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

PG&E: The Once-beloved Utility

LCG, April 9, 2001When we were a boy in the 1930s, everyone in Northern California admired Pacific Gas & Electric Co. Even better, everyone liked PG&E. When the company filed on Friday for protection under Chapter 11 of the U.S. bankruptcy code, it was widely vilified. That wasn't the good old PG&E we knew, admired and liked.

It's a stretch, but PG&E can lay claim to being the oldest electric utility in the United States. The company got part of its start as the San Francisco Gas Co. in 1852. Another part of its start began in the gold fields of the Sierra Nevada a few years later.

Mine owners needed a reliable source of power and looked to harness the water flowing in the region's rivers and through its mining flumes and ditches. A water wheel developed in Nevada City was put to work and soon there was a burgeoning business in hydroelectric energy, tiny by any standards, but getting the job done.

A group of investors acquired control of the hydro facilities and developed more, forming the California Gas & Electric Co.

Back in San Francisco, Father Joseph Neri, a Jesuit affiliated with St. Ignatius College (now University of San Francisco) had experimented with electricity on his own and had developed an arc light in 1871. In 1874, he acquired an early "dynamo" and illuminated the school's bell tower. Father Neri illuminated San Francisco's centennial parade in 1876, attracting more interest in electric power.

San Francisco's California Electric Light Co., incorporated in 1879, was the first power company in the world to have a central generating station for the distribution of electricity to private customers. Every earlier installation had produced power for the sole use of the business or municipality that built it.

In 1877, in Cleveland, Ohio, one George Brush developed a powerful generator, one of which found its way to the founders of California Electric Light in 1878. This generator was installed in Yuba City, north of Sacramento, and attracted enough capital to get the fledgling company off the ground. In 1879, the company built a powerhouse on Market Street in San Francisco.

In 1905, San Francisco Gas Co. merged with California Electric Light Co. and the hydroelectric company came along. The new company was called Pacific Gas & Electric Co. Only one significant change has occurred since, when PG&E acquired Great Western Power Co. in 1930.

Early customers set the tone for those who followed. They were paying a few cents a month to light an electric lamp, where they had had none before. As usage grew, so did the bills, but again the comparison was not with other electric bills but between having electricity and not having it. The good people at the utility delivered a new necessity.

PG&E actually prospered during the Great Depression because it delivered that new necessity and many who would otherwise be unemployed were happy to work for the company. During World War II, the company grew rapidly in response to the demand for power by factories producing the goods of war and the thousands of new Californians who had come to work in them.

The company's popularity continued unabated even when, in partnership with General Electric Co., it built the Vallecitos atomic energy plant in 1957. But the seeds of its unpopularity were planted. There had been since the end of the war a vocal cult that feared and opposed nuclear power. The environmental movement was just getting started. The free speech movement at the University of California legitimized civil disobedience in the eyes of some.

In 1963, these forces combined to defeat an attempt by the company to build a nuclear power plant at Bodega Bay, north of San Francisco, and in 1967 PG&E was forced to shut down its Humboldt Bay nuclear plant in the northwest corner of the state because it had not been built to withstand earthquakes which have not yet occurred.

Through the 1970s and 1980s, protests over the construction of the Diablo Canyon nuclear plant near San Luis Obispo put PG&E thoroughly on the defensive, and the company's management was changing to match the opposition. Gone were the electric power professionals and entrepreneurs to whom the gas and electric customer could relate, replaced by accountants and lawyers.

A fellow with whom we had graduated from high school in 1947 went to work for PG&E rather than to college and made a career out if it, retiring in about 1990, with time out only for the Korean War. He will tell you today that the utility had become by the time he retired a profit-driven machine with little of the familial feeling he had enjoyed for so many years.

But we'll bet the news of PG&E's bankruptcy ruined his weekend.

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