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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 Takes a Bath on Surplus Power

LCG, July 18, 2001The state of California is selling surplus electric power and losing money perhaps a lot of money on every megawatt-hour, according to a report in this morning's issue of the San Jose Mercury-News.

All year long, the state, through the California Department of Water Resources, has been purchasing power, often at top prices, in an effort to stave off rolling blackouts during the summer. With the arrival, a number of factors have combined to give the state a surplus.

The weather has cooperated to a marked degree, with peak demand much less than predicted. In addition, power plants owned by independent generators have been reliable following maintenance over the winter and three large new generating stations have begun producing electricity. On top of that, Californians have been answering the call to conserve power spurred by the specter of higher prices.

"We're seeing certain times of the day where we may not need power that we previously thought we needed, and we're selling it on the open market," Oscar Hidalgo, spokesman for the water agency told the Mercury-News. "We're probably moving a little more power than we anticipated, but I don't think anybody anticipated a July like we're experiencing."

The California Independent System Operator has daily been reporting around 42,000 megawatts of power available while demand has been far lower. Today, for example, Cal-ISO expects demand to reach 32,210 megawatts, meaning a surplus of around 10,000 megawatts.

Because electricity can't be stored, the state has been obliged to sell its surplus for whatever it can get, which in some cases hasn't been much.

"There's a painful lesson to be learned when you overbuy when supplies are tight," Gary Ackerman, executive director of the Western Power Trading Forum, told the paper. "Anybody can lose money in this business, and the state of California is getting a taste of that."

According to California Energy Markets, a trade weekly, the state was selling power last Thursday at $25 per megawatt-hour. Ackerman said the state has been selling power for as little as $1 to $5 per megawatt-hour. Power was selling on the spot market for $20 to $40 per megawatt-hour yesterday.

Whether the state planned well or overbought is hard to say, the Mercury-News observed. The contracts could prove invaluable if another heat wave threatens blackouts. Ackerman likened power contracts to insurance -- a prudent move to guard against shortages and price spikes, even if it turns out you don't need it.

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