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

Northeast Releases Draft Model Rule for Regional Greenhouse Gas Initiative

LCG, March 24, 2006--The Regional Greenhouse Gas Initiative (RGGI) took another step forward yesterday with the release of the draft model rule, which sets forth for public comment the specific rules upon which to establish within each participating state a cap-and-trade program designed to reduce greenhouse gases and related concerns of global warming. The release of the model is a key action included in the Memorandum of Understanding (MOU) signed in December 2005 by the governors of Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York and Vermont (the "Signatory States").

Public comments on the draft model rule can be submitted until May 22. The final model rule is scheduled to be released in July 2006, and the launch date for the trading program is January 1, 2009.

The draft model rule targets reducing carbon dioxide (CO2) emissions from electric generators with capacities equal to or greater than 25 MW that burn primarily fossil fuels. Like the existing SO2 emission allowance market, if a company does not have sufficient CO2 allowances to cover CO2 emissions from its generators, it must either reduce annual emissions or purchase allowances from sources able to keep their emissions below their prescribed cap. Generators that sell less than 10% of the electricity they generate to the grid will be exempt.

The program includes allowance offsets to sponsors of approved CO2 emission offset projects, such as landfill gas capture and combustion, sulfur hexaflouride capture and recycling, converting non-forested to forested land, and projects to reduce fugitive methane emissions from natural gas transmission and distribution. Offsets may only be used to cover a small portion of CO2 emissions, e.g., initially up to 3.3% of CO2 emissions.

For offset projects located in Signatory States, allowances will be awarded on the basis of one allowance for each CO2-equivalent ton. However, for offset projects located outside the Signatory States, allowances will be awarded on the basis of one allowance for every two CO2-equivalent tons. If the spot price of CO2 emissions equals or exceeds certain triggers, then offset allowances may be awarded outside of the United States.

Each Signatory State will receive a specific allocation of CO2 allowances, and each state may then issue the allowances. The model rule provides for each state to allocate 25% of the allowances for a consumer or strategic energy purpose, such as the development of non-carbon emitting energy technologies. For the years 2009 through 2014, each state's CO2 budget will remain unchanged. The quantity of allowances will be stable from 2009 through the beginning of 2015, with a decline through 2018 that is designed to achieve a 10% reduction in CO2 emissions.

Massachusetts and Rhode Island had initially contributed to the development of RGGI but have elected not to sign the MOU. The MOU allows for these two states to opt back in prior to January 1, 2008 and encourages other states to join the program
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