The Metcalf Energy Center is a 605 megawatt combined cycle power plant located in Silicon Valley, located in unincorporated Coyote Valley, south of San Jose, California and north of Morgan Hill, California. The power plant is owned by Calpine and powered by natural gas. Some of the power generated by the plant is sent to far away places via Path 15, a major electrical power transmission corridor that is connected to the power plant.
In June 2017, Calpine Corporation notified the California Independent System Operator (CAISO) that unless it was granted reliability-must-run (RMR) status, it intended to take the plant offline at the end of 2017. [1] (Reliability-must-run (RMR) status is a designation that a power plant is essential for the reliability of providing needed power at times of peak demand, and/or to maintain a level of redundancy for when other power generation facilities fail.)
Calpine stated that it was no longer economical to continue to run the Metcalf plant at the currently low wholesale electricity prices; [2] the result of an electricity glut in California.
The glut in wholesale prices resulted from policies which guarantee utilities like Pacific Gas and Electric Company (PG&E), (a regulated monopoly), return on investment for building new power plants, even when they are not needed. The Los Angeles Times explains: [3]
"California has a big — and growing — glut of power, an investigation by the Los Angeles Times has found. The state's power plants are on track to be able to produce at least 21% more electricity than it needs by 2020, based on official estimates. And that doesn't even count the soaring production of electricity by rooftop solar panels that has added to the surplus."
"Utilities are typically guaranteed a rate of return of about 10.5% for the cost of each new plant regardless of need. This creates a major incentive to keep construction going: Utilities can make more money building new plants than by buying and reselling readily available electricity from existing plants run by competitors."
"Independents like Calpine don't have a captive audience of residential customers like regulated utilities do. Instead, they sell their electricity under contract or into the electricity market, and make money only if they can find customers for their power."
A public utility company is an organization that maintains the infrastructure for a public service. Public utilities are subject to forms of public control and regulation ranging from local community-based groups to statewide government monopolies.
In economic terms, electricity is a consumable energy resource capable of being bought, sold, and traded. An electricity market, also power exchange or PX, is a system enabling purchases, through bids to buy; sales, through offers to sell. Bids and offers use supply and demand principles to set the price. Long-term contracts are similar to power purchase agreements and generally considered private bi-lateral transactions between counterparties.
The 2000–01 California electricity crisis, also known as the Western U.S. energy crisis of 2000 and 2001, was a situation in which the U.S. state of California had a shortage of electricity supply caused by market manipulations and capped retail electricity prices. The state suffered from multiple large-scale blackouts, one of the state's largest energy companies collapsed, and the economic fall-out greatly harmed Governor Gray Davis's standing.
The Diablo Canyon Power Plant is an electricity-generating nuclear power plant near Avila Beach in San Luis Obispo County, California. Since the permanent shutdown of the San Onofre Nuclear Generating Station in 2013, Diablo Canyon has been the only operational nuclear plant, and the largest single power station, in that state. It was the subject of controversy and protests during its construction, with nearly two thousand civil disobedience arrests in a two-week period in 1981.
A regional transmission organization (RTO) in the United States is an electric power transmission system operator (TSO) that coordinates, controls, and monitors a multi-state electric grid. The transfer of electricity between states is considered interstate commerce, and electric grids spanning multiple states are therefore regulated by the Federal Energy Regulatory Commission (FERC). The voluntary creation of RTOs was initiated by FERC Order No. 2000, issued on December 20, 1999. The purpose of the RTO is to promote economic efficiency, reliability, and non-discriminatory practices while reducing government oversight.
Demand response is a change in the power consumption of an electric utility customer to better match the demand for power with the supply. Until recentlyrecently electric energy could not be easily stored, so utilities have traditionally matched demand and supply by throttling the production rate of their power plants, taking generating units on or off line, or importing power from other utilities. There are limits to what can be achieved on the supply side, because some generating units can take a long time to come up to full power, some units may be very expensive to operate, and demand can at times be greater than the capacity of all the available power plants put together. Demand response seeks to adjust the demand for power instead of adjusting the supply.
The Moss Landing Power Plant is a natural gas powered electricity generation plant located in Moss Landing, California, United States, at the midpoint of Monterey Bay. Its large stacks are landmarks, visible throughout the Monterey Bay Area. The plant is owned and operated by Houston-based Dynegy and currently has a generation capacity of 1020 MW (net) from its two combined cycle generation units. It was once the largest power plant in the state of California, with a generation capacity of 2560 MW, before its two large supercritical steam units were retired in 2016.
Calpine Corporation is the largest generator of electricity from natural gas and geothermal resources in the United States, with operations in competitive power markets.
The Texas electricity market is deregulated, meaning that there is competition in the generation and distribution of electricity. Power generators in the Texas Interconnection, managed by the Electric Reliability Council of Texas, participate in an energy-only electricity market and are compensated only for the electricity they produce. The wholesale generation market was deregulated in 1995 and the distribution market in 1999, with Texas Senate Bill 7. This replaced the prior system in which power was generated and consumed locally by the same utility with one in which retail providers contracted with generators across the state.
Silicon Valley Power (SVP) is a not-for-profit municipal electric utility owned and operated by the City of Santa Clara, California, USA. SVP provides electricity service to approximately 55,116 residential and business customers, including large corporations such as Intel, Applied Materials, Owens Corning and NVIDIA. SVP also owns and maintains a dark fiber network named SVP Fiber Enterprise.
Community Choice Aggregation (CCA), also known as Community Choice Energy, municipal aggregation, governmental aggregation, electricity aggregation, and community aggregation, is an alternative to the investor owned utility energy supply system in which local entities in the United States aggregate the buying power of individual customers within a defined jurisdiction in order to secure alternative energy supply contracts. The CCA chooses the power generation source on behalf of the consumers.
Electricity pricing can vary widely by country or by locality within a country. Electricity prices are dependent on many factors, such as the price of power generation, government taxes or subsidies, CO
2 taxes, local weather patterns, transmission and distribution infrastructure, and multi-tiered industry regulation. The pricing or tariffs can also differ depending on the customer-base, typically by residential, commercial, and industrial connections.
ISO New England Inc. (ISO-NE) is an independent, non-profit Regional Transmission Organization (RTO), headquartered in Holyoke, Massachusetts, serving Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.
The electricity sector of the United States includes a large array of stakeholders that provide services through electricity generation, transmission, distribution and marketing for industrial, commercial, public and residential customers. It also includes many public institutions that regulate the sector. In 1996, there were 3,195 electric utilities in the United States, of which fewer than 1,000 were engaged in power generation. This leaves a large number of mostly smaller utilities engaged only in power distribution. There were also 65 power marketers. Of all utilities, 2,020 were publicly owned, 932 were rural electric cooperatives, and 243 were investor-owned utilities. The electricity transmission network is controlled by Independent System Operators or Regional Transmission Organizations, which are not-for-profit organizations that are obliged to provide indiscriminate access to various suppliers in order to promote competition.
Energy in California is a major area of the economy of California. California is the state with the largest population and the largest economy in the United States. However, it is second in energy consumption after Texas. As of 2018, per capita consumption was the fourth-lowest in the United States partially because of the mild climate and energy efficiency programs.
Champion Energy Services, LLC is a retail electricity provider (REP) based in Houston, Texas. Champion Energy currently serves residential, governmental, commercial and industrial customers in deregulated electric energy markets in Texas, Illinois, Ohio, Pennsylvania, New Jersey and New York; governmental, commercial and industrial customers in Delaware, Maryland and Washington, D.C.; and natural gas customers in Illinois. The company is a subsidiary of Calpine.
The California Independent System Operator (CAISO) is a non-profit Independent System Operator (ISO) serving California. It oversees the operation of California's bulk electric power system, transmission lines, and electricity market generated and transmitted by its member utilities. The primary stated mission of CAISO is to "operate the grid reliably and efficiently, provide fair and open transmission access, promote environmental stewardship, and facilitate effective markets and promote infrastructure development." The CAISO is one of the largest ISOs in the world, delivering 300 million megawatt-hours of electricity each year and managing about 80% of California's electric flow.
The Tehachapi Energy Storage Project (TSP) is a 8MW/32MWh lithium-ion battery-based grid energy storage system at the Monolith Substation of Southern California Edison (SCE) in Tehachapi, California, sufficient to power between 1,600 and 2,400 homes for four hours. At the time of commissioning in 2014, it was the largest lithium-ion battery system operating in North America and one of the largest in the world. TSP is considered to be a modern-day energy storage pioneer with significant accomplishments that have proven the viability of utility-scale energy storage using lithium-ion technology. While originally envisioned as a research and development project, TSP operated as a distribution-level resource for SCE and for calendar year 2020, SCE reported that TSP operated in the wholesale energy market with revenue exceeding operating and maintenance costs. In 2021, SCE began the decommissioning of TSP, which was followed by formal decommissioning by state regulators in 2022.
Load pocket is an area of electric grid that has limited ability to import electricity due to either very high concentration of demand or insufficient transmission capabilities and therefore cannot be entirely provided with power without participation of local electricity generation providers. Typical load pocket includes a major city. Load pocket's existence usually indicates difficulties with building of either new generation or new transmission, or both due to the area constraints or political pressure and despite the pocket being an attractive place for investment. The load pockets represent a problem for the deregulated electricity markets, as in the absence of regulation the captive customers are forced to accept the prices set by the local providers.
Calpine in June told CAISO that it intends to take the Metcalf plant offline at the end of this year.
"Prevailing electricity market prices will not support continued operation of Metcalf," Smith stated.
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Coordinates: 37°13′14″N121°44′45″W / 37.2206°N 121.7457°W
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