LCG Publishes 2024 Annual Outlook for Texas Electricity Market (ERCOT)

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

LCG Publishes 2024 Annual Outlook for Texas Electricity Market (ERCOT)

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

Industry News

California Capsule: Blackouts Hit Some Hospitals

LCG, March 21, 2001Rolling blackouts in California yesterday inconvenienced fewer than half the number of electricity customers affected by outages on Monday, but among those hit by the blackouts were a number of hospitals, police stations and fire houses.

Since 1980, hospitals with at least 100 beds have been considered exempt from selective blackouts because they are regarded as "essential services," as are police and fire facilities. But according to utilities, state regulations require that they include such facilities with other customers subject to blackouts when they have backup generators.

None hospitals were affected by yesterday's blackouts, from north-central California to Long Beach in the south. Critical patient care areas were not affected and no patients were harmed by the outages.

Utilities estimated that about 560,000 customers lost service yesterday between 9:30 a.m. when the California Independent System Operator ordered the rolling blackouts and 2:00 p.m. when the order was lifted. On Monday, around 1.3 million customers had been affected.

Gov. Gray Davis, never at a loss for words unless they are "mea culpa," said Pacific Gas & Electric Co. and Southern California Edison Co. are at least partly to blame for this week's blackouts because they haven't paid their bills to so-called "qualifying facilities."

The governor has convinced himself that the companies are being paid lots of money by their customers and are not passing it on to the firms that produce the power. "It's wrong and irresponsible of the utilities to pocket this money and not pay the generators," Davis said at a news conference in Sacramento yesterday. "They've acted irresponsibly and immorally and it has to stop."

For more than a year, the companies have paid more for electricity than they have been able to charge the customers to whom they delivered it, and are about $14 billion in the hole as a result. Shareholders of the two utilities have seen their investments lose two-thirds of their value, and may be forgiven if they think it is immoral and irresponsible for the state to expect them to subsidize power for its citizens.

But that's just the top of the news from California.

  • California legislators yesterday called on Gov. Davis to sack the president of the California Public Utilities Commission and replace her with someone who is an expert on utilities. "We have no confidence that Loretta Lynch will play a constructive role in solving this energy crisis in the weeks and months ahead," Assembly Republican Leader Bill Campbell said in a letter to the governor. Lynch was trained as a lawyer and has impressive academic credentials, but critics are concerned that she has no business experience and no expertise in energy matters. Campbell said he and other lawmakers are concerned that the PUC "has been unable to perform an adequate assessment of the investor-owned utilities' financial condition."

  • The city of Los Angeles, which has the largest municipal utility in the U.S. and has been immune from California's electricity problems, sued two natural gas companies yesterday, saying they engaged in unfair, unlawful and fraudulent business practices and violated the state's anti-trust laws. The Los Angeles Department of Water and Power does not include gas among the products it offers Los Angelenos, and City Attorney James Hahn charges that Sempra Energy Inc. and El Paso Natural Gas Co. conspired to drive up natural gas prices.
    Hahn, who is running for mayor of Los Angeles, told reporters yesterday that his suit seeks civil penalties, damages and disgorgement of profits. He charged that a conspiracy that included Sempra subsidiary San Diego Gas & Electric Co. "not only led to the price-gouging of all natural gas customers from homeowners to government to industry, but contributed to the current electrical power crisis in California."

  • Davis' plan to get the state's investor-owned utilities some money by buying their transmission assets "are proceeding at an accelerated pace," according to a statement released by the governor's office. The statement quoted New York financial advisor Joseph S. Fichera, who is advising Davis on the negotiations, as saying the talks are moving forward "Contrary to published reports and other rumors."
    Thomas Higgins, a senior vice president of SoCal Ed's parent holding company Edison International Inc, agreed that "talks have accelerated and appear quite productive." PG&E had no comment.

  • PG&E did say it has begun negotiations with qualifying facilities and has offered to pay in advance for future power deliveries. "In an effort to ensure as many (qualifying facilities) as possible return to service and continue generating electricity, PG&E has offered to depart from normal payment terms and prepay (them)," PG&E said in a statement. The utility said the move would permit the small generators to prepay for their gas supplies, and get them back in business quickly. But PG&E hedged its offer, saying it depended on the PUC allowing it to use its revenues in this way.

  • SoCal Ed said yesterday it was still trying to hammer out an agreement with bankers on the utility's defaulted credit lines. "The banks continue to be anxious about the situation in California," said Ted Craver, chief financial officer for parent company Edison International. "They continue to be concerned about getting paid."

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