Federal Government uses UPLAN model to examine price volatility in ERCOT

LCG, October 11, 2022--The U.S. Energy Information Administration, or EIA, released its latest supplement to the Short-Term Energy Outlook (STEO) in the Texas market, assessing various possible scenarios using LCG’s UPLAN NPM model, with a special focus on the effects on wholesale power prices and market conditions.

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Michigan Governor Supports Reopening Palisades Nuclear Facility

LCG, September 16, 2022--The Governor of Michigan last week sent a letter to the U.S. Department of Energy (DOE) in support of Holtec International’s application for a federal grant under the Civil Nuclear Credit (CNC) program to save the Palisades Nuclear Facility in Southwest Michigan. The federal grant could result in restarting the baseload, carbon-free, nuclear power plant.

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Industry News

SoCal Ed Settlement Staves Off Bankruptcy

LCG, Oct. 3, 2001--The California Public Utilities Commission yesterday, in a move that may have scuttled plans of Gov. Gray Davis to "rescue" Southern California Edison Co. from bankruptcy, reached agreement with the utility on a plan that will allow it to save itself.

The CPUC and SoCal Ed settled a lawsuit by the utility with an agreement that will allow the company to raise $3 billion from ratepayers to help pay off a deficit it piled up buying expensive wholesale power and reselling it at artificially low rates mandated by California's electric restructuring law.

The 4-1 vote also pointed up the growing independence of CPUC president Loretta Lynch from the governor who appointed her. Asked following the meeting whether she expected retribution from Davis, Lynch said only that the governor can appoint as president of the commission whomever he chooses of its five members.

The agreement with SoCal Ed will settle a federal lawsuit brought by the utility last year seeking to pass along to ratepayers wholesale costs that exceeded retail rates set by the commission. Under the settlement, SoCal Ed will devote $3 billion of its revenues between now and the end of 2005 to paying off almost half of its $6.4 billion deficit.

The company will provide about $1.2 billion by eliminating its dividend at least through 2003. The commission will decide then whether the dividend can be restored. Lynch said the CPUC and the utility "have signed a truce."

John Bryson, chief executive of SoCal Ed's parent holding company Edison International Inc., said the deal was "a workable way for Edison to become creditworthy (and) to remove the state from the power business."

Pacific Gas & Electric Co., the state's largest utility that in April filed for protection under Chapter 11 of the U.S. bankruptcy law, said the CPUC gave SoCal Ed that same things it had asked for without success before it filed for bankruptcy.

In a statement, PG&E wondered why state regulators "couldn't have agreed to this framework 11 months ago."

While Davis welcomed the settlement, saying it "has protected the public interest and will allow the state's second-largest utility to return to financial health," he was less than happy that the CPUC also rejected his plan to issue $12.5 billion in bonds, again delaying efforts to repay the state for buying electricity this year.

The settlement agreement must still be approved by U.S. District Judge Ronald S.W. Lew.

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