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: LA's Freeman Gets Top State Power Post

LCG, April 17, 2001S. David Freeman, general manager of the Los Angeles Department of Water and Power, will be named California's "chief energy czar for conservation," according to Steve Maviglio, press secretary for Gov. Gray Davis.

Maviglio stopped short of saying that Freeman would head up a California power authority, noting that the legislature has yet to pass a bill that would create a power authority.

A power authority would be the vehicle through which California could purchase the transmission assets of investor-owned utilities, build power plants on its own and otherwise get into the electric utility business.

Though Freeman, 75, would be the only state power official with broad experience in the field, his career has been spent entirely in the public sector. A native of Tennessee, he was chairman of the Tennessee Valley Authority from 1978 to 1981. He has also held top positions with the New York Power Authority, the Lower Colorado River Authority and the Sacramento Municipal Utility District.

Members of the California legislature have found Freeman easy to work with in the past. Even Republicans, who oppose creation of a power authority, seem to like the World War II merchant mariner. "Dave Freeman is a smart person who had forgotten more about energy than most people ever learn," said state Senate Minority Leader Jim Brulte, a Republican from Cucamonga. "If you are going to create a public power authority, someone like Freeman is the type of guy you want running it."

Talking to the Los Angeles Times yesterday evening, Freeman said "I'm going to have a role in getting people to understand that we have to conserve energy this summer." He declined to comment on the possibility of a power authority.

So What else is new?

  • Gov. Davis' done deal to purchase the transmission assets of Southern California Edison Co. for $2.76 billion isn't a done deal, it seems. State legislators, returning to work yesterday after their spring break, expressed serious doubts about the plan. Democrat state Sen. Don Perata of Oakland said the deal "is going to be pounded like a cheap steak," adding "It's the governor who is going to have to come in and sell it to us I don't intent to deal with intermediaries."
    With Pacific Gas & Electric Co. in bankruptcy court, Davis' deal would give the state only a third of the state's grid, and state Sen. Debra Bowen of Marina del Rey, another Democrat, said "Normally, if you buy only one-third of a bridge you get very wet. We feel that the ratepayers are already getting soaked."
    The plan is likely to be presented to the legislature as a "take it or leave it" deal with no room to maneuver. Maviglio said "The governor would prefer they took the negotiation lock, stock and barrel, but they have the right to amend it. We don't want them to, but they can."
    "They can have it that way, as long as they're comfortable with the answer not being yes," said Bowen. "Last time I checked, the Senate didn't cotton much to ultimatums."
    In the Assembly, Helen Thompson, a Democrat from Davis, asked "What are those Southern California power lines going to connect up to? How's this deal going to benefit electricity in the north?"
    Republicans were even less enthusiastic about Davis' plan.

  • Bellicose threats by California lawmakers and bureaucrats to seize power plants, tax "windfall" profits and even throw price gougers in jail brought warnings that attempting to punish power producers for California's lack of foresight would only worsen the state's power situation. Jan Smutny-Jones, executive director of the Independent Energy Producers group, found it contradictory that the state should be begging for new power plants and at the same time talking of harsh measures against the very people who would build them. "We cannot simultaneously be the heroes and the villains in this opera, "he said.
    Lt. Gov. Cruz Bustamante has proposed legislation that would make it a felony for power producers to charge "unjust" and "unreasonable" prices, with jail time as a possible penalty. Atty. Gen. Bill Lockyer is offering $50 million in rewards to whistle blowers who help him prosecute the power producers for fraud. State Sens. Nell Soto and Jack Scott, both Southern California Democrats, have introduced legislation to tax "windfall" profits.
    State Sen. Tom McClintock, a Republican from Thousand Oaks, said "To make electricity plentiful, we have to build more power plants, but we cannot accomplish that by threatening every generator in the world with the confiscation of its assets and the imprisonment of its executives the moment they set foot in California. It is no wonder that power plant applications in California are a fraction of what they are in states like Texas that welcome new power plant construction."

  • Here's something to watch for: When out-of-state companies purchased power plants from California's investor-owned utilities, they were granted the right to sell electricity in the state at market-based prices. The permission came from the Federal Energy Regulatory Commission and the license was good for three years. That was 1998, and it is now three years later.

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