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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 Backs Opposed Power Plant

LCG, April 19, 2001California Gov. Gray Davis yesterday lent his support to a 600 megawatt power plant that Calpine Corp. wants to build in a rural area on the south side of San Jose, putting himself at odds with the City Council of the self-styled "capital of Silicon Valley," which has unanimously rejected the facility.

The Metcalf Energy Center would be built in an undeveloped area where San Jose's largest employer, computer networking giant Cisco systems, wants to build a "campus" that would provide space for 20,000 workers. Cisco, has opposed the plant tooth and nail because it does not want to live next to a powerhouse.

The governor said all parts of California have to share in the effort to increase electricity supply, and praised Calpine's proposal as a model of low-polluting efficiency. "We are all in this together," Davis said. "We are one state, and we all have to make the sacrifices necessary to make up for the mistakes of the last 12 years when no major power plants were built."

Cisco Systems remains opposed to the plant because of "health and safety issues," but Cisco is losing its clout as Internet networking takes on new forms for which the company does not provide hardware or software. It has lost $400 billion of market value from a high of $555 billion and is cutting its workforce by 15 percent.

Cisco spokesman Steve Langdon said yesterday that the company might scale back its proposed facility and might not use it for the company headquarters. "It doesn't all get built at once," he said. "We will build and occupy the site over time, in phases, as needed."

And there's more news from where the sun sets.

  • In the California legislature yesterday the state Senate Energy Committee voted 6-1 in favor of a bill that would allow large power customers to purchase electricity directly from providers other than utilities. Those customers had that right under the state's deregulation law, but lost it in January when Davis signed a measure that made the state purchasing agent for the cash-strapped utilities.
    Office building owners, large farms, manufacturers, oil refineries, grocery chains, shopping malls and others want a return to what is called "direct access" so they can make their own power deals and possibly get better prices. Populists object to the move, saying residential and small business customers will be left to shoulder the difference.
    They are, however, unable to identify the "difference" because there is none. A large customer is so much easier to serve that its savings reflect that ease of service. Before wholesale power prices began their abrupt rise 11 months ago, there was little desire for direct access, and only a little more than 2 percent of all electricity customers took advantage of it. Now, big users want the option restored.

  • Don't look to Vice president Dick Cheney for price caps. "Frankly, California is looked on by many folks as a classic example of the kinds of problems that arise when you do use price caps," he said yesterday. California's deregulation scheme capped the retail price of electricity, but forced the retailer the state's investor-owned utilities to pay wholesale prices determined solely by supply and demand.
    Cheney said price caps may provide "short-term political relief for the politicians, but they don't do anything to deal with the basic fundamental problem," which is lack of supply.

  • The California Public Utilities was expected today to vote on whether to conduct yet another investigation, this time to find out why all of the so-called "qualifying facilities" aren't producing power as fast as they can. These generators, which produce around 20 percent of the state's electricity, are not all wind farms and solar arrays as the popular press wants to believe, but are mostly gas-fired plants set up in response to the federal Public Utility Regulatory Policies Act of 1978, commonly called PURPA.
    Though the PUC ordered the state's utilities to pay the QFs for power purchases, that was on a forward-going basis only, and did not take care of the money owed for past power purchases. The price of natural gas has soared nationwide, making the cost of generating electricity much higher. Jerry Bloom, a lawyer for the California Cogeneration Council which represents a lot of the plants, said "They cannot operate at the (payment) the PUC has adopted.

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