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ERCOT 2019 Summer Quarter Outlook

LCG, May 29, 2019-- LCG released a new summer (June – September 2019) report that looks at how the ERCOT grid copes with strained network conditions. Resource adequacy analysis for the region is especially important during extreme summer loading conditions. This summer the network is under particular scrutiny as the reserves have tightened because of recent retirements.

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South Field Energy Breaks Ground for 1,182-MW Power Plant

LCG, May 16, 2019--South Field Energy LLC announced yesterday its groundbreaking for an 1,182-MW, combined-cycle electric generating facility in Columbiana County, Ohio. The natural gas-fired facility is scheduled to commence operations in mid-2021 and represents a $1.3 billion investment.

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Industry News

California Capsule: Cal-ISO Caused the Swings in Duke's Output

LCG, July 2, 2001A memo last Thursday from the California Independent System Operator to the state's Electricity Oversight Board says Duke Energy Corp. was following ISO orders to increase and decrease output at a Southern California power plant and not ramping the plant up and down to increase the prices it could charge for power, the Charlotte (N.C.) Observer reported this morning.

California Gov. Gray Davis and others had seized on the changes in output as a "smoking gun" that would prove Duke was illegally gaming the system in order to gouge electricity customers.

Three former workers at the plant told state investigators June 22 that Duke exploited California's electricity market by running output up and down to drive up prices. Davis praised the three workers as heroes, and Lt. Gov. Cruz Bustamante said their testimony provided the "smoking gun" that proved price gouging.

The "heroes," former employees of the former plant owner San Diego Gas & Electric Co. whom Duke chose not to retain, claimed Duke withheld power when it was needed and ordered useful parts destroyed. The three turned over what they claimed were operational logs for three days in January showing Duke's energy traders ordered rapid swings in production.

Last week, Duke took out full-page newspaper ads claiming the changes in plant output were ordered by Cal-ISO and provided copies of the ISO's orders to the Observer and the Los Angeles Times. Late Friday, Cal-ISO gave its own analysis to selected lawmakers, and that analysis showed that the plants several units followed ISO dispatch orders.

The Observer took a look at Duke's handwritten logs and found that they matched the ISO dispatch orders which called for increases and decreases in output, sometimes in a span of minutes. Often, Duke did not even have control over production, as the ISO's systems took over ramping the units up and down to meet its needs.

"It's regrettable that some people have inferred things that just weren't the case," said Duke spokesman Tom Williams.

But Gregg Fishman, a spokesman to Cal-ISO, said yesterday "The reports that the Times and the Charlotte Observer reference certainly are factual. But they may not represent the entire story."

FERC Refund Hearings Not Yet Productive
After a week of Federal Energy Regulatory Commission negotiations among California officials and participants in the state's electric power markets over refunds sought by the state from power producers, there was little if any progress to report.

California remained adamant that it was owed $8.9 billion by the generators and industry analysts said the figure was way too high.

"It's time for them to show us the money," said Michael Kahn, who chairs the board that oversees California's electric grid and is representing Davis at the talks. "Every way we have looked at it indicated to us that $8.9 billion is the floor."

The negotiations are being moderated by FERC's top administrative law judge, 72-year-old Curtis Wagner Jr., who has prohibited participants from talking with the media about the hearings.

The negotiations have a July 9 deadline, which is next Monday. A lawyer representing a power producer one of about 150 lawyers present said a week ago "It doesn't take a rocket scientist to realize that if you've got 15 days to settle a case that involves billions of dollars and hundreds of participants, it's not going to be easy," and now it's seven days, one of which is a holiday.

If the deadline isn't met, FERC could impose its own settlement terms, an eventuality that could lead to protracted litigation.

Calpine's 540 Megawatt Sutter Plant Starts Up
Calpine Corp. said this morning that it has begun commercial operation of its 540 megawatt Sutter Energy Center near Yuba City, Calif., a hoot and a holler up the road from Sacramento. Sutter is the first baseload plant commissioned in California in almost 20 years.

Calpine chief executive Peter Cartwright sounded like his company was the solution to the state's electricity problem. "Sutter is the first of eleven announced modern, highly efficient energy centers Calpine is building in the state," he said.

"As a California company, we are committed to providing affordable, reliable electricity," Cartwright went on enthusiastically, "and we're pleased to announce a second Calpine project, the Los Medanos Energy Center, will begin operations later this month. Three more Calpine projects are under construction, and our California initiative will yield 12,000 megawatts of needed electricity by the end of 2005."

Water Agency Signs More Long-term Contracts
The California Department of Water Resources has signed new contracts to provide the state with a total of 325 megawatts of power this summer, 530 megawatts next summer and more than 800 megawatts by summer 2003, the governor's office announced Friday.

According to a statement by Davis, all of the new contracts are with new power plants or projects under development. The largest is with the Sunrise plant which began production last week. Another contract was signed with Calpine Corp. for its North San Jose plant which will begin production next year and a third was with Clearwood Electric Co. for a geothermal facility.

Raymond Hart, deputy director of the water agency, said "We continue to minimize our exposure to the spot market while increasing the number of megawatts that California can rely on for years to come."

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