An examination of the effect of California’s cap-and-trade program on wholesale electricity prices in the Western Interconnection finds that the CO₂ price is fully captured by California electricity prices, but also by prices at the Mid-Columbia hub in the Pacific Northwest. This occurs because, under California rules, Northwest generators can export carbon-free hydroelectricity to California at premium prices. Copyright © 2016 Elsevier Ltd.
CitationOlson, A., Woo, C. K., Schlag, N., & Ong, A. (2016). What happens in California does not always stay in California: The effect of California’s cap-and-trade program on wholesale electricity prices in the Western Interconnection. The Electricity Journal, 29(7), 18-22.
- Cap-and-trade program
- CO₂ price
- Wholesale electricity prices
- Western Interconnection