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

GAO Study Reveals CA Market Abuse

LCG, July 17, 2002-The U.S. General Accounting Offices released a study on Tuesday which found that California's flawed market design allowed electricity suppliers to charge unreasonably high prices during the crisis of 2000/2001.

The GAO study showed that frozen retail electricity rates kept demand high, and the California Public Utilities Commission's dissuasion of long-term contracts left utilities vulnerable to spot market prices. This situation allowed those selling power to hold out on sales until utilities were frantic to buy and had to pay higher prices than would result in a proper competitive market.

The study did show that prices at that time should have been above average due to low rainfall and limited reserves, but the actual prices during the electricity crisis were higher than would have come to pass in a properly executed market.

The GAO also said that price caps did not prevent high prices because they did not apply to other Western states and that companies buying power had no ability to mitigate steep prices because of faulty market design.

Another GAO report released earlier this month concluded that the Federal Energy Regulatory Commission did not have sufficient authority in controlling and policing electricity markets.

The Federal Energy Regulatory Commission is still investigating possible Western electricity market manipulation, and the Securities and Exchange Commission and the Commodity Futures Trading Commission are also investigating specific companies' market practices.

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