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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.

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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: Davis Takes Soap Box to Washington

LCG, June 20, 2001California Gov. Gray Davis was scheduled to testify before a high-profile hearing of the Senate Governmental Affairs Committee, chaired by Sen. Joseph I. Lieberman (D-Conn.), and was expected to demand that the Federal Energy Regulatory Commission order "greedy" independent power producers to refund between $5 billion and $6 billion to the state.

According to aides, Davis has also scheduled a round of television appearance in the nation's capital, where he will make the same demands. The governor also will distribute to every member of Congress a 177-page book chronicling the state's response to the crisis, as seen through his eyes.

Davis' demand for refunds is seen by political observers as made necessary by FERC's Monday decision to impose price controls on wholesale power in the West. Seen as a victory by many Democrats Sen. Dianne Feinstein (D-Calif.) said the move was sufficiently encouraging for her to table proposed legislation that would require price caps in California FERC's action forced the quixotic governor to find other windmills to attack.

Republicans believe Davis is attempting to create confrontations with the Bush administration that will allow him to run for reelection in 2002 as much against the president as against any California Republican challenger.

That belief is bolstered by the relative immunity from the energy crisis of any such challenger. The Republicans most likely to run for California governor in 2002 -- California Secretary of State Bill Jones, former Los Angeles Mayor Richard Riordan or businessman William E. Simon Jr. had nothing to do with the state's failed electric deregulation scheme.

When FERC on Monday offered full-time price controls covering California and 10 other Western states, Davis complained the action was too little and too late.

One White House official said that was the governor's modus operandi. "He asks the administration to do something, the administration does it, and then he attacks the administration for not doing enough. He needs someone to blame."

Today's Senate hearing is likely to be a lot less confrontational than Davis would like. Lieberman aides said FERC's action "changed the dynamic."

State Controller Refuses to Pay Spin Doctors
California state Controller Kathleen Connell, a Democrat who has been increasingly at odds with Davis, said yesterday that she will refuse to pay Chris Lehane and Mark Fabiani, the Democrat public relations specialists hire by the governor, with state funds. Their contract is worth $180,000 for six months.

The two men, who are considered fiercely partisan and politically ruthless, worked inside the Clinton White House and for Vice President Al Gore during his failed 2000 campaign. They earned the nickname "Masters of Disaster" for consistently handling public relations matters during Clinton's various scandals.

When Davis hired the two spin doctors, he said it was to help him set strategy to help solve the state's energy crisis. Connell said it's hard for her to imagine that Lehane and Fabiani are working on state policy, as required by law, and not politics.

She said it was a "slap in the face" to California taxpayers who have been asked to assume the burden of $43 billion long-term debt for power "to ask them to pay for people to explain the situation away."

Separately, a lawsuit by the National Tax-Limitation Committee, a Sacramento legislative watchdog group, alleges that Fabiani and Lehane are violating the Political Reform Act because they also have done work for Southern California Edison as consultants.

Lewis Uhler, a spokesman for the group, said "We are kind of adding insult to injury to then have the governor who feels the pressure of this crisis to spend this kind of dough for damage control."

State Senate minority leader Jim Brulte, a Republican, said "The governor has hired millions of dollars worth of consultants who are experts on bonds and experts on energy. In each of these cases, we have given him the benefit of the doubt. There is no doubt here. The appropriate people to pay for this is the Gray Davis campaign committee."

State Arranges $5 Billion in Power Loans
State Treasurer Phil Angelides said yesterday he had arranged up to $5 billion in loans to pay forfuture power purchases, a move he said was necessary to avoid a continued drain on California's general fund.

Angelides said he has obtained firm commitments for $3.5 billion from JP Morgan and LehmanBrothers at a blended interest rate of about 4.5 percent. If long-term bonds worth $13.4 billion are not issued by October 31, the interest rate would climb to about 7 percent.

One important aspect of the bridge loan is it provides funding for the state's long-term power purchases before a July 1 deadline contained in some of the contracts. If the deadline had not been met, some power producers would have been able to walk away from their agreements.

From Angelides point of view, the money avoids a continued drain of the state budget and cuts in other programs. "In essence, it stops the general fund bleeding," he said.

So far, the California Department of Water Resources has spent more than $6 billion on short-term power purchases, paying top dollar on the volatile spot market with cash from the general fund. The bond issue is expected to reimburse the general fund and pay off the bridge loan, as well as pay for power purchased on the long-term contracts. The arithmetic is discouraging.

NIMBY Lawsuits Hit Frisco Power Plant
The City of San Francisco, along with environmental groups and community activists, went to court yesterday asking that the owner of the Portrero Hill power plant reduce its output until more rigorous pollution controls are installed.

The Portrero Hill station, purchased by Mirant Corp. from Pacific Gas & Electric Co., is almost old enough to qualify for national landmark status. While Mirant wants to replace the old plant with a new one located a few blocks away on the edge of the bay, the old facility is still used as a peaking plant, capable of churning out 156 megawatts of power.

Fifteen years ago, Portrero could produce 220 megawatts, but it's wearing out. Some say there are pieces of the plant that are more than 90 years old. Mirant wants to replace it, not rebuild it.

As a peaking facility, Portrero Hill is allowed to run 877 hours a year, a figure already exceeded for 2001. Under an emergency order signed by Gov. Davis, Mirant can exceed its pollution limits and build the fines it must pay into the price it charges for power.

"Not-in-my-backyard" San Franciscans are blaming Mirant, and not the governor or the state's power crisis, for the added pollution.

"The Mirant Corporation is behaving like an outlaw and the air district is their willing accomplice in violating clean air laws," said Mike Thomas, an organizer with Communities for a Better Environment, one of the plaintiffs. The other groups that sued are Bayview-Hunters Point Community Advocates and Our Children's Earth.

The City of San Francisco filed a separate suit.

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