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

PG&E Reorganization Plan Draws Fire

LCG, Oct. 11, 2001--A reorganization plan offered by pacific Gas & Electric Co. in bankruptcy court has drawn fire from critics who say it is a plan to duck state regulation.

Perhaps the critics haven't read the plan, responds PG&E.

The plan is a "regulatory jailbreak," said Loretta Lynch, president of the California Public utilities Commission. She called the plan a "corporate shell game to evade proper state regulation" by transferring assets that are presently regulated into unregulated affiliates.

In a statement, PG&E said "The plan maintains the current regulatory authority for virtually all aspects of the business." The company pointed out that the CPUC would continue to regulate the utility, including electric and natural gas rates, and that the "vast majority" of utility assets would remain under CPUC oversight.

PG&E said "The only regulatory change our plan proposes is for (the Federal Energy Regulatory Commission) to assume jurisdiction over rates for the power from the company's generation assets, and over the rates, terms and conditions of service for the gas transmission system."

"Power from the company's generation assets" would be wholesale power, which FERC is increasingly regulating anyway. Gas transmission is regulated by FERC in most states already, and PG&E's acceptance of CPUC oversight is voluntary as it is.

The assets that would be transferred to unregulated units of parent holding company PG&E Corp. include the Diablo Canyon nuclear power plant, PG&E's hydroelectric facilities, and its electric transmission system. The utility would continue to own the local gas and electric distribution systems that serve about 13 million California customers.

The CPUC would continue to protect those 13 million customers, through its regulation of the ultimate delivery of gas and electricity, from the ill effects of any shenanigans attempted by the holding company or its affiliates.

PG&E spokesman Jon Tremayne said the hydroelectric system, nuclear reactors and transmission systems would continue to be regulated by the Federal Energy Regulatory Commission or the Nuclear Regulatory Commission, but regulators remained unconvinced.

"PG&E's goal is clear. They want to transfer most of the utility's valuable assets to an affiliate company, at fire sale prices, so that they will no longer be subject to any state regulation. It is a deregulation plan, not a reorganization plan," said chief counsel Gary Cohen.

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