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News
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LCG, October 10, 2023 – LCG Consulting (LCG) has released its annual outlook of the ERCOT wholesale electricity market for 2024, based on the most likely weather, market, transmission, and generator conditions.
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LCG, October 10, 2023 – LCG Consulting (LCG) has released its annual outlook of the ERCOT wholesale electricity market for 2024, based on the most likely weather, market, transmission, and generator conditions.
Read more
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Industry News
S&P Explains Response to California's Puny Price Hike
LCG, Jan. 8, 2001Standard & Poor's explained late Friday why it granted the credit ratings of Pacific Gas & Electric Co. and Southern California Edison Co. a reprieve despite rate action by the California Public Utilities Commission considered insufficient to protect the solvency of the two companies. S&P said the fact that the state legislature was in special session to grapple with the problem was the only reason the credit ratings of California's two largest electric utilities were not reduced to the level of junk bonds, a move that would not only have denied tham access to new capital but would have thrown many of their existing bank loans into default.Last Thursday, the CPUC granted the two companies a 90-day one cent per kilowatt-hour rate increase, which translated into a rate hike of 9 percent on residential rates and between 7 percent and 15 percent on commercial and business rates.During four days of hearings, PG&E had tried to make it plain that it needed an immediate rate increase of 26 percent across the board to avoid insolvency within weeks and would be back for more later. SoCal Edison said it needed 30 percent right now to keep it out of bankruptcy court. The regulators lacked the political will to tack $15 onto the monthly electric bill of the average voter and passed the buck to the legislature.It was enough to stave off a junk rating, according S&P electric utility credit analyst Richard Cortright, but he said that could change."While Standard & Poor's is not prepared today to assume that the state assembly will fail, oursurveillance of developments within the legislature will be intense and constant, and a further ratingsdowngrade remains a real possibility. Therefore, the ratings remain on credit watch with negativeimplications," Cortright said."The actions by the California Public Utilities Commission yesterday were manifestly inadequate if the commission's goal, as stated, was to support the utilities' ability to access the capital markets andmaintain themselves as ongoing enterprises," Cortright continued. "The implications of raising rates only a penny when the utilities continue to have to procure power at prices that are between 6 and 10 times as high as the amounts permitted to be recovered for each kilowatt-hour delivered to ratepayers are pretty clear: insolvency is eventually unavoidable."Taking note of CPUC commissioner Carl Wood's remark that the vote for a one cent rate boost was "the epitaph for deregulation," Cortright responded "In the absence of action from any other quarters, it is our opinion that the vote was the epitaph for PG&E and (SoCal Edison). But it is precisely because the CPUC's actions do not constitute the burial shroud that the free-fall of Standard & Poor's ratings was halted at the BBB-minus level." S&P will be keeping a critical eye on the legislature. Cortright said, "in Standard & Poor'sestimation, there is a strong recognition among the legislators, and especially among the leadership, thataction must be taken in very short order if they wish to avoid a bankruptcy."The answer to the immediate crisis lies with re-opening the financial markets to the utilities. It is ourbelief today that the legislature understands this. The trick of course is to translate understanding intoaction, quickly," Cortright concluded.
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UPLAN-NPM
The Locational Marginal Price Model (LMP) Network Power Model
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UPLAN-ACE
Day Ahead and Real Time Market Simulation
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UPLAN-G
The Gas Procurement and Competitive Analysis System
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PLATO
Database of Plants, Loads, Assets, Transmission...
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