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News
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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, 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
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Industry News
California Capsule: FERC Extends Flexible Caps
LCG, June 19, 2001The Federal Energy Regulatory Commission at its much anticipated meeting yesterday extended its April 26 "flexible" price caps order for wholesale power in California to cover ten additional states in the West and made the controls full-time instead of just during power emergencies.The controls peg power to a price based on the cost of generating electricity at the least efficient power plant operating in the market. Sellers can exceed soft cap prices, but face possible refunds if they can't justify those higher prices to FERC upon subsequent review.On April 27, a day after FERC's plan went into effect in California during power shortages, the California Independent System Operator declared a power emergency and triggered the price control plan for the first time. Prices immediately fell from $300 per megawatt-hour to $120 per megawatt-hour, and never rose above $135 for the rest of the day, according to FERC Chairman Curt Hebert.California Gov. Gray Davis said FERC's action wasn't enough. "Today, the FERC has finally taken a step in the right direction, but there is much more they should do," he said."For one thing, Californians have been overcharged billions of dollars for electricity. To date, we've not received one cent in refunds," Davis continued. "Secondly, this order may have some loopholes as the first one did. If that is the case, they need to be closed immediately."But other Democrats seemed more pleased by the federal regulators' action. "FERC has taken a step that may get wholesale energy prices under control and lead to a period of reliability and stability in the Western energy market," Sen. Dianne Feinstein said.Under yesterday's plan, the soft caps will be in effect whenever the ISO declares that reserves have dropped below 7.5 percent which, in California, means just about full time. The rest of the time in California and the 10 other states the allowable price will be 85 percent of the most recent soft cap figure.Some California officials criticized the plan because it allows efficient generators to make what they consider too high a profit. But Hebert pointed out that by rewarding the most efficient power producers, the plan will eventually weed out costlier operations, leading to lower prices generally.Complete details of the FERC plan were not made available yesterday but commissioners, who voted unanimously in favor of the soft caps, viewed the plan with guarded optimism. "This order moves sharply in a direction I have been advocating for eight months," said Commissioner William Massey, who has been openly critical of previous FERC orders for not going far enough to address California's problems.Commissioner Pat Wood, a new Bush appointee who is viewed as a likely candidate to become FERC chairman, said there is only so much the agency can do. "I think we will see the lights go out, due to a lack of investment in key infrastructure," he said. "There's nothing this commission can do that you have not already done."Davis Agrees to Buy SDG&E Grid AssetsGov. Davis and officials representing San Diego Gas & Electric announced yesterday that the state tentatively has agreed to purchase the utility's 1,800-mile transmission system as part of a deal that will wipe out $750 million of ratepayer debt accumulated since last summer because of high wholesale electricity prices.The purchase would cost the state $1 billion, or 2.3 times the book value of the transmission assets. In return, the utility would agree to drop its lawsuits against the state and provide low-cost power from its share of the San Onofre nuclear power plant for 10 years. California would also have the right to acquire about 16,000 acres of environmentally sensitive land along the Colorado River.Without the arrangement, Davis said, SDG&E customers would have faced balloon payments ranging from $400 for a typical householder to $12,000 or more for a medium-sized business."The balloon is burst," the governor said. "Under this agreement, the undercollection is eliminated, without any increase in rates. This is a massive benefit to San Diegans."Critics warn that the arrangement is not a done deal. It requires, as does a similar $2.76 billion deal with Southern California Edison Co., approval by the state legislature, and the SoCal Ed deal has been all but given up for dead in both the Assembly and the Senate.Reliant Denies Backing Anti-Davis AdsReliant Energy Inc., singled out by Davis for the worst of his vitriolic rhetoric, denied yesterday that it is behind a television advertising campaign attacking the mouthy governor for his mishandling of California's energy crisis.Production of the ads, which began airing yesterday, were paid for by the American Taxpayers Alliance, a group with close ties to the Republican Party, but it was unclear who paid for the airtime. Time Magazine said without details this week that Reliant and other major power suppliers had funded the commercials.Reliant denied that report, with spokesman Richard Wheatley saying "The only campaign I have knowledge about is the one we started about six weeks ago." The Reliant ads, appearing in print media, present the company's point of view on several issue surrounding the California energy crisis. Wheatley said similar television ads that would be "educational in tone" are likely to follow.So far, the industry has limited its advertising and public relations efforts to denials of wrongdoing and recitations of free-market philosophy.The anti-Davis ads flail the governor for failing to take adequate action, such as allowing long-term power contracts, while there was still time to head off the crisis. They were produced by Republican strategist Alex Castellanos, who has been called an "attack dog" by Democrats.The ads charge that while Davis has been "pointing fingers and blaming others," his PublicUtilities Commission appointees missed a chance last year to allow the big utilities to lock inlong-term contracts that could have avoided this year's spike in wholesale power costs.Almost a year ago, Duke Energy Corp. offered to sell power under long-term contracts for $50 per megawatt-hour an offer that was ignored by Davis.But Davis did not ignore the attack campaign, and was quick to accuse Reliant and other power producers of paying for the campaign."Californians find it galling that out-of-state generators who are charging us 800 percent more for energy than last year are reportedly running attack ads," Davis said in a statement yesterday. "If they think we're going to back down, they are dead wrong. We will fight back against out-of-control prices."
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UPLAN-NPM
The Locational Marginal Price Model (LMP) Network Power Model
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UPLAN-ACE
Day Ahead and Real Time Market Simulation
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UPLAN-G
The Gas Procurement and Competitive Analysis System
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PLATO
Database of Plants, Loads, Assets, Transmission...
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