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

Is Fifteen Bucks a Month Too Much for Californians?

LCG, Dec. 29, 2000California's two largest electric utilities and two of the largest in the nation for that matter ended two days of talks with their state Public Utilities Commission not a lot closer to the rate increases they need to keep buying power for their customers.

Pacific Gas & Electric Co., which serves 4.5 million customers in a territory with a population of 13 million, want a 26 percent overall rate increase to help it pay down its obligation to power producers of close to $5 billion. That size rate hike would cost its typical residential customer a paltry $11 to $12 per month.

Southern California Edison Co., with 4.2 million customers in an area with a population of 11 million, would like a 30 percent rate increase to pay off it's indebtedness to the powerhouse owners, a sum now close to $4 billion. Southern California householders would have to cough up an extra $15 a month.

The utilities need the rate increases right now, and this should come as no surprise to the regulators and politicians feigning astonishment at the requests. Both companies have been pleading for months that they need to be paid for the power they are delivering almost gratis to their customers.

If the companies don't get their money, the lights could go out all over the state. Tom Higgins, a senior vice president of SoCal Edison put it succinctly: "Commercial lenders won't continue to lend money to procure electricity unless they have reasonable assurances that the state policy is that they'll have to opportunity to get their money back," he said.

On December 21, the CPUC agreed that "electricity rates must rise," and set up the meetings with the two utilities for Wednesday and yesterday. At the end of yesterday's meeting, the commission said the meetings might extend into today because "a lot of people have asked to be heard."

A big problem with the Public Utilities Commission and the California Energy Commission is that they take time to listen to everybody who wants to be heard. Then, more often than not, they pay those self-anointed "stakeholders" for their "expert testimony."

Also, the regulators know in advance what they are going to hear from the populists. Here's an example from Harvey Rosenfield, the Southern California who a few years ago thought he could roll back insurance rates: "They created this mess and they need to solve it themselves," he said of the utilities yesterday. Rosenfield likes to talk like a stevedore.

Californians themselves have been slow to react to the power crisis, except in the San Diego area where it hit them in the pocketbook with electric bills that more than doubled. Their utility, San Diego Gas & Electric Co. became eligible early this year to emerge from under the statewide electric rate freeze that forces utilities to charge a retail electricity price that's 10 percent below 1997 levels. SDG&E's residential customers saw their monthly bills jump from around $55 in May to more than $100 in June, and keep on climbing.

To the rest of California, $15 should look positively benign.

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