CAISO price spreads are expected to rise to $240-270/MWh by 2030, up from $160/MWh in 2025. Spreads will then decline, settling at $90-100/MWh approaching 2050.

In the short-term, load growth across the Western Interconnection is poised to raise peak prices.

In the 2030s, batteries replace retiring natural gas generators as dispatchable generation. Wind and solar capacity grows to meet the state’s carbon targets, causing wholesale prices to decline. But peak prices could fall faster than midday-prices, compressing spreads over the long-term.

With CAISO’s Extended Day-Ahead Market (EDAM) scheduled to go live in May 2026, neighboring Balancing Authorities (BAs) will begin to have a greater impact on California’s wholesale power prices.

Key takeaways

• Load growth from data centers (3.5 GW in California) and manufacturing across the WECC will raise peak prices and push TB4 spreads to $240-270/MWh by 2030.
• TB4 spreads decline through the 2030s as batteries replace retiring natural gas units and offshore wind lowers overnight prices, settling at $90-100/MWh by 2050.
• Solar generators bid at their Renewable Energy Credit (REC) driven marginal cost, depressing midday prices across CAISO. This floor persists through 2050.
• Diablo Canyon, California's last nuclear facility, likely receives its third extension, continuing to operate beyond 2050.

Price spreads rise in the short-term, then fall in the 2030s

Top-bottom four-hour (TB4) power price spreads in Southern California Edison’s (SCE) jurisdiction averaged $160/MWh in 2025. This benchmarks the arbitrage opportunity available to 70% of California’s grid-scale batteries.

Price volatility in CAISO has returned to the averages seen before global natural gas prices spiked in 2022 in the wake of the Ukraine-Russian conflict. This same decline in gas prices has meant around-the-clock (ATC) averages have followed a similar path, falling to $35-40/MWh last year.