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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

Bonneville Sees 250 Percent Rate Hikes

LCG, April 10, 2001Bonneville Power Administration said yesterday that it would have to raise wholesale electricity rates by 250 percent on October 1 unless its customers retail utilities in the Northwest and large industrial customers cut back energy use within the next 60 days.

That is a lot worse than the picture Bonneville painted three months ago, when it said wholesale rates could rise 60 percent on average for the next five years.

"Recent developments in the market now require a first-year increase of 250 percent or more, absent vigorous efforts to reduce demand," said Steve Wright, acting BPA administrator. "This could double the retail rates of many Northwest consumers."

A long-running drought is leaving the region short of electricity this summer and winter, which could pose reliability problems but, longer term, an underlying energy shortage threatens high costs and difficulties in meeting demand for several years until new power plants, power lines and conservation can be brought on line, Bonneville said.

The Eugene Register-Guard said on Sunday that flow in the Columbia River looks more like it does in midsummer that what should be the start of the annual spring runoff. The paper said power production at dams on the Columbia and Snake Rivers has been cut back by about a third.

But the drought isn't the entire story. The Northwest is suffering from the same basic problem that caused California's electric mess an insufficiency of supply in the face of increasing demand. To make matters worse, about a year ago Bonneville signed contracts to sell more power than it has. That forced the federal agency into the volatile wholesale market at a cost of more than $2 billion.

Last May, Bonneville signed contracts to provide utilities, aluminum companies and others with about 3,000 megawatts more power than the agency could lay its hands on even when the rivers were flowing at their normal rates. Officials at Bonneville assumed they could buy inexpensive power on the open market.

Bonneville spokesman Mike Hansen said "people were under the impression that we'd be able to hold rates down. No one predicted what now has happened."

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