The Blackout Trade: How a Power Market Went Dark in California
- Traders lost out on profits when transactions were halted
- Cal ISO said the bids were “detrimentally” affecting the grid
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By Aug. 16, heat was smothering California, and alarms were going off in the city of Folsom. There, the operators of the state’s vast electrical grid were facing a troubling question: Were traders making the burgeoning power crisis worse?
What the grid operator did amid the chaos on that sweltering Sunday stunned the world of power trading. In an unprecedented move, it pulled the plug on an obscure corner of the electricity market where speculators can tip the balance of supply and demand.