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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

FERC Judge: No Gas Price Manipulation by El Paso,But Standards of Conduct were 'Clearly . Violated'

LCG, Oct. 10, 2001--The Federal Energy Regulatory Commission's top judge ruled yesterday that El Paso Corp. did not manipulate gas prices on its pipelines into California last year, but found the company guilty of affiliate abuse.

At issue was whether El Paso Corp. had conspired with its affiliates, El Paso Merchant and Mojave Pipeline, to drive up natural gas prices in California. The California Public Utility Commission, Pacific Gas & Electric Co., and Southern California Edison Co., claimed El Paso withheld capacity on its pipelines into the state from March through November of last year.

They claimed that the action inflated prices, costing the state $3.7 billion more than would have otherwise been paid for gas.

Administrative Law Judge Curtis Wagner did not find evidence of such manipulation. "While El Paso Pipeline and El Paso Merchant had the ability to exercise market power, there was not a clear showing that they had in fact done so," he said.

But Wagner said transcripts of telephone conversations in February of last year showed clear violation of FERC standards of conduct, which say a pipeline operator must share natural gas transmission information with all shippers and not just its own marketing affiliates.

The standards also require that a pipeline company and its marketing affiliate must maintain "arm's length" separation.

"These telephone transcripts demonstrate blatant collusion on the part of El Paso Merchant and Mojave-El Paso Pipeline to keep secret a discount for service on the downstream Mojave system until the open season ended, giving El Paso Merchant an advantage in making its bid for the total 1,220 million cubic feet per day," Wagner wrote.

The judge said the violation was somewhat mitigated by changing conditions.

"While there are clear violations of the current standards of conduct in this case, those rules were promulgated many years ago and the gas industry has undergone tremendous changes since then with merger after merger creating large holding companies, such as the El Paso Corp., and very different methods of doing business than in bygone years," he wrote.

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