Transmission fees fall, so do reserves

It's hot, hot, hot in Southern California and the heat wave could test the reliability of California's grid--at the same time as the ISO is dropping transmission prices.

The California Independent System Operator, which manages most of the state's power grid, on Wednesday said it would reduce its transmission charges by about 15% next year after cost-cutting measures that would shrink its workforce by almost 16%.

Separately, Cal-ISO warned that a heat wave in much of the state could cause electricity reserves to fall below 7%, triggering a so-called Stage One alert. Cal-ISO urged conservation but said that it expected to have enough power to meet demand.

As it faces a summer of potential electricity problems, particularly in Southern California, Cal-ISO is working to lower operating costs so that it can reduce its grid management charge on electricity moving over its wires.

"The California ISO must mature from a start-up organization … into a world-class organization that is well-positioned to tackle transmission infrastructure challenges in a more timely and effective manner," Chief Executive Yakout Mansour said.

Cal-ISO said it would lower its grid management charge to 73 cents a megawatt-hour in 2006, down from the current 85 cents. The not-for-profit agency said the charge should fall to about 60 cents by 2010.