Federal Government uses UPLAN model to examine price volatility in ERCOT

LCG, October 11, 2022--The U.S. Energy Information Administration, or EIA, released its latest supplement to the Short-Term Energy Outlook (STEO) in the Texas market, assessing various possible scenarios using LCG’s UPLAN NPM model, with a special focus on the effects on wholesale power prices and market conditions.

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Michigan Governor Supports Reopening Palisades Nuclear Facility

LCG, September 16, 2022--The Governor of Michigan last week sent a letter to the U.S. Department of Energy (DOE) in support of Holtec International’s application for a federal grant under the Civil Nuclear Credit (CNC) program to save the Palisades Nuclear Facility in Southwest Michigan. The federal grant could result in restarting the baseload, carbon-free, nuclear power plant.

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Industry News

California Muni Adds Capacity to Keep Rates Low

LCG, Dec. 14, 2000--Not everybody in California is suffering from the insufficiency of electric power in the state. The City of Redding plans to add 54 megawatts of generation to the city power plant, boosting its capacity by 50 percent, and paying for the improvement with "other people's money."

The Redding Record-Searchlight, a local daily, reported yesterday that the City Council had unanimously approved the $41 million addition to the municipal power plant.

The city's electric department will install a new 43 megawatt natural gas-fueled turbine and a heat recovery steam generator that will use the turbine's exhaust to boost production from an existing steam turbine by 11 megawatts.

Throughout California's six-month power shortage, Redding and other municipalities that own generation have been called upon by the California Independent System Operator to run their plants full time to provide the thin margin of reserve power that has kept the state's electric transmission system from collapsing.

Within limitations imposed by a series of price caps, much of that power went for top dollar on the state's spot market. Redding officials say that at least two-thirds of the cost of the plant addition will be paid for by revenues generated by the power sales.

"We're essentially going to build this plant with other people's money," Redding Vice Mayor Pat Kight told the Record-Searchlight. "It's not costing the city anything and it guarantees low rates," he said. "If we end up selling more power with this plant, that's just a plus."

When California restructured its electric industry, the City of Redding was faced with staggering potential stranded costs exceeding $200 million -- a lot of money for a mid-sized town located 200 miles north of San Francisco.

To pay down the debt, the city imposed a 23 percent rate hike on its citizens, boosting their electricity costs from about 8 cents per kilowatt-hour to around 10 cents. That surcharge was to last until 2004, but the power sales that will pay for the plant addition have also enabled Redding to accelerate the paydown of its indebtedness. The surcharge is now scheduled to vanish in 2002, two years ahead of schedule.

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