But suppliers apparently found ways to avoid the tighter cap. At the same time, sales through the ISO's real-time market fell to a trickle. Part of this surge might be explained by a sharp rise in the cost of natural gas, a major power-plant fuel. As rising fuel costs pushed up generating costs, producers had an added incentive for avoiding the California price caps, say some observers. Several state and federal investigations are looking for evidence of illegal manipulation in the skyrocketing prices for natural gas and electricity.
Much electricity is sent out of state under perfectly proper, long-term arrangements.
Critics of that FERC soft cap say it was too generous in its calculations of production costs and far too limited in its scope. The cap only kicked in during a Stage 3 alert, when supplies were so tight that rolling blackouts were imminent. Some state officials and others argue that the FERC should be ordering billions of dollars in refunds for prices charged over the past year. The price-control feature of the new FERC plan covers more hours than the previous one but will still be restricted to times of relatively tight supply. Critics say controls should be in effect during all hours, since prices have often been high around the clock.