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

Enron California Trades Called 'Sham Transactions'

LCG, Apr. 12, 2002--According to Loretta Lynch, president of the California Public Utilities Commission, trades executed at rising prices between Enron and its affiliates in the fourth quarter of 2000 made the market for electric power seem more active and volatile than it actually was, and caused higher power prices in the Western states.

Lynch, speaking before a subcommittee of the Senate Commerce Committee, said that data supplied by Enron to the Federal Energy Regulatory Commission showed that 30 percent of trades by the affiliates took place with other such affiliates and subsidiaries of the company, including the New Power Company, Enron Energy Services, Enron Energy Marketing, Enron Power Marketing and Portland General Electric. The prices of the trades that Lynch alleged were "sham transactions" were posted on the EnronOnline trading system, and could have been considered a reference point by other market participants.

Other witnesses, such as energy analyst Robert McCollough, found that transaction data was not sufficient to determine conclusively that Enron's trades were the sole reason for higher prices, or that the trades did not have any relationship to the rest of the market. McCullough, however, found that a key off-balance-sheet partnership managed by Enron executives, LJM2, projected a much higher rate of return from an investment in an Oregon power plant site than Enron itself, suggesting that LJM2 either had "vastly more expertise than Enron, or ... foreknowledge of the events to come."

Sen. Barbara Boxer (D-Calif.) was of the opinion that Enron "used us a cash cow to keep that company afloat, keep the stock price high so insiders could cash out." Sen. Peter G. Fitzgerald (R-Ill.), consistent with remarks by some Republicans, said that California's deregulated market design was responsible for high prices, and that he was "skeptical" of Enron having an impact.
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