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LCG Publishes 2025 Annual Outlook for Texas Electricity Market (ERCOT)

LCG, August 14, 2024 – LCG Consulting (LCG) has released its annual outlook of the ERCOT wholesale electricity market for 2025, highlighting the region's rapid transition toward increased reliance on renewable energy resources and battery storage.

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LCG Publishes 2025 Annual Outlook for Texas Electricity Market (ERCOT)

LCG, August 14, 2024 – LCG Consulting (LCG) has released its annual outlook of the ERCOT wholesale electricity market for 2025, highlighting the region's rapid transition toward increased reliance on renewable energy resources and battery storage.

Read more

Industry News

California Capsule: Davis Threat Angers State's Municipals

LCG, June 1, 2001California municipal utilities were up in arms yesterday over a threat by Gov. Gray Davis to seize their electricity if they didn't agree to sell their surplus power to the state at cost-plus prices or if the munis didn't cut power to their customers when the rest of the state suffers rolling blackouts.

Municipals from Redding in the north to Riverside in the south complained that such seizure would amount to a theft of public property that could force higher electric rates on citizens of communities that had the foresight to provide for their own electricity needs.

On Wednesday, Davis had accused the municipals of price gouging, having apparently forgotten that he had earlier in the week negotiated with Redding to purchase its surplus generation at cost plus 10 percent. Redding is one of the few municipal utilities in California with a significant generating capacity of its own. Most purchase their power under long-term agreements with the Western Area Power Administration and one of several public power agencies.

Matt McCabe, a spokesman for Alameda Power and Telecom, said of the governor's charge "It's not only untrue, it's unfair. It's not like we're raping and pillaging other electricity customers. We've worked very hard to do our part to support the state's electric system."

The Los Angeles Department of Water and Power, the nation's largest municipal utility, owns several conventional power plants, a network of hydroelectric facilities and a significant share of the Palo Verde nuclear power plant in Arizona it has power to spare and has sold its surplus to the state at prevailing market rates since last summer.

Jerry Jordan, executive director of the California Municipal Utilities Association, said that LADWP is the only municipal in the state that has any real surplus power. Most municipals frequently have small daily surpluses which they sell on the spot market, but they are more usually buyers on that market. "We're getting hurt by this market, just like everybody else," he said.

State Dodges Blackouts on a Very Hot Day
California came within minutes of rolling blackouts yesterday but they were called off when the California Independent System Operator found some last-minute supplies. The ISO had issued a one-hour warning at 2:30 p.m. and directed Pacific Gas & Electric Co. to prepare to shed load, but rescinded the order shortly before the blackouts were to take place.

Hot weather throughout the state had pushed demand beyond predictions and something like 10,000 megawatts of generation was off line for maintenance and repairs. Also, yesterday was the second day that a federal order aimed at stabilizing power prices in California was in effect, and may have had an effect on power availability.

Under an April 26 order by the Federal Energy Regulatory Commission, the ISO can pay in-state power producers no more than a price set daily based on the price of natural gas and the cost to operate the most inefficient plant selling power that day.

The ISO said it was too early to tell whether the order affected power supply or prices.

U.S. Senate to Look at Price Caps
With the defection of Vermont Sen. James M., Jeffords from the Republican party to independent, California Sen. Dianne Feinstein, a Democrat, is pushing for a speedy vote on a bill that would impose price caps on wholesale electricity.

While Democrats have no illusions about getting such a measure through the Republican-dominated House, they feel the pressure could force FERC to clamp down on the volatile wholesale power market.

New Mexico Sen. Jeff Bingaman, a Democrat, is slated to replace Republican Sen. Frank Murkowski of Alaska as chairman of the Senate Energy and Natural Resources Committee and is expected to be more amenable to government manipulation of economic forces.

In a recent interview, Bingaman said he thinks FERC ought to carry out its responsibility to protect consumers from price gouging but, "If Congress needs to pass something the further reinforce that requirement on FERC, we should do it."

Everyone Wants to be Exempt from Blackouts
Though the list of electricity customers exempt from blackouts is largely confidential, about half of the state's users have been exempted, the Sacramento Bee reported this morning, and today is the last day that a customer can apply for exemption.

Some have persuaded regulators to change the rules, some have changed their stories to fit the exemption standards, and some have gotten state legislators to propose laws just for them, the papers said.

Every addition to the list means that EnergyOnline Daily News is more likely to suffer a blackout.

"People who have political power or economic power are going to find ways of getting exempted," said California Public utilities Commissioner Richard Bilas. "It happens all the time."

Another commissioner, Carl Wood, estimated that there is room for fewer than 1,000 more institutions on the list. "At some point, you lose the ability to reliably have rolling blackouts," he said.

It is not difficult for those without political clout to figure that if half of the state's electricity customers are exempt, it means that they will suffer blackouts twice as often and for twice as long as they feel they should.

CPUC President Loretta Lynch said "We've been deluged at the commission by individual requests that do have a broader public interest." But not all requests can be characterized as being in the public interest.

Among those customers who feel they deserve an exemption is the San Francisco Giants baseball club. The team is not going good and needs pitching. Blackout exemptions will not help.

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