June price spike explained

By Staff -- Purchasing, 11/5/1998

The ferc's Staff Report on the Causes of the Pricing Abnormalities in the Midwest during June 1998 lists a combination of causes including:

* Outages in generating, both planned and unplanned, including weather-related damage to generating and transmission.

* Unseasonably hot temperatures, which increased demand to near-record levels.

* Transmission constraints.

* Lack of market information on short-term prices.

* Defaults on power sales, which led to unusual short-term buying.

* Inexperience of some market participants in dealing with the type of market conditions that occurred.

For a PDF file download of the report go to www.ferc.fed.us.

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