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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: State Officials Unhappy with FERC's Caps

LCG, April 30, 2001A pair of lawyers appointed by California Gov. Gray Davis to top state energy posts believe they know more about electricity and its management than the Federal Energy Regulatory Commission.

The state's top power regulator and the head of the board of governors of the state's transmission grid manager complained Friday that FERC had exceeded its jurisdiction, had let price gougers off the hook and had created a situation which could make summer blackouts worse, not better.

Michael Kahn, named by Davis to head the board of the California Independent System Operator, said in a telephone news conference that FERC's price cap order illegally ties the lid on power prices to a requirement that California join with other Western states in formation of a regional transmission organization.

"It's not within their authority to have this kind of linkage," Kahn complained with questionable accuracy. "We're going to take whatever actions we can to oppose this to the extent our lawyers tell us it's illegal."

Loretta Lynch, Davis' hand-picked president of the California Public Utilities Commission, was unhappy that the FERC order did nothing to force independent owners of California's major power plants to cough up any of the "extraordinary" profits they made last year after wholesale power prices reacted to the excess of demand over supply.

Lynch also took exception to a section of the FERC order that set a procedure for large industrial customers to get paid for shutting down operations when insufficient power supply endangers the grid. "They're creating a whole new, wholesale blackout system," Lynch fumed.

There was more from the Golden West where life is best.

  • Joseph Fichera, a financial adviser to the governor, said on Friday that the California Department of Water Resources has contracts in hand for 14 percent of Southern California Edison Co.'s power through the end of the year, and 30 percent of San Diego Gas & Electric Co.'s, but only 8 percent of Pacific Gas & Electric Co.'s. "It's Path 15 congestion," Fichera explained. "We can't get power to the north."
    Path 15 is a segment of PG&E-owned transmission in the San Joaquin Valley, running from Los Banos south to about Kerman, west of Fresno. PG&E spokesman John Nelson said Path 15 is not to blame for power problems in the north. "There is no constrain on Path 15 at this time," he said. "Path 15 constraints are a winter problem, not a summer problem."

  • In Washington, Texas Republican Rep. Joe Barton, chairman of the House Energy and Air Quality Subcommittee, is expected to introduce legislation this week that would allow operators of so-called "qualifying facilities" to suspend their contracts with PG&E and SoCal Ed and sell power on the open market..
    Qualify facilities are power plants developed under the encouragement of the Federal Public Utility Regulatory Policies Act of 1978, enacted as a result of the 1970s energy crunch with the objective of creating a broader source of electric generation. Most of the plants are small- to mid-size natural gas-fired units, many of them cogenerators that produce process steam for a business and sell power to a utility under a long-term contract. They are not mostly environmentally-friendly "green" plants as the popular press would have you believe.
    Barton's legislation could throw a 3,000 megawatt monkey wrench into Davis' plans to save the state from its energy crisis. Right now, the generation from the QFs belongs to the utilities, so the state does not have to buy power to cover that 3,000 megawatts. If the QFs are freed from their utility contracts, they will sell their power for top dollar and it will be the state that's buying it.

  • The Sacramento Bee took a look yesterday at one of the things that will occur when the rolling blackouts hit California this summer. All over the state, diesel-powered generators will automatically fire up to keep essential and some non-essential operations running. These generators are run by the same kind of diesel engines that power 18-wheel highway rigs, but in many cases they are big enough to power a battleship. Not only that, they have not been subject to the smog rules that have reduced highway diesel emissions over the past 30 years.
    These motors are dirty. They cough and sputter and emit clouds of black particulate matter that is greasy and will ruin a summer dress. Michael Scheible, deputy executive officer of the California Air Resources Board, told the Bee "Go down to the bus station and have them turn on their engines and hang around there that's what it's like." Scheible has not been around really BIG stationary generators power by huge diesel engines that are bigger than the ones in locomotives.
    No one seems to know how many of these generators exist. Air districts say there are at least 641 in Sacramento alone, and after that the numbers get less precise. Maybe 5,000 in the San Francisco Bay Area, another 1,200 in the San Joaquin Valley and thousands upon thousands in Southern California, go the guesses.

  • Chuck Watson, chairman of Dynegy Inc., which is one of the companies Davis likens to the "biggest snakes on the planet," shrugs off the governor's vituperation and sees a bright side to the California energy crisis. It will keep other states from fouling up their own programs, and will help deregulation move forward in the U.S.
    "I believe California's situation will be the very impetus to speed up deregulation around the country," Watson told a conference on energy policy sponsored by Oklahoma State University. "It put deregulation on the front page." He said that California's well-publicized problems have brought home to legislators and voters around the country that you can't get away with a lack of power plant generation, inadequate transmission facilities, or a market that caps retail rates while letting wholesale power prices soar free.
    "States and the power industry are working very hard not to have another California anywhere else in the country," Watson said, pointing out to streamlined power plant permitting going on in most states to assure ample reserves of power.

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