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California and the West | IN BRIEF / ENERGY

Request to Raise Cap on Electricity Prices Is OKd

January 18, 2006|Marc Lifsher

Federal energy regulators have approved a request from California grid operators to boost the cap on prices paid for last-minute electricity supplies needed to prevent blackouts.

The California Independent Systems Operator, which operates most of the state's power grid, sought the hike to $400 from $250 per megawatt-hour to motivate electricity generators to keep power plants available to meet peak summer afternoon demands.

The 60% increase was merited because of a quadrupling of the cost of natural gas -- the fuel used to run most California power plants -- since the caps were first imposed in 2002 at the end of a two-year energy crisis, Cal-ISO said.

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Marc Lifsher

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