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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.

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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 Power Mess may Hit U.S. Taxpayers

LCG, Jan. 31, 2001Because the federal government used its emergency power to order generators of electricity to continue selling power to California utilities despite their impending insolvency, U.S. taxpayers may be stuck with the bill, the chairman of the Senate Energy Committee said this morning.

"In the event California cannot repay generators for this power, the federal government is going to have to meet that obligation, because this was an order of the federal government," Sen. Frank Murkowski said at a committee hearing on the causes of California's power problems.

When it became apparent that power suppliers, principally in the Pacific Northwest, would cease sending power to California, then-Energy Secretary Bill Richardson used his emergency powers to order the deliveries continued. The Bush administration has extended the order until February 7, but has warned that there will be no further extensions.

Murkowski also deplored the "not-in-my-backyard" attitude of Californians toward the construction of new power plants to meet the state's insufficiency of generation, which he said was a major cause of the mess. "Electricity does not appear magically at the plug," the Alaska Republican said.

No witnesses from the federal or state governments appeared at today's hearing, but those who spoke generally agreed that two major flaws in California's electric deregulation scheme caused today's crisis.

The first was creating a plan that lacked incentive for new sources of power to meet increasing demand. One witness noted that while Silicon Valley imports more than three quarters of its power, it has fought the building of new power plants within view of its own factories. That was an allusion to the City of San Jose and Cisco Systems objecting so far successfully to the development by Calpine Corp. of a modern, natural gas-fueled 600 megawatt power plant in a rural area near where Cisco is building a new facility.

The other flaw was allowing power producers to charge utilities market based prices for power while forcing the utilities to resell that power to its retail customers at rates which were fixed at 10 percent below the rates that existed at the time the restructuring law was passed.

No real attempt was made at the hearing to fix blame for the problem, it generally being realized that everybody involved shares responsibility. Steve Frank, chief executive of Southern California Edison Co., said "All of us, including the utilities, were not as insightful as we should have been about the way the market would work and the way demand and supply would get out of balance in the California economy."

Lawrence Makovich of Cambridge Energy Research Associates, told the panel "It would be a mistake to blame the problems in California on deregulation itself." He pointed to the difference between deregulation in California and Texas, where development of new power plants has been encouraged. In California, he said, "investment in new power supply (is) neither possible nor profitable."

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