “which shows the level of concern,” said commission spokesman Terry Hadley.

… The situation will eventually cost consumers “tens of millions of dollars,” though it may take weeks to show up in utility bills, according to Dan Jones, the state’s independent market monitor.
(30 June 2008)

Texas: Electricity price flies off the grid

Tom Fowler, Houston Chronicle
… The price of electricity already was rising toward records because of climbing natural gas prices. Now it’s getting an extra boost from unexpected spikes in the wholesale markets where electricity is bought and sold in bulk.

For several days this month and in April, the price of power briefly spiked in the so-called balancing market where the state’s grid operator buys electricity at 15-minute intervals to keep supply and demand in balance.

Those prices didn’t show up directly on any homeowners’ bills, but they may have helped push two smaller electric retailers out of business, dumping almost 25,000 customers back into the market.
(31 May 2008)

Already Stunned by Gas Prices, Shockingly High Electricity Prices May Await Americans This Summer

Energy Tech Stocks
Americans may pay a lot more for electricity this summer, federal energy officials and the spot power market indicate. Worst hit could be the Northeast, especially the area from Boston to New York City, where forward prices from the InterContinental Exchange for July-August 2008 have been running up to 75% and higher over year-ago levels.

While higher forward prices aren’t a guarantee of higher actual prices this summer, “Wholesale electric prices are likely to be considerably higher than they were a year ago,” America’s Federal Energy Regulatory Commission (FERC) warned last month. FERC said this year’s higher price for natural gas, the most frequently used fuel for peak power generation, is the main reason why. On Monday Raymond James & Associates, the investment banking firm, raised its forecast for summer natural gas prices by 20%, citing colder weather, low imports of liquefied natural gas (LNG), and ongoing infrastructure repairs as reasons why it anticipates a 200 billion cubic foot (Bcf) year-over-year storage deficit by July.
(4 June 2008)

Texas wind farms choked off from grid due to insufficient power lines

Stephen Foley, The Independent
Thousands of wind turbines in the US are sitting idle or failing to meet their full generating capacity because of a shortage of power lines able to transmit their electricity to the rest of the grid.

The issue of transmission capacity will be high up the agenda as 10,000 wind power industry executives descend this week on Houston, Texas, where the shortage of power lines is hampering the state’s alternative energy plans. The problem is particularly acute in Texas because of the speed with which it has grown its wind power industry, two years ago surpassing California as the state with the most capacity. The solutions devised in Texas could form a model for the future of the industry in the US and elsewhere, as energy companies look beyond fossil fuels for cheaper and greener sources of power.
(3 Jun 2008)

Indonesia hospitals unprepared for blackouts

Yuli Tri Suwarni and Suherjoko, Jakarta Post
Hospitals and the Indonesian Red Cross in Bandung said power cuts disrupted operations and that they were not given sufficient warning.

The staff were not prepared for the five-hour power cuts which were implemented twice this week, Hasan Sadikin Hospital director Cissy Rachiana Prawira said. With 700 beds, the facility is West Java’s largest hospital.

“Generators can’t be switched on in an instant — it needs preparation and we need to decide which areas get priority,” she said on Saturday.

“What if we had a power cut in the middle of a surgical operation,” Cissy said, adding that it could be fatal.

… Bandung is one of many areas hit by an increasing number of power cuts over the last few years. The government announced that the Java-Bali power grid, with a capacity of 15,000 megawatts, falls short of the area’s required 16,251 MW, at peak times.

… Semarang Consumer Protection Institute director Ngargono said, however, it would be difficult for consumers to sue PLN unless there were three power cuts a day, in line with regulations.

“What occurred this week was only one power cut a day,” he said.
(1 June 2008)
Contributor Steve Voetsch writes:
Blackouts are a problem creeping into more and more countries.

My last stay (1 month) in Jakarta in Aug-Sept. 07, saw blackouts, from 10 minutes to 4 hours, occurring several times a week. This far exceeded my experiences in prior years.

Vermont: The Electricity Grid Is In Danger

Moshe Braner, Vermont Peak Oil
An emerging issue around the world and perhaps here soon is that people are switching to electric heat in response to higher heating fuel prices or actual shortages. An overload of the grid leads to “load shedding” or a complete shutdown. Rolling blackouts are the daily fare in many countries already (South Africa, Zimbabwe, Nigeria, China, India, Albania, Argentina, Tajikistan, etc etc). Lack of reliable electricity already has had devastating consequences to the economy in those countries. E.g., in South Africa many mines and coal-to-liquid fuel plants had to shut down, inoperable traffic lights snarl traffic, farmers cannot irrigate their fields nor ventilate stored harvests, and dairy farmers cannot milk their cows.

Here in Vermont the current fixed low price for electricity is actually no more expensive (per delivered BTU) than the current prices of propane and heating oil (but not natural gas, yet). Check out the state’s fuel price report – the per-btu chart is in the PDF report linked from there. Also, while many are pondering how to afford a fuel delivery, everybody can “buy” electricity on credit, and are not quickly disconnected if they put off paying the bill. If too many people plug in electric heaters during a cold snap, this may cause a bigger problem. If blackouts result, most people would lose their heating altogether: only those with wood stoves or generators would retain heating.

Since I expect that the electricity prices will double (or worse) when the contracts with Hydro Quebec and the nuke plant expire, a possible proactive policy route is to accelerate the transition to higher electric rates, even before the contracts expire.
(26 January 2008)
Contributor wrote:
Back in January I wrote this warning to Vermonters that the electricity grid is in danger. Recently I’ve been beating this drum harder, since the prices of other heating fuels keeps rising. This is an issue for all of New England, as it is one grid, and relies heavily on heating oil (and on propane in the rural areas).