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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 Gets SoCal Ed's Transmission

LCG, April 10, 2001California Gov. Gray Davis announced yesterday that he had reached a deal with Southern California Edison Co. for the state to purchase the utility's transmission system for $2.76 billion.

"These were tough negotiations," Davis said, "but they've produced a good, balanced deal." The agreement required SoCal Ed to provide low-cost power to the state for 10 years and to withdraw lawsuits seeking increases in retail rates for electricity.

It is not a done deal. State Senate President Pro Tem John Burton, a San Francisco Democrat, said he will hold "complete hearings, and then some." Assembly Speaker Bob Hertzberg, a Southern California Democrat, said the legislature will begin work on legislation to implement the arrangement, but he wants details, "including costs to the state."

As part of the deal, Davis agreed to allow SoCal Ed to recover at least some if its massive debt from ratepayers. The governor was not specific about the effect on consumer rates if a portion was dedicated to reducing the utility's debt.

"This deal by our panic-stricken governor is going to raise rates enormously," said consumer advocate Harvey Rosenfield. "He acted to protect his political career at the public's expense."

And there was a little more from darkest California.

  • The U.S. Bankruptcy Court for the Northern District of California yesterday approved a handful of second-day motions by Pacific Gas & Electric Co., which had filed on Friday for protection under Chapter 11 of the bankruptcy law.
    The court granted the company authority to continue to use natural gas revenues to secure future gas supplies, aiming at avoiding disruptions for the utility's millions of gas customers. The court also authorized interim use of cash collateral in which bondholders have a beneficial interest, and set deadlines for a final hearing on the use of the cash collateral.
    In what could be a long-playing and contentious dispute, PG&E asked the court to delay for at least 60 days a requirement approved March 27 by the California Public Utilities Commission that the company rewrite its books back to Jan. 1, 1998. The effect of restating the books could make it appear that the company did not suffer losses buying wholesale power at more than it charged retail customers for it. The company said it believes the CPUC change is intended to interfere with the rights of creditors and shareholders to recover the $8.9 billion PG&E says it has undercollected since last summer.
    It was not clear what the state can do with a partial transmission system.

  • As summer approaches, power supplies for California remain insufficient to meet expected demand. Loretta Lynch, president of the CPUC, said "We face the same challenges we did before PG&E filed for bankruptcy," adding that the bankruptcy increased the uncertainty. Ron Low, a spokesman for PG&E disagreed the state's problems are neither more nor less severe as a result of the bankruptcy filing.
    Consumers will notice little or no change. The bankruptcy court will allow the company to operate as usual and will likely prevent any changes to what is perceived as "business as usual."

  • The California Independent System Operator had not yet declared a power emergency at 8:00 a.m. this morning, but was predicting "continued deficiencies in operating reserve." The ISO declared today a "generation no-touch day."

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