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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Analysis of Resource Adequacy in ERCOT - July - December 2020

LCG, June 30, 2020 - LCG Consulting just released its analysis of ERCOT for the second half of 2020, July through December.

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Industry News

Enron Invokes India's Federal Guarantee in Dabhol Row

LCG, Feb. 6, 2001Enron Corp. said this morning that it has invoked the sovereign guarantee of the Indian government in its efforts to get paid by the state of Maharashtra or its state electricity board for bills that were due in November and December of last year.

Enron India is principal owner of Dabhol Power Co., a company created to build a giant power plant in Maharashtra state. Under agreements reached at the time the project was developed, the Maharashtra State Electricity Board took a 15 percent stake in Dabhol and planned to expand its ownership to 30 percent.

The Maharashtra State Electricity Board also agreed at the time to tariffs for power produced by the plant. The MSEB is a state-owned utility that supplies electricity to India's most industrialized state, including the city of Bombay.

The MSEB fell behind early in its monthly electric bill to Enron and the U.S. company was able to collect money owed for last April only after Maharashtra state ordered the MSEB to pay in order to forestall Enron and other investors from invoking guarantees.

Now, the MSEB owes Enron 790 million rupees ($17 million U.S.) for November and nearly twice that for December.

That money is owed for power produced by the 826 megawatt "first phase" of Dabhol, and now a 722 megawatt unit of the "second phase" is set to go on-line. The MSEB now says it miscalculated its power needs and no longer intends to expand its ownership. It is also making noises about disavowing promises made to take power from the additions to the plant.

Like electricity boards in all Indian states, the MSEB is an inefficient organization that "loses" about a third of its power somewhere between the power plant and the paying customer. The losses are largely due to outright theft of power, taken from transmission lines with the knowledge of easily bribed local MSEB officials.

Enron's action in invoking India's federal guarantee represents the first such instance of a foreign investor looking to New Delhi for payment, and brings unwelcome attention to the difficulty in dealing with lower levels of government. India has made it plain that it hopes to attract additional foreign investment to its power sector.

Four other power projects in India have been cancelled when their foreign investors pulled out in frustration, citing bureaucratic delays, legal entanglements and outright corruption.

As to the current problem, Enron's invoking the federal guarantee applies only to the November bill. The company has invoked a lower level guarantee by the state of Maharashtra in a first attempt to be paid for December, but the state is expected to ignore that move.

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