LCG Publishes 2024 Annual Outlook for Texas Electricity Market (ERCOT)

LCG, October 10, 2023 – LCG Consulting (LCG) has released its annual outlook of the ERCOT wholesale electricity market for 2024, based on the most likely weather, market, transmission, and generator conditions.

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LCG Publishes 2024 Annual Outlook for Texas Electricity Market (ERCOT)

LCG, October 10, 2023 – LCG Consulting (LCG) has released its annual outlook of the ERCOT wholesale electricity market for 2024, based on the most likely weather, market, transmission, and generator conditions.

Read more

Industry News

California Capsule: Cal-ISO's High Salaries, Bloated Budget

LCG, May 7, 2001The California Independent System Operator, that quasi-state agency that struggles to protect the integrity of much of the state's transmission grid by purchasing reserve power at the highest possible prices, comes by the talent naturally.

Cal-ISO purchases everything at the highest possible prices, and pays its managers the highest possible salaries. It is an indication of what the state's new power authority might look like. A new California Consumer Power and Conservation Financing Authority was approved by the legislature last Thursday and the bill awaits only the signature of Gov. Gray Davis before politicians and bureaucrats can start building a new empire.

The San Jose Mercury-News reported yesterday that Cal-ISO pays more for everything than any other grid operator in the U.S. It also apparently gets less. Terry Winter, the Cal-ISO chief executive, gets $550,000 per year, and probably needs it so he can feel good about himself. Self-esteem is an important consideration in California.

That half-million-plus is three times what Davis is paid, and Winter isn't doing three times as good a job as the governor. But he does have to oversee an army of highly-paid subordinates. Cal-ISO has more spear carriers than any similar organization in the U.S.

The Mercury-News noted that Cal-ISO has a six-year, $200 million contract for a custom fiber-optic phone system. It costs the agency about 10 times more than those at comparable agencies. It also is replacing its $15 million computer system even though it is only three years old. Glitches in the system caused Cal-ISO to delay opening for business for three months in 1998 and it has never done its job. The replacement will cost $9 million, but computers are getting cheaper everywhere.

"The cost of the ISO is, in my judgment, two to three times what it could be to do the same thing," James H. Caldwell, an energy consultant who compared costs in a 1998 study for the agency, told the paper. "It's just all really, really gold-plated."

ISO officials questioned why anyone would notice the high cost of phones, salaries and computers now that billions are being lost in the electricity market. Bring on the power authority.

  • "Consumers" will have standing in U.S. Bankruptcy Court as the fate of Pacific Gas & Electric Co. is decided, following appointment Friday of a nine-member committee made up of veteran advocacy groups who represent a variety of points of view. The panel was the result of negotiations among Linda Ekstrom Stanley, the U.S. trustee in the case, Nettie Hoge, executive director of Toward Utility Rate Normalization, and Harry Snyder, regional director of Consumers Union.
    Groups represented on the committee include the California School Boards Association, the California Farm Bureau Federation, the California Small Business Association and Small Business Roundtable, the California Restaurant Association, The California Manufacturers & Technology Association and the California City-County Streetlight Association.
    Nowhere on that committee does there appear anyone representing the millions of householders who will be hit hardest when PG&E's electric rates finally rise to meet the cost of what they purchase.

  • Davis has invited top executives of the power producers he has likened to the "biggest snakes on the planet earth" to meet with him in Sacramento Wednesday, but he's likely to be disappointed. El Paso Energy Corp. and AES Corp. said they would send someone, but it wouldn't be a top executive. Mirant Corp. said it was thinking the invitation over. Reliant Energy Inc. said its chief executive, Steve Letbetter, was tied up and it hadn't decided whether to send someone else. Duke Energy Corp. didn't say whether is would have someone at the governor's meeting, but a comment by Chief Executive Richard Priory at the company's annual meeting put its regard for California and its governor in perspective: "It's no different than if it was Ecuador or Peru and we had investment decisions to make in those countries."

  • For several months, state Senate President Pro Tem John Burton of San Francisco has been insisting that California get something in return for financial aid to utilities. He has called it getting "the hot dog," and it applies to the state takeover of transmission facilities belonging to Southern California Edison Co. in exchange for what lawmakers like to think of as a $2.76 billion "utility bailout."
    "We need power. We need electricity. We don't need a hot dog," said Assemblyman Joe Canciamilla, a Democrat from Pittsburg. "I think there is a consensus that people would like to be out of the energy business sooner, rather than later," said Assemblyman Joe Nation of San Rafael, also a Democrat.
    Canciamilla, Nation, Joe Simitian of Palo Alto and John Dutra of Fremont, all members of Davis' party, are working on an alternative to the governor's plan to take over SoCal Ed's wires, and it has become apparent that the transmission takeover is nearly dead. State Sen. Debra Bowen of Marina del Rey, chairwoman of the Senate Energy Committee, has said it would be better if SoCal Ed followed PG&E into bankruptcy.

  • But there are still militant Democrats in Sacramento. Leaders of both houses of the legislature said on Saturday they will sue the Federal Energy Regulatory Commission for refusing to impose price caps on wholesale power in the state. Though Davis is not party to the suit, his press secretary Steve Maviglio said he "is supportive of any effort to make sure FERC does its job."

  • Democrat leaders were expected to attempt today to pass legislation allowing the state to issue $12.5 billion in bonds for the purchase of electricity by the California Department of Water Resources. Because the legislature is in emergency session, a two-thirds vote would be required for approval, and that means Republican votes. If, as expected, the measure fails to get the necessary votes, Democrats plan to end the special session and take another vote.
    Legislation enacted during a special session takes effect immediately while ordinarily there is a 90-day waiting period for a measure to take effect. That means that tentative "bridge" loans would likely have to be scrapped or renegotiated. Davis promised that the state treasury would be repaid by June 30 for the $6.2 billion spent on power purchases since January. That promise won't be kept.

  • Davis announced on Friday that Sempra Energy Resources Inc., the energy marketing affiliate of San Diego Gas & Electric Co., had agreed to sell the state $7 billion worth of power under long-term contracts. The 10-year deal will provide 250 megawatts of power beginning June 1, and increase to 1,900 megawatts over the years. As with other contracts the state has signed, financial terms were not disclosed.

  • It was warm in California over the weekend, with temperatures in the 90s in the Central Valley and in Southern California. There is more of the same today, and at 10:00 a.m. PDT Cal-ISO declared a Stage 2 power emergency.

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