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 Pans Pacific Northwest Utility Decisions

LCG, June 23, 2001--A Federal Energy Regulatory Commission administrative law judge has concluded that the high price of electricity in the Pacific Northwest was not the work of nefarious power producers but the result of bad weather and bad decisions by the utilities that paid the high prices.

Seattle City Light, Tacoma Power, the Port of Seattle, the Eugene (Ore.) Water and Electric Board and the North Wasco People's Utility District, blamed the need for the increases on bad weather and market manipulation in the California energy market, and had asked FERC to order refunds.

FERC Judge Carmen Cintron said the utilities could have done much to protect themselves and their customers from the effects of a drought which severely cut back hydroelectric production, but failed to do so.

Instead, she said, they bet unsuccessfully that power prices would be cheaper in the spot market than under long-term contracts they feared would lock them in to higher prices. At the time, spot market prices were lower than those charged by the Bonneville Power Administration under long-term deals.

Seattle City Light dumped 100 megawatts of Bonneville contracts and sold its 80 megawatt interest in the Centralia (Wash.) coal-fired power plant, a decision which left the municipal utility with a projected reserve of just 22 megawatts, or about 1 percent of peak demand. That reserve evaporated when hydroelectric generation in the region dropped by as much as half.

The utilities should be forced to suffer the consequences of decisions like that, Cintron said.

Cintron wrote "if the position of the refund claimants is accepted, they would be relieved of the consequences of their conscious economic decisions at the expense of a functioning competitive markets in which a vast majority of the purchasers during this period accepted responsibility for the choices they made."

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