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

California Capsule: Davis Eases Stance on Rate Hikes

LCG, April 2, 2001California Gov. Gray Davis appeared over the weekend to move closer to the acceptance of rate hikes as part of the solution to the state's electricity crisis.

Speaking before the California Democratic Party Convention in Anaheim, the governor said "If a rate increase becomes absolutely necessary to keep our lights on and keep our economy strong, you can be sure of one thing from this governor. I'll fight to protect those least able to pay, reward those who conserve most and motivate those who are the biggest guzzlers to cut back."

California's Democrats had planned the weekend as a self-congratulatory extravaganza to celebrate their strength in state politics. The party holds all but one statewide office and has for years dominated both houses of the state legislature. But the energy crisis intervened, and not every Democrat was loyal to the governor.

State Controller Kathleen Connell described Davis' approach to the power problem as "delaying and incremental." Referring to the gasoline shortages in the 1970s, she said "Just ask president Jimmy Carter what happens when you stall and you don't solve the gas-line problem."

Connell added "There will be no excuses for Democrats in this state because we dominate the state government."

Most Democrats at the Anaheim Convention Center were trying to shift the blame for the state energy crisis to Davis' predecessor, Republican Pete Wilson, conveniently forgetting that the state's electric restructuring act was introduced by Democrat co-authors, pushed through the legislature by Democrat state Sen. Steve Peace, and voted for unanimously by both houses of the legislature.

But Republicans were every bit as enthusiastic about deregulation as their Democrat counterparts. Connell warned that continued "finger pointing" would not solve the problem.

There was more, as Californians got ready for baseball season, night games and brightly-lit stadiums.

  • The Federal Energy Regulatory Commission on Friday asked the California Independent System Operator to explain how it arrived at its conclusion that greedy power producers overcharged the state $6.2 billion for electricity.
    "Your submittal included two studies that claim $6.2 billion in overcharges from May 2000 through February 2001," FERC said in a letter to Cal-ISO's legal counsel. "These studies do not include any detailed support for the derivation of this amount." FERC ordered Cal-ISO to provide it by this coming Friday with a step-by-step account of the overcharges, broken down by month, for each of the 10 months.
    FERC also questioned Cal-ISO's charges that the overcharges were related to abuse of "market power." The federal agency asked the ISO to "explain why your study indicates little or no market power during hours of scarcity, but significant amounts of market power during hours of no scarcity."

  • Californians were trying to figure out how the California Public utilities Commission's "tiered" rate structure would affect them. Under a plan proposed by PUC President Loretta Lynch, customers who do not exceed 130 percent of the "baseline" allotment of power would be spared a rate hike. The baselines were established nearly 20 years ago as a means of allowing utilities to charge more for above-average consumption, and they have been recalculated regularly. A baseline represents average use of power within an area.
    Consumer advocates and organizations representing seniors, low-income, and other disadvantaged citizens are wondering how people can cut back when they already use so little electricity. It does not appear from here that they will need to cut back to avoid a rate hike they will need to avoid using 30 percent more electricity than they do now.

  • The Staff of the California Energy Commission recommended approval for two small peaking plants. One would be a 135 megawatt simple-cycle, natural gas-fueled facility in Palm Springs and the other would be a 90 megawatt natural gas powered combustion turbine in San Diego.

  • Cal-ISO declared a Stage 2 power emergency this morning at 8:40 a.m. and said it would be in effect until midnight. According to the agency, operating reserves were expected to fall below 5 percent.

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