California nuclear shutdown offset lower natgas prices in 2012
HOUSTON, April 29
HOUSTON, April 29 (Reuters) - Wholesale power prices per megawatt-hour in California dipped just 2 percent last year, barely reflecting a 30 percent drop in average natural gas prices, as the absence of two Southern California nuclear units, less hydropower and higher demand kept prices up, the state electric grid agency said in a report on Monday.
The average wholesale cost in California's $8.4 billion power market last year was $35.69 per megawatt-hour, down 2.2 percent from $36.48 in 2011.
However, the 2012 price was actually much higher than that of 2011, if gas prices were assumed to have been equal both years. California wholesale electric prices jumped 28 percent in 2012 to about $42 per MWh, from $33 MWh in the prior year, said the annual report from the ISO's Department of Market Monitoring.
"We saw higher average and peak summer loads, lower in-state hydroelectric generation, outages of 2,000 MW at the (San Onofre nuclear station) and increased congestion within the ISO," said Keith Collins, a manager with the ISO's market monitor. "All these factors had the effect of increasing electric prices."
The 2,150-megawatt San Onofre nuclear station, halfway between Los Angeles and San Diego, has been shut since January 2012 following discovery of a serious problem with accelerated degradation of tubes in the units' new steam generators.
Operator Southern California Edison, a unit of Edison International, has requested that the U.S. Nuclear Regulatory Commission amend the San Onofre Unit 2 license so it can restart this summer at a reduced operating level of about 750 MW.
The reactor can only restart if the NRC deems the unit can operate safely.
Loss of San Onofre's output has strained southern California's power grid and the ISO has said it is planning for a second summer without any of the plant's output.
Power consumption last year in California rose 2.9 percent to 234,900 gigawatt-hours from 2011, the highest level since 2008, due to warmer weather and a recovering economy, the report said.