AEP Will Proceed with North Central Wind Projects Despite Texas Commission Denying Approval

LCG, July 8, 2020--American Electric Power (AEP) announced last Thursday that, following the PUC of Texas not approving AEP subsidiary Southwestern Electric Power Co.'s (SWEPCO) plan to add 309 MW of wind energy to serve Texas customers, AEP will proceed to acquire the entire planned 1,485 MW of North Central wind projects.

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JEA Board Approves Transaction with FPL to Close 848-MW Coal Unit in Georgia

LCG, June 30, 2020--The JEA Board of Directors in a special meeting last Friday unanimously approved a transaction that will result in closing an 848-MW unit at Plant Scherer and entering into a 20-year purchase power agreement (PPA) with Florida Power & Light Company (FPL).

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Industry News

California Capsule: Big, Pre-planned Blackouts Considered

LCG, May 11, 2001Frustrated by sudden rolling blackouts ordered by the California Independent System Operator when its desperate last-minute attempts to buy power fall short, state leaders yesterday were considering cutting power to large sections of the state in advance of critical electricity shortages.

State lawmakers met yesterday to consider the issue as Cal-ISO narrowly averted blackouts for the second day. On Monday, about 100,000 electricity customers suffered loss of power for short periods, and on Tuesday the number jumped to 300,000 before cooler weather came to the rescue Wednesday and yesterday.

But this week's problems are seen as just the beginning of almost daily outages as summer comes to sunny California.

Looking at the summer, state Sen. Debra Bowen, a Redondo Beach Democrat, said "We're talking about blackouts of such magnitude we just have to find a way to get people better notified. People want to know whether it's in our best interest to simply plan for outages, rather than subject ourselves to an out-of-control market."

Assemblywoman Jackie Goldberg, a Los Angeles Democrat, confirmed that people need to know about outages ahead of time. "The overwhelming response from our constituents is, 'We want notification'," she said.

Critics of the idea say that while scheduling blackouts could add to predictability, it could also make them more frequent than necessary. Customers might find themselves without power even when there is no shortage of electricity.

There will be shortages, and they are predictable. If a 15 percent reserve margin of power is considered prudent, that margin could be provided for by scheduled blackouts, with unscheduled generation failures, as when a power plant trips off line, eating into the margin rather than causing a panic which sends wholesale power prices soaring.

Modeling techniques are available, including those created by our publisher, LCG Consulting, which can provide astonishing clarity to future market conditions. These could be employed to plan scheduled blackouts that would provide a satisfactory power reserve and allow businesses and householders to govern their power use accordingly.

NOTE: Never, in more than five years, has EnergyOnline Daily News been asked to endorse an LCG product, and it has not been asked to do so now. The editors feel, however, that the availability of these modeling techniques should be more widely known.

Bowen believes that a policy of large, planned outages could rein in the runaway power prices that have driven the state' investor-owned electric utilities to insolvency and threaten to do the same to the state. Yesterday, to avoid blackouts, Cal-ISO at one point paid Reliant Energy Inc. $1,900 per megawatt-hour for electricity.

That figure wasn't "price gouging" on the part of Reliant. The company simply charged what a customer was willing to pay, and no gun was held to the customer's head. With large, pre-planned outages, the customer would be saying "We don't want the power at that price." It is conceivable that the customer could wind up saying "We won't pay more than $75 per megawatt-hour."

Businesses are placed at unacceptable risk by sudden, unplanned blackouts. Complicated production processes are shut down without warning, exposing themselves to costly damage, where a little bit of warning would allow companies to fire up standby generators. When Silicon Valley was surprised by an outage during a heat wave last June 14, the estimated cost to high-tech companies was $100 million.

  • It's beginning to look like California Gov. Gray Davis won't get the transmission facilities belonging to Southern California Edison Co. as even members of his own Democrat party turn away from it. "It has a snowball's chance" in hell, said state Assemblywoman Sarah Reyes, a Fresno Democrat.
    Davis reached a tentative deal with the utility for the state to pay $2.76 billion for its high voltage wires, but moderate Democrat lawmakers are talking about cutting the offer back by $1.5 billion. Assemblyman Joe Nation, a San Rafael Democrat, said "I don't know of anybody who has said 'This is a good deal'." He and Assemblyman John Dutra, a Democrat from Fremont, are shopping an idea for the state to buy a five-year option that would allow the lines to be acquired for $1.2 billion. More radical Democrats are talking about buying the entire utility, an idea Nation dismisses as "the East German model."
    SoCal Ed has repeatedly said its deal with the governor will not stand much modification. "Ideally, we would hope that after all the teeth gnashing that's going on, they'll see how difficult it is to reach an agreement and that, in the end, they'll adopt (the agreement) in large part the way it is now," said Brian Bennett, the utility's vice president for external affairs.

  • Davis yesterday signed legislation authorizing the state to issue $13.4 billion in revenue bonds to provide funding for power purchases made by the California Department of Water Resources. The bonds, originally planned for $10 billion, were originally planned to provide money for long-term power purchases at favorable rates but now about half will go to replenish the state treasury for expenditures already made at prices ranging up to yesterday's $1,900 per megawatt-hour. So far this year, the water agency has spent $6.2 billion of taxpayer money buying power. It is easy to see how PG&E and SoCal Ed found themselves more than $13 billion in the hole after nine months of last year.

    The state won't be able to issue the bonds for 90 days, which effectively kills "bridge" loans that would have provided about $4 billion up front. On top of that, Davis was unable to say that the $13.4 billion would be enough to cover the state's electricity purchases.

  • The California Energy Commission voted unanimously yesterday to allow AES Corp. to return to service for 10 years two units at its Huntington Beach power plant, acquired from SoCal Ed. The two units, which were retired by Edison in 1995, have a combined capacity of 450 megawatts. State officials say they expect the units to begin operating in August, but AES cautioned that many improvements have to be made to the 40-year-old generators.

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