AEP Will Proceed with North Central Wind Projects Despite Texas Commission Denying Approval

LCG, July 8, 2020--American Electric Power (AEP) announced last Thursday that, following the PUC of Texas not approving AEP subsidiary Southwestern Electric Power Co.'s (SWEPCO) plan to add 309 MW of wind energy to serve Texas customers, AEP will proceed to acquire the entire planned 1,485 MW of North Central wind projects.

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JEA Board Approves Transaction with FPL to Close 848-MW Coal Unit in Georgia

LCG, June 30, 2020--The JEA Board of Directors in a special meeting last Friday unanimously approved a transaction that will result in closing an 848-MW unit at Plant Scherer and entering into a 20-year purchase power agreement (PPA) with Florida Power & Light Company (FPL).

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Industry News

Wall Street Cautious about California Utilities

LCG, Sept. 20, 2000News of the high price of power on the California spot market has reached Wall Street with the result that two major investment advisors have counseled a cautious approach to the debt securities of the state's three investor-owned electric utilities.

Both Standard & Poor's and Fitch Investors Service have downgraded their ratings outlook for the companies Fitch for Pacific Gas & Electric Co., Southern California Edison Co. and San Diego Gas & Electric Co. and S&P for PG&E and SoCal Ed.

Fitch laid the blame on "high wholesale power costs and uncertain recovery of these expenses under existing regulatory structures." S&P largely concurred, but said SDG&E has "sufficient financial flexibility and credit strength to withstand pressure on its working capital."

As a result of electric industry restructuring in California, the state's three big utilities have sold most of their power plants, and now must purchase power from the California power Exchange for delivery, without markup, to their retail distribution customers.

In San Diego, where the utility had paid off its stranded costs and prices were no longer frozen, SDG&E simply passed along soaring electricity prices to its customers, who saw their electric bills double and almost triple in some cases. The hue and cry that provoked caused California politicians to place an artificial cap on the price SDG&E can charge for power, even if it has to pay more.

The other two utilities are not yet able to pass the cost of power purchases through to their customers and must pay the same prices for power as SDG&E at Cal-PX and resell the power to their retail customers for prices frozen by the restructuring law at 1995 levels.

S&P thinks that the politicians may not be through meddling. The state "is in a desperate search for an immediate fix to the pricing crisis, and a rate freeze of some sort for an indeterminate period of time is likely," the service said.

What California needs is more power plants, and meddling with power prices will deter their being built.

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