NorthRenew Energy's Mesquite Sky Wind Project Commences Construction

LCG, January 21, 2021-–NorthRenew Energy (“NorthRenew”) announced today that Clearway Energy Group (“Clearway”) achieved construction commencement on the Mesquite Sky Wind Project, f/k/a Baird North Wind Project (“Mesquite Sky”), initially developed by NorthRenew and sold to Clearway in 2019. Following the sale in 2019, NorthRenew continued to assist Clearway with final development and pre-construction services.

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Minnesota Power Announces Vision for 100 Percent Carbon-Free Energy by 2050

LCG, January 13, 2021--Minnesota Power, an ALLETE company, yesterday announced its vision to deliver 100 percent carbon-free energy to customers by 2050.

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Industry News

FERC Orders Changes, Dumps Power Exchange

LCG, Nov. 2, 2000--The Federal Energy Regulatory Commission said yesterday that California's electricity markets required an overhaul if the blackouts that threatened the state all summer weren't to become a reality next summer.

Following a day-long investigation into the mechanism of California's wholesale power market, FERC votes 4-0 to institute changes that would go into effect in December following a period for public comment.

One of the most significant changes recommended by FERC would eliminate the requirement that the state's three investor-owned utilities buy and sell power only through the California Power Exchange. That mandate, imposed by AB 1890, the state's electric restructuring law passed in 1996, prevented Pacific Gas & Electric Co., Southern California Edison Co. and San Diego Gas & Electric Co. from entering into contracts to replace capacity lost when they were forced to sell off non-nuclear power plants.

That requirement forced the utilities to pay current market prices for power they were required to deliver to their distribution customers. In San Diego, those prices were passed along to customers, creating a firestorm of protests from consumers who saw their electric bills more than double. PG&E and SoCal Ed, unable to pass on the higher costs, accrued more than $2 billion each in uncollected power costs.

Under FERC's planned changes, the three utilities would be allowed to manage risk by entering into long- and intermediate-term power supply contracts. That change alone would require significant changes in the current power auction process.

FERC also showed little faith in California's regulatory oversight and said it plans to set up panels of its own to keep tabs on the Power Exchange and the California Independent System Operator.

The federal agency agreed that prices charged by generators this past summer seemed "unjust and unreasonable," but concluded that there was no evidence that abuses of market power took place. In response to populist demands that independent power producers -- the companies that bought the power plant sold by the utilities -- be forced to return so-called "overcharges," FERC said no dice.

FERC Commissioner James Hoecker chided the activist groups, "Ideally, some people would want us to round up the bad guys who manipulated this market without restraint, without conscience, and order disgorgement of their ill-gotten gains," he said. "It's not as simple as all that. "

FERC's plan would replace all of the recently imposed price cap schemes with a "soft" limit of $150 per megawatt-hour. The plan would allow prices above the cap to be charged, but those prices would not set the market price for other trades. That would be designed to eliminate the "bidding up" effect of the current auction market.

The investigation also focused on the basic problem of supply and demand, an equation economists have considered basic for more than two hundred years. FERC's plan would ease environmental restriction on construction of new power plants.

Commissioner Curtis Hebert objected to any price caps that might deter investment in new generation. He recognized that high prices are a problem right now, but said that an unreliable transmission system and insufficient capacity would be worse.

FERC plans to stick around for a spell. It will hold another meeting a week from today to take comments on its proposals and gave utilities and other members of the electric industry until November 22 to present their views.

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