Is CAL-ISO Getting In The Power Plant Business?

Nevada Hydro, the company developing the Lake Elsinore Hyrdoelectric Plant is pressuring the ISO into taking over the future operation of the plant. The ISO is a non-profit organization that has long facilitated transmission of electricity in California but has never run a for-profit generation facility before.

If you're scratching your head right now trying to figure out why this is a good idea (and whom it would benefit), consider the following pull-quote from the North County Times' write-up:

"Some of the scenarios would also have the plant included in the system operator's "transmission access charge," which splits the cost of high-voltage transmission projects among all the entities that use the ISO-controlled grid, proportionate to their size.

The access charge would provide the major source of revenue for the project's investors and would ensure a guaranteed return on their investment, Nevada Hydro spokesman Chris Wysocki said. That charge would be passed on to the state's electricity customers, but Wysocki said that it could turn out to be better than the alternative.

If the ISO doesn't operate the plant, he said, electricity customers could be stuck with even higher bills if the power the hydro plant creates were to be sold on the open market. The owners of the project could wait until electricity demand dictates higher prices to maximize their profits, he said. Nevada Hydro's plan is to sell the project once the proper licenses are granted."

For background on the Lake Elsinore project, see this earlier post.

Grid operator looks at running power plant [North County Times]