EIA Publishes Regional Electricity Supply and Pricing Forecasts Using UPLAN Model

LCG, August 13, 2019--The U.S. Energy Information Administration (EIA) announced that it is revising the presentation and modeling of its forecasts for electricity supply and market hub pricing to better reflect current electricity markets and system operations in the U.S. Beginning with the August 2019 Short-Term Energy Outlook (STEO), the new forecasting approach models electricity markets using the UPLAN production cost optimization software developed by LCG Consulting. EIA uses the solution results provided by this proprietary model to develop the STEO forecasts of monthly electricity generation, fuel consumption, and wholesale prices.

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Dominion Energy Virginia Pursues 500 MW of Renewable Projects

LCG, August 8, 2019--Dominion Energy Virginia announced Monday that it is seeking bids for up to 500 MW of renewable capacity in both 2021 and 2022 to increase its clean energy resources. Dominion Energy stated that it is committed to having 3,000 MW of solar and wind in operation or under development in Virginia by 2022. This near-term step is part of an ultimate company commitment to reduce carbon emissions by 80 percent by 2050 across the 18 states it serves.

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Industry News

California Capsule: Power Authority Bill Goes to Governor

LCG, May 4, 2001The California legislature yesterday approved a bill that would create a state power authority and, following a 24-14 vote in the state Senate, sent the measure to Gov. Gray Davis for his signature.

Supporters of the legislation say it will give California more control over the wholesale electricity market by enabling the state to build, own and operate power plants just like other Third World countries.

State-owned power plants could be built using tax-exempt financing and would be able to charge lower prices, backers of socialized electricity say.

A new California Consumer Power and Conservation Financing Authority could issue up to $5 billion in revenue bonds to pay for generating facilities, conservation programs, natural gas pipelines and storage facilities, and other pieces of energy infrastructure.

State Sen. Steve Peace, the Southern California Democrat who was the main architect of the state's failed electric deregulation law, said the authority is needed because the 1996 act failed to create competition and the Federal Energy Regulatory Commission has failed to use price controls to rein in soaring wholesale power prices.

Forgetting for a moment who was chairman of the joint legislative committee that made sure the restructuring act would work, Peace called that law "the economic equivalent to the World Wrestling Federation." He said "The wrestlers follow a script and the referee, FERC, ensures it's entertaining, but it's not real competition."

Opponents of the authority say California should create a truly deregulated electricity market, unencumbered by government attempts to protect people from themselves. "Some of the most feared words in the English language are 'I'm from the government and I'm here to help you'," said Republican state Sen. Bill Morrow.

Others see the authority as putting the state into the power market where it doesn't belong and say it will likely deter private capital from investing in much-needed generation. They also express concern over a provision of the bill that would allow the state to seize privately-owned power plants by eminent domain. "That would ensure that California pays top dollar for plants it doesn't know how to operate," said one.

There is a never-ending supply of news from the somewhat tarnished Golden West.

  • Duke Energy Corp., accused of attempted bribery after sending Gov. Davis' lawyer a letter suggesting ways to end what it regards as persecution by state politicians, has released details of its offer. What it boils down to is, drop your lawsuits, quit calling us name and stop the investigations, and we'll refund some money, forgive a few debts and help you get the state out of its self-inflicted power crisis.
    Duke said it would refund some of the money state politicians say the company extorted from power-desperate Californians, making an "appropriate payment" based on a fair estimate of the alleged overcharges. Duke would also "forgive" some of the money owed to it that represents a credit risk charge, if it is paid for the power covered by the charge.
    "We have done nothing illegal," said Duke spokesman Tom Williams. "We're ready to get on with it and solve the problem."
    But Duke wants the governor to tone down the rhetoric and rhetoric so far has been the governor's only response to the high price of wholesale power.

  • Secretary of State Bill Jones, the only Republican to hold statewide office in California, yesterday offered his plan to solve the state's energy crisis, and in the process accused Davis of creating "massive debt while socializing the delivery of power." That was before the legislature voted to socialize its generation as well. "California should not be in the energy business period," Jones said in a letter to Vice President Dick Cheney.
    "California is on the brink of insolvency," Jones said, predicting the governor's initiative to have the state purchase power for its cash-strapped utilities will run more than $66 billion into the hole.
    Key elements of Jones' plan include:
    • Power producers would forgive between 25 percent and 33 percent of the more than $14 billion owed them by Pacific Gas & Electric Co., Southern California Edison Co. and San Diego Gas & Electric Co. and in return would get quick payment of the balance.LI>The holding companies for the three utilities would pump back into them enough money to cover between 25 percent and 33 percent of their debts.
    • The three utilities themselves would accept reduced payment for the power they produced in the plants they still own and sold to themselves at high prices through the now-defunct California Power Exchange.
    • The state would make low-interest loans to the utilities to cover any remaining power purchase debt.
    Jones' plan would take the state out of the business of purchasing power, scrap plans for the state to purchase transmission facilities, eliminate market bidding practices that have driven up the price of electricity and encourage the utilities to build more power plants for themselves.

  • PG&E yesterday filed a motion in federal bankruptcy court asking that the California Independent System Operator quit billing it for power the grid manager purchases at top dollar in the spot market. The utility's motion, which includes a request for a preliminary injunction, asks the court to prevent the ISO from requiring the company to pay costs incurred by the ISO unless PG&E is allowed to recover those costs from ratepayers.

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