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: Don't Look North for Power, State Warned

LCG, April 13, 2001There will be a lot less power this summer on the electricity superhighway that stretches from Canada to Mexico along the West Coast, the Los Angeles Times warned this morning, and there will be a bidding war for what there is.

Near Wenatchee, Wash., the Chelan County Public Utility District had workers on a bluff overlooking the Columbia River had workers installing 26 diesel generators and hooking them up to the existing transmission lines that serve the mighty hydroelectric infrastructure of the Pacific Northwest.

"We wouldn't be doing this if the river were producing anywhere near normal this year," said Wayne Wright, spokesman for the district, which paid $31 million for the generators. And Lake Chelan wouldn't have spent $31 million if there were any power to send to California.

The equation is simple: With the lowest snowpack in decades on the peaks of the Northern Rockies, the mighty Snake and Columbia Rivers will carry commensurately less water to the Pacific, and water means electric power from the federal dams on the rivers.

"If it turns out to be 58 percent of the water, we're going to be able to generate 58 percent of the electricity," the Times was told by Dave Lyngholm, who works upstream of Wenatchee managing the biggest power plant in North America: Grand Coulee Dam.

In an average year, Grand Coulee's generators are turned by about 65 million acre-feet of water--almost as much as all the runoff in California. This year, about 38 million acre-feet are expected to flow down the Columbia. That's Lyngholm's 58 percent.

"It's going to be a major factor that we're going to have to manage around all summer long," said Jim McIntosh, chief of grid operations for the California Independent System Operator.

And it will be an expensive factor. Electricity traders forecast that in July and August, power purchased at peak times will cost $510 per megawatt-hour at the Oregon border, $635 at the Arizona border and $385 in Northern California.

Yes, it's Friday the thirteenth in California, too.

  • Members of a U.S. Congress subcommittee held a hearing yesterday in San Diego, birthplace of California's electricity crisis or at least the place where the crisis first became evident to everybody. When local utility San Diego Gas & Electric Co. had paid off its stranded costs last spring, it was free to pass market prices for electricity through to its retail customers, and San Diegans saw their electric bills more than double in less than two months.
    Mark Seetin of the New York Mercantile Exchange told the panel, which was completing a three-day swing through California, that granting commercial and industrial users authority to negotiate their own terms would greatly reduce the amount of power the state buys and at the same time help restore stability to a wildly fluctuating energy market. "That would help get the state off the treadmill of the spot market," Seetin said.
    The panel discussion also featured executives from Reliant Energy, Williams Energy Services and Sempra Energy, which owns SDG&E and Southern California Gas.

  • A spat flared up between SDG&E and Dynegy Inc. when the San Diego utility charged the Houston-based power producer with ordering it to shut down power plants producing badly-needed electricity for California. The utility sold 18 combustion turbine generators with a total capacity of 250 megawatts to Dynegy in 1999 and is under contract to operate them until May 22.
    SDG&E president Debra Reed said in a letter to Dynegy "we are appalled that you would even consider such action."

    "That letter seriously mischaracterizes the conversation you and I had yesterday," complained Stephen Bergstrom in a letter to Reed. The Dynegy president and chief operating officer said his company "did not instruct SDG&E to shut down operating units, nor did we suggest that we would not make power available to creditworthy buyers."
    But Dynegy doesn't want any power going to the penniless California Independent System Operator.

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