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

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: Lynch Says Evidence Points to Collusion

LCG, May 18, 2001Loretta Lynch, president of the California Public Utilities Commission, said yesterday she has evidence that independent power producers shut down their plants to create "artificial shortages" and drive up the wholesale price of electricity in the state.

The Los Angeles Times reported this morning that Lynch, working with state Attorney General Bill Lockyer, is investigating patterns of plant outages that have occurred when the California Independent System Operator has warned of energy shortages.

"There are instances where plants could have produced, and they chose not to," Lynch told the Times, "And it is clear that there are instances that plants, when called to produce, chose not to produce." Lynch said the investigation has produced enough evidence for the CPUC and the attorney general's office to take legal action against the companies next month.

Gary Ackerman, spokesman for the Western Power Trading Forum which is a trade association of large power producers, termed Lynch's allegations "the height of idiocy" and said the reason plants have been off line recently is their owners are working to get them in shape for what is expected to be a long, hard summer.

The Times noted that one power producer was paid $1,900 per megawatt-hour for electricity last week and quoted Lynch as saying "I would argue it's no accident. That, in fact, it's the coordinated behavior of a cartel."

Reliant Energy Inc. said it was the company that charged $1,900 per megawatt hour and it was surprised that anyone paid it. The company said it bid the power from one of its units at that price hoping no one would be silly enough to buy the power. It wanted to keep the unit off line to work on it.

Ackerman said he doubted investigators could prove any wrongdoing because there was no conspiracy. "My members do not make money by shutting down their plants so their competitors can make money," he said.

The Times said it checked state figures and found that about 12,000 megawatts of generation has been off line throughout the last two month, about half for scheduled maintenance and half with forced outages.

Davis Attacks Bush Energy Plan
California Gov. Gray Davis lashed out at President Bush yesterday saying the administration energy plan "turns a blind eye to the bleeding and hemorrhaging that exists in this state." Davis was unhappy that the energy policy did not promise price caps on wholesale power in his state.

Davis accused Bush of "allowing the price gouging energy companies, many of whom reside in Texas, to get away with murder." The governor repeated his plea for price caps, saying "If (Bush) wants to be helpful to California, he could send a strong signal that the Federal Energy Regulatory Commission should grant some kind of relief."

The president said "I'm deeply concerned about the impact of blackouts on the daily lives of the good people of the state of California, and my administration is committed to helping California."

Davis conceded that Bush's "long term approach is basically on-track, but for those of us who are in immediate peril, it offers no relief."

Municipals Want Protection from Blackouts
Some California municipal utilities are seeking federal protection against rolling blackouts that threaten to engulf the state this summer. Others say that they have certain obligations as parts of the overall state electric system.

Municipal systems in Los Angeles, Burbank, Glendale and the Imperial Valley are independent from the state transmission grid but others, including the big Sacramento Municipal Utility District and more than a score smaller systems are required to provide power to the California Independent System Operator when it is needed to protect system integrity.

The small Los Angeles County community of Vernon has asked FERC to exempt it from that requirement. Like other municipals, it figures it went to the trouble to ensure that it has adequate power supplies and should not be penalized because the rest of the state did not.

Tom Evans, director of utilities for Riverside, said "We believe our power was purchased for the citizens of Riverside and that we don't have the right nor does anyone else to take it away from them when they need it."

FERC set today as a deadline for other municipals who want to join Vernon in its petition. About half of the state's munis 15 out of 30 are expected to file their own petitions or join Vernon. Anaheim probably won't be among them.

Marcie Edwards, general manager of Anaheim Public Utilities, said the summer power crunch is not entirely the fault of investor-owned utilities and said the municipals have an obligation to support the state's transmission grid.

CPUC to Review Power Use 'Baselines'
The mysterious "baselines" that will affect how much of a rate increase residential electric customer in California will pay have proved impossible to explain to those customers, the CPUC admits, and will be subject to a review by the commission.

The baselines were created in 1982 as a sort of "lifeline" amount of power a householder would get at the lowest possible prices. They are supposed to represent between 50 percent and 70 percent of the average householder's usage for each climate zone.

However, the baselines do not take into consideration the size of a household or changes in the way people live. For example, the baselines have not been recalculated for five years, during which time use of computers in homes has increased five-fold.

Under the $5.7 billion electric rate increase approved Tuesday by the CPUC, customers who use 30 percent more that their baseline will see dramatic increases in their monthly electric bills.

Commissioner Carl Wood said "We have known for some time that we have a problem here. I think it's appropriate to look at it now that going over the baseline is getting so expensive." Wood, who placed the matter on the agenda for the next CPUC meeting, said he want to find out whether the climate zones are still accurate.

"We might also want to look at how many people live in a house," Wood added.

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