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

Power Bond Delay Could Cut California Budget Favorites

LCG, Oct. 5, 2001--Because California Gov. Gray Davis, the state Public Utilities Commission and state lawmakers cannot agree on how the largest municipal bond issue in history is to be repaid, programs with wide voter appeal are endangered, officials said.

One thing they agree on is, if the $12.5 billion in bonds are not issued the state faces a budget deficit of $9.3 billion, which would likely result in cutting programs such as education, health care and law enforcement -- all vote getters.

The proceeds of the bond issue are needed to repay the state's general fund for money taken earlier this year by the California Department of Water Resources to purchase about $6.1 billion worth of wholesale power on behalf of the state's cash-strapped investor-owned utilities.

Sandy Harrison, a spokesman for the state Department of Finance, said if the money isn't repaid by June of next year -- the end of the current fiscal year -- the $6.1 billion will have to be cut from other parts of the state budget.

State Treasurer Phil Angelides said "That's cutting the bone out of the state budget - not just the fat but the bone"

Davis first intended for the bonds to be brought to market in May, but legislative inaction made that impossible and a new deadline was set for October 31. In order for the bonds to be issued, the CPUC must develop a formula on how revenues from the three utilities' customers are to be applied to their repayment and to service their interest.

The commission, three of whose five members were appointed by Davis, has repeatedly failed to produce such a formula, and it now looks like it never will.

Some officials fear that the impasse has developed into a test of wills among the governor's office, the legislature and the regulators.

"There may be a game of chicken going on, and all of us who are caught in the middle are like deer in the headlights," said Scott Plotkin, executive director of the California School Board Association producing a vivid, if mixed, metaphor.

State Controller Kathleen Connell said lower energy costs make it likely the state will have to borrow only about half the $12.5 billion it originally sought, but she appeared to forget that the bonds must also provide funding for $43 billion in long-term power purchase agreements entered into by the water agency to cover much of the state's power needs over the next two decades.

Davis has ordered state department heads to submit budgets incorporating cuts ranging from 3 percent to 10 percent. "That's looking like a serious approach at this point, that we're going to have to do something along those lines," Harrison said.

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