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: Enron Must Keep Serving Universities

LCG, April 12, 2001A federal judge yesterday ordered Enron Corp. to resume electric service to California's higher education systems. Enron, which had on Feb. 25, 1998 triumphantly announced signing up the nine-campus University of California and the California State University's 23 campuses to four-year electric service contracts had wanted to slough the contracts off to the schools' original utilities so the power could be sold for more money to other customers.

Enron Energy Systems agreed in 1998 to provide electricity to the university systems for 5 percent less than the price cap set by California's electric restructuring law, beginning March 31,1998. In February of this year, Enron announced unilaterally, even though the contracts still had more than a year to run, that it had "returned" the universities to Pacific Gas & Electric Co. and Southern California Edison Co.

Then Enron brokered sales of the same electricity on the spot market, at much higher prices, according to sources in San Francisco.

U.S. District Judge Phyllis Hamilton issued an injunction against Enron abandoning the contracts, saying the language of the contracts does not give Enron "the right to return the university systems to the utilities." She noted that the universities had also bought protection from the risks of utility service when they chose Enron as power supplier.

Enron offered to guarantee the low rates for the duration of the contracts but that wasn't good enough for the universities, which said being served by the utilities would expose them to the risk of blackouts. They also said loss of renewal options could cost them as much as $297 million over 10 years.

California Attorney General Bill Lockyer said Enron was costing the state $12 million a month by refusing to honor long-term, fixed price agreements with the universities and other customers.

There's more from the paradise with power problems.

  • California Gov. Gray Davis signed two energy conservation bills yesterday, calling the package "the most aggressive, most expensive conservation effort in America." The new laws may have an outside chance of conserving energy, but they don't conserve money they will cost the state $850 million.
    Included in the package is $240 million to weatherize homes of low-income householders and millions more for rebates to consumers who purchase energy-saving appliances. More will be spent on incentives to get businesses to reduce electricity usage.

  • In PG&E's bankruptcy case, U.S. Trustee Linda Ekstrom has selected 11 creditors to form a creditors' committee to represent those having unsecured claims against the utility. The committee members include major banks, wholesale power producers and even the company that trims trees around PG&E's power lines.
    Ekstrom's staff asked the 100 largest PG&E creditors if they wanted to serve on the committee, and 75 said yes. She said that was an extraordinary response. "Usually, people do not want to serve," she said." Today I am getting responses from the disappointed.
    Among the 11 members of the committee are Davey Tree Expert Co., the City of Palo Alto, the State of Tennessee, Bank of New York, Bank of America, Enron Corp. and Dynegy Power Marketing. David Adante, chief financial officer of the tree trimming company, said "PG&E has always been a good client for us, and we believe firmly that at the end of the day they are going to survive and continue to be a good client."

  • Testifying before a bipartisan panel of six members of the U.S. Congress in a hearing held at San Jose State University, Chairman Curtis L. Hebert Jr. of the Federal Energy Regulatory Commission said his agency is moving swiftly to help California, but warned state politicians and regulators not to expect rate caps. "The demand for electricity continues to expand while supply fails to keep pace," he said. "Someone needs to start putting shovels in the ground."

  • The California Public Utilities Commission said in a proposed order yesterday that PG&E should go ahead with plans to improve transmission facilities in the South San Francisco Bay Area Silicon Valley to most. "Without this project, PG&E may be forced to curtail load or take other drastic steps to meet demand," the PUC said.
    The upgrades, which will cost about $125 million, are not a new idea. PG&E proposed the project in September 1999, but it has taken a year and a half to protect the interests of burrowing owls, tiger salamanders and recreation areas.

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