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Offshore Wind Projects Receive Boost from Massachusetts and Biden Administration

LCG, March 31, 2021--The Governor of Massachusetts signed legislation last Friday that authorizes the state to direct utilities to purchase an additional 2,400 MW of offshore wind energy by 2027.

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NV Energy's Greenlink Nevada Transmission Project Approved by PUCN

LCG, March 25, 2021--The Public Utilities Commission of Nevada (PUCN) on Monday approved proceeding with NV Energy's Greenlink Nevada transmission and renewable energy initiative. NV Energy's planned investment in Greenlink is over $2.5 billion.

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Industry News

California Capsule: ISO Now Says it Overpaid by $6.3 Billion

LCG, March 23, 2001The California Independent System Operator, which on Wednesday claimed it had been overcharged $5.5 billion for electricity, now says the figure is $6.3 billion. The villainous power producers accused of the price gouging say the amount doesn't matter because it's all a fairy tale anyway.

The ISO, which conducted a study to prove its point, presented its findings yesterday to the Federal Energy Regulatory Commission and used the $6.3 billion figure to encourage the federal agency to be more aggressive in helping California out of its power mess.

The Bush administration has said repeatedly that California's power situation is a state problem but should be prevented from spreading to other states.

Gary Stern, director of market monitoring and analysis with Southern California Edison Co., pointed out that the ISO study charges that the independent power producers connived to do two things that pushed up wholesale power prices: They shut down power plants when they could have been producing power, creating an artificial shortage, and they bid power into the market at prices so high they were not accepted.

Stern also reads the financial pages, which have reported record profits for the parent companies of the independent power producers, often attributing the good news to a "robust" power market in California. "If these guys have such high costs," Stern asked, "how come they're making so much money?"

Despite the generally bellicose rhetoric, Cal-ISO yesterday backed off from referring to the $6.3 billion as "overcharges." Instead, the agency now says the sum represents prices "beyond what we would think would be reasonable in a competitive market." When asked if he thought California had been cheated by the power producers, Cal-ISO general counsel Charles Robinson said "I think it's way too early to draw that conclusion."

It appears that Cal-ISO is speaking bigly and carrying a soft stick. But there is other news.

  • Jan Smutny-Jones, head of a trade group representing some independent power producers, is tired of Cal-ISO's rhetoric and said he looks forward to FERC dealing with its charges. "Until then, what seems increasingly clear, is that the ISO's real agenda is to get out of paying for power it has already purchased and used by reneging on its obligations and changing the rules after the race is over," he said. "This latest attempt by the ISO to poison the atmosphere against the generators and use them as scapegoats is clearly more about politics than trying to solve the problem and keep the lights on in California."
    Smutny-Jones pointed out that his members have began offering to sell power at substantially lower long-term contract rates since last summer, but state regulators turned thumbs down on the proposals.

  • Duke Energy Corp. spokesman Tom Williams denied that there has been any profiteering going on in his company's California operations. "This is just another allegation that doesn't jibe with the facts," he said. "There has been investigation upon investigation upon investigation, but we haven't overcharged anyone at all." Duke was one of several companies ordered by FERC to refund a total of $124 million in alleged overcharges for sales in January or February, or justify the prices charged. Duke said it will justify its prices, but asked how it can refund money it hasn't been paid.

  • Dynegy Inc., another of the power producers ordered to make a refund or justify its prices, said yesterday it would submit a response to FERC today, and would not only tell FERC how its prices were justified but what was wrong with the methods used by the federal agency to arrive at its conclusions that prices were too high in the first place. Dynegy said FERC's data on natural gas prices and the cost of nitrogen oxide credits was inaccurate, for one thing, and its assumption that a power producer should recover only its variable costs (fuel, labor and maintenance) is unreasonable.

  • Bob Glynn, chairman, chief executive and president of PG&E Corp., sent a letter yesterday to California Gov. Gray Davis, saying "Governor, I take strong exception to your characterization of this company's actions as irresponsible and immoral." Davis said that an more when he was playing to the populace on Tuesday, charging that PG&E and SoCal Ed had failed to pay so-called "qualifying facilities" for power, forcing them to shut down. "I believe strongly it is wrong and irresponsible for utilities to pocket and withhold money designed to compensate QFs," the governor said. "That's irresponsible, it's immoral and it has to stop."
    "Your implication that we are pocketing money and not paying QFs is flat-out wrong. We have been paying the qualifying facilities the portion of their charges provided for in our rates, on time, on a continuing basis, and we have no intention to cease doing so," Glynn wrote.
    "Our inability to pay them more reflects no ill will or improper action on our part, but a failure by California's energy policymakers to provide electric rates which cover the full cost of electricity," Glynn explained to a deaf governor. Steve Maviglio, the governor's press secretary, said Davis "stands by his statements."

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