LCG Publishes 2024 Annual Outlook for Texas Electricity Market (ERCOT)

LCG, October 10, 2023 – LCG Consulting (LCG) has released its annual outlook of the ERCOT wholesale electricity market for 2024, based on the most likely weather, market, transmission, and generator conditions.

Read more

LCG Publishes 2024 Annual Outlook for Texas Electricity Market (ERCOT)

LCG, October 10, 2023 – LCG Consulting (LCG) has released its annual outlook of the ERCOT wholesale electricity market for 2024, based on the most likely weather, market, transmission, and generator conditions.

Read more

Industry News

California Capsule: CPUC Stalls on Rates – Maybe Today

LCG, May 15, 2001The California Public utilities Commission couldn't bring itself to lower a $5 billion electric rate boom on the state's power customers yesterday, saying more time was needed to balance the increases among residential and business groups.

Commission President Loretta Lynch said "The problem here is making sure we are allocating the (rate hikes) equitably."

Under a plan being considered by the CPUC last week, about half of the residential customers of the state's two largest utilities would see rate increases ranging from 7 percent to as much as 60 percent, with those who use the most power getting the biggest increases.

Lynch revised that plan over the weekend and yesterday some commissioners said they were not yet familiar with her changes.

Three members of the CPUC were appointed by California Gov. Gray Davis and two by his predecessor, Republican Pete Wilson. The two Republican appointees, Richard Bilas and Henry Duque, will not be on hand if the commission votes today on the rate hikes. Bilas will be in a hospital undergoing a medical procedure and Duque will be in Texas as a director of the national Association of Utilities Commissioners. Both said they will vote by telephone, however.

Consumer advocates had argued that business customers should be made to bear the greatest burden of the rate increases, but Lynch said that conservation would be better served by moving more of the overall burden to residential customers who are moderate users of electricity.

Jeff Brown, a commissioner appointed by Davis, said he had talked to the governor's office and was told Davis had two primary concerns about the rate increases. First was that there be sufficient impact in the residential class to encourage conservations, Brown said, and second that "industrials not be walloped and have some mitigation of the rate increase."

  • Davis released his revised budget plans yesterday, cutting $1.2 billion from dozens of transportation and highway projects but increasing spending on K-12 schools and community colleges to nearly $5 billion more than the minimum required by state law. Under the governor's budget, education would cost taxpayers $7,168 per student in the next school year.
    Davis said "The budget revisions I make today curb government spending but protect my highest priority: public education and law enforcement." Capitol observers say the governor was shifting the hard work of making spending cuts onto the state legislature and point out that the energy crisis was barely mentioned.
    The budget assumes that the $7 billion the state has spent on power purchases, a number growing daily, will be paid back by a $13.4 billion bond issue which could be sold in late August. By late August, the critics say, the bond issue might not be enough.
    Davis conceded "If anything goes wrong, then we're in real trouble."

  • The North America Electric Reliability Council this morning released its 2001 Summer Assessment, and things don't look good for California. "The assessment concludes that California electricity users will experience rotating blackouts, much more so than last summer or this winter," said Michehl R. Gent, president and chief executive of NERC.
    Last summer, California was able to import significant amounts of power from the Pacific Northwest, which did not yet realize that it was facing a drought. Federal orders kept that power flowing in December and January. It will not be available this year. "We expect that utilities in the Pacific Northwest will be able to serve all of their firm demands this summer," Gent added, "but they will not have electricity available toexport to California and elsewhere."
    A supplement to the NERC report, based on interviews with the California Independent System Operator, reaches gloomier conclusions than those offered so far by Cal-ISO. NERC expects firm demand to be curtailed for about 260 hours over the course of this summer, with an average firm demand curtailment of about 2,150 megawatts.
    What does that mean in terms of the rolling outages Californians have been told to expect? If one megawatt is enough power for 1,000 homes and if 260 hours is almost three hours a day for the three months of summer, it looks like more than 2 million households could be affected for almost three hours every day. There will be some businesses that lose power of course. But, if you ask us, we would rather lose power at home than lose our job.

  • In U.S. Bankruptcy Court, Judge Dennis Montali heard arguments yesterday by Pacific Gas & Electric Co. and the California Public utilities Commission over a CPUC order of March 27 that would require the utility to restate its accounting, which would result in prolonging the retail electric rate freeze. The company says the CPUC order illegally extends the rate freeze and the CPUC says the judge has no power to intrude on its regulatory decisions.
    Montali himself was unsure of where he stood. To Walter Rieman, a lawyer for the state, he said "You want me to say everything the commission has done or will do is insulated. I don't know if I can do that, and maybe I can't." After three hours of arguments, Montali said he would prepare a written decision. "It will be issued when I issue it," he told the parties.

  • El Paso Corp. was in Washington, D.C., yesterday defending itself before a federal administrative law judge against charges brought by the California Public Utilities Commission that the company had used its market power to drive up the price of natural gas in the state by billions of dollars over the past 12 months.
    Norma Dunn, an El Paso vice president, said the company had done nothing wrong. "We need to look at this in context," she said. "All shippers were trying to move as much gas as they could into the state. The problem is you can't get all that much gas into the state."
    The CPUC case is based in part on a study of the market by Sandra Rovetti, a technical analyst with the commission. In written testimony, she said she had examined the market in a "controlled experiment" and concluded that an El Paso Corp. subsidiary, El Paso Merchant Energy, had wielded monopolistic power to drive up prices.
    Under questioning by Bill Sherman, a lawyer for El Paso Merchant Energy, Rovetti admitted her controlled experiment did not take into consideration the impact on gas prices of such things as weather and power plant outages.

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