79 posts categorized "Electricity"


Report: EFH bankruptcy near after creditor talks fail

The Wall Street Journal reports that Dallas-based Energy Future Holdings is preparing for a bankruptcy filing after months of talks with creditors have failed to produce an agreement on restructuring nearly $40 billion in loans. Citing unnamed sources, the newspaper said a last-minute deal is possible, but EFH is lining up debtor-in-possession (DIP) loans to keep its operations running during bankruptcy proceedings. The filing has long been expected, as the economics of the 2007 leveraged buyout of the former TXU Energy by big investors was torpedoed by the collapse in natural gas prices. The wholesale electricity market in Texas' deregulated markets is largely driven by the price of natural gas, the fuel behind about 40 percent of the state's power last year.

The Journal says a bankruptcy filing would also mean a split-up of EFH's operations. The company now includes: Luminant Generation, the state's largest electricity producer; TXU Energy, the largest electricity retailer; and 80 percent of Oncor Electric Delivery, the regulated utility that owns the poles and wires distributing power to most of North Texas.

-- Jim Fuquay


Luminant to bring back coal-fired plants ahead of schedule

Luminant Generation said it will bring three coal-fired power units back into production sooner than previously planned as higher Texas power prices make the units more economic. The big Dallas-based electricity generator had shut down the plants, located in East Texas, last fall, saying the state's low wholesale power prices didn't justify their operation. It will now bring back two units by Feb. 15 and a third unit by March 1. They have combined capacity of 1,880 megawatts.

Especially cold weather in Texas and much of the nation in recent months has driven up both the price of natural gas and of electricity in deregulated markets. Natural gas is the No. 1 fuel for generating electricity in Texas, but coal is close behind. "Power prices have risen in recent weeks following the rise in natural gas prices due to the cold weather across the nation that is increasing demand," Luminant spokesman Brad Watson said in a prepared release. "By bringing these units back online, we not only make more electricity capacity available for Texas' grid, we make more natural gas available for Texas and the rest of the nation that would otherwise have been used for electricity generation here."

-- Jim Fuquay



ERCOT looking at reducing its Texas power demand forecast

The state's largest power grid is considering a significant reduction in its 10-year forecast of electricity demand in the state, according to a preliminary report it released today. The move by the Electric Reliability Council of Texas could impact the current debate over whether Texas has enough electricity, a concern driving current efforts to give generators more financial incentive to boost power supplies.

Under a new forecasting model, ERCOT would trim its expected annual growth rate in peak electricity use to an average of 1.3 percent a year, compared to previous forecasts that were as high as 2.5 percent a year. ERCOT said the change reflects the fact that "the relationship between economic growth and electric demand has changed in recent years," with peak demand growing slower than the economy. The new forecast addresses this "decoupling," according to a summary of the changes posted on ERCOT's web site. That report is available here, and includes links to additional background on the matter.

ERCOT spokeswoman Robbie Searcy said the changes are being reviewed by various stakeholders. The other important part of ERCOT's outlook, its latest forecast of the supply of available power generation to meet demand, could be released in late February, she said. A lower demand outlook would indicate that the supply could also grow less and still maintain a good reserve margin. The Public Utility Commission has been debating changes to the state's deregulated electricity market in an effort to make sure generators have enough financial incentive to add new capacity and avoid power shortages in the future. 

-- Jim Fuquay


ERCOT: Electricity use up 2.1 percent in 2013

The state's biggest power grid said electricity use was up 2.1 percent last year compared to 2012, as coal-fired capacity rebounded. The Electric Reliability Council of Texas, which carries about 85 percent of the state's electricity demand, said power plants that burn coal provided 37.2 percent of that electricity, up from 33.8 percent in 2012, a year that saw particularly low natural gas prices. Natural  gas-fired units provided 40.5 percent of the power in 2013, down from 44.6 in 2012. Wind power set another new high in 2013, providing 9.9 percent of total electricity consumed, up from 9.2 percent in 2012 and just 4.9 percent in 2008.

ERCOT said total demand was 324,859,701 megawatt-hours for all of 2013. A typical Texas residence uses about 1,500 kilowatt-hours a month, or about 18 megawatt-hours a year. Summer demand peaked at 67,245 megawatts, up 1 percent from 2012 but below the record peak of 68,305 megawatts in 2011. A megawatt is about enough to power 200 Texas homes during a period of high demand, typically a hot summer day when air conditioners work hard.

-- Jim Fuquay


Texas sets new winter electricity demand record

The state's largest power grid saw record peak consumption in the hour ending at 8 a.m. Tuesday morning, the Electric Reliability Council of Texas said today. The new high of 57,277 megawatts narrowly topped the previous record of 57,265 megawatts on Feb. 10, 2011. Unlike during the 2011 peak, however, the grid had adequate generation capacity online to meet demand as still maintain its desired reserve margin. On Monday the unexpected loss of several generating units pushed the grid to its limit, as ERCOT's operators took emergency measures to curtail demand but did not have to implement rotating blackouts, its most severe response to a threatened power shortage.  Texas summer peak is about 10,000 megawatts higher than the winter peak. A megawatt is roughly enough electricity to serve 200 typical Texas residences during a period of peak demand -- typically a hot summer day when air conditioners are humming -- and about 500 homes during mild weather.

"There was sufficient generation available Monday evening and Tuesday morning to serve expected needs and maintain the desired level of operating reserves, even with demand exceeding Monday’s 55,487 MW morning peak and 56,031 MW evening peak. Peak demand in winter weather typically occurs between 6 and 9 a.m. and 4-8 p.m.," ERCOT said in a news release. It said it had discontinued a Conservation Alert that began Monday, "when high demand and sudden electric generation outages in the early morning hours caused operating reserves — the electricity available on the system in excess of what is currently being used — to drop below the 2,300 MW trigger for an Energy Emergency Alert."

 “We appreciate the consumer response to our conservation request yesterday, as well as the steps generation and transmission companies in the ERCOT region have taken to prepare for today’s power needs,” said Dan Woodfin, director of System Operations. Consumers can follow ERCOT's operations and alerts with a free app available for Apple iOS devices and Android devices, available at their respective online stores.

-- Jim Fuquay



Texas power grid came close to rotating outages, ERCOT says

The state's biggest power grid could have been forced to implement rotating outages if one additional generator of significant size had gone off-line Monday morning amid unusually cold weather, the Electric Reliability Council of Texas said. As heating demand rose around the state, several big generators went down unexpectedly, forcing ERCOT to take steps to trim demand. Those steps included curtailments to big users that had previously agreed to reduce their consumption when necessary. That's the second stage of a three-stage emergency alert system, the third of which is rotating outages.

In a conference call with reporters, ERCOT's director of system operations, Dan Woodfin, said 3,700 megawatts of  expected electricity supply was not available this morning. About half of that  was due to weather-related problems at two big north central Texas generators, he said. "Both were related to freezing of instrumentation used to provide control of the plants," Woodfin said. The units were not identified.

At the same time, ERCOT took the unusual step of importing power from outside its system, which covers about 75 percent of the state's area and serves about 85 perent of its demand. ERCOT, which otherwise is self-contained, has a few ties to other power grids, and it imported about 800 megawatts from the U.S. eastern grid and about 180 megawatts from Mexico, Woodsin said. ERCOT last experienced rotating outages in February 2011, also when cold weather pushed demand higher. But that time, he said, numerous generators failed to stay online to supply power, many because of cold-related problems with instrumentation. He said the implementation of "best practices" standards for weatherization of Texas power plants were adopted in the wake of those outages, and he thought the relatively low number of generators that had issues Monday showed that the state had improved its ability to avoid cold-related problems.

Reuters reported that output at Luminant's Comanche Peak 1 nuclear reactor in in Glen Rose was reduced early Monday for repair of a heater drain pump, citing nuclear regulators. Luminant officials were not immediately available to comment on the status of the 1,209-megawatt unit. It's not clear if the issue was weather-related. Luminant is a subsidiary of Dallas-based Energy Future Holdings and is the state's largest power producer.

-- Jim Fuquay



Texas deregulated electricity rates dip below U.S. average

Electricity rates paid by residential customers in deregulated Texas markets last year were below the national average for the first time in a decade, according to a new report. The Texas Coalition for Affordable Power, which has long criticized deregulation of the state’s retail power market in 2002, said it’s the fourth straight year that electricity prices have fallen. The group said that in 2012, Texas consumers in deregulated markets paid an average of 11.75 cents per kilowatt-hour, compared with 11.88 cents nationally.

“Residential electricity prices under deregulation continue trending in the right direction. But prices are still higher than power customers pay in areas of Texas not subject to deregulation,” said Randy Moravec, TCAP’s executive director. “This analysis shows there’s still plenty of room for improvement under our deregulation law.”

Texas electricity rates shot up along with the cost of natural gas until 2008. Then gas prices plunged, taking electricity prices with them. Natural gas drives the wholesale price of power in the state because gas-fired generators provide the bulk of peak demand. Texas markets that remain regulated and those served by municipal power companies and co-ops don’t follow the same pricing model, and their rates on average were lower than those in deregulated markets, TCAP said.

In 2012, residential customers with regulated, muni and co-op service paid an average of just under 10 cents per kw-h, according to the study. TCAP said the difference between Texas regulated and deregulated rates in 2012 amounted to more than $280 for an average residential customer and $1.5 billion for the entire state.

While consumers in deregulated areas who comparison-shop at PowerToChoose.com can buy power for less, TCAP noted that many consumers have remained with legacy power companies, such as TXU Energy in North Texas. Those providers generally charge more, the study says. TCAP’s study used data from the U.S. Energy Information Administration, which surveys rates paid by customers of utilities and other electricity retailers. TCAP’s members are 168 cities and other governmental buyers of electricity.

-- Jim Fuquay


Luminant agrees to pay $750,000 in settlement with PUC

Dallas-based Luminant, the state's largest electricity generator, has agreed to pay $750,000 to settle regulators' complaints that it failed to meet its obligations during a February 2011 cold snap that produced rotating blackouts. About 8,000 megawatts of generation was lost around the state as exceptionally low  temperatures and wind chill factors affected power plants. In April 2012 the staff of the Public Utility Commission of Texas recommended fining Luminant for its performance in 2011, saying five of 10 generators didn't meet instructions from the state's largest power grid to bring electricity online. Other participants in the Electric Reliability Council of Texas also have been fined for their performance in the outages, but Luminant's settlement, in which it admits no violations, is by  far the largest, said PUC spokesman Terry Hadley.

"Since 2011, Luminant has joined other generators, electric transmission firms and state agencies to take measures to better prepare for future extreme weather," Luminant spokesman Brad Watson said in a prepared statement. " Some 225 generation resources in ERCOT, more than 40 percent of the total generation, experienced a trip, failed start or derate," Watson said. "With this settlement, Luminant resolves all alleged violations of ERCOT protocols and PUC rules from the cold weather event in 2011," he said.

The Sierra Club, in a news release, said it hoped "this rather modest fine will send a message to Luminant and other coal and gas generators that when they are paid money by ERCOT to be available in times of emergency -- such as the freeze of February 2011 -- they must be available." 

Jim Fuquay



Municipal groups knock proposed changes in Texas power market

A state group that includes many cities and municipalities says in a new report that proposed payments to electricity generators aimed at ensuring enough power could cost consumers billions annually, but not necessarily bring more generation online. The Texas Coalition for Affordable Power and Steering Committee of Cities Served by Oncor commissioned the report. It follows a 2-1 vote in October by the Public Utility Commission of Texas to mandate a minimum reserve margin -- a desired excess of capacity over projected demand -- on the state's largest power grid. The PUC will wait until a January report by a national consultant before setting the margin.

Currently under Texas deregulated electricity market, generators are paid only when they sell power. That's called an "energy only" market. Under a mandated reserve margin unspecified payments would be made to generators to providing capacity. That's called a "capacity" market. Electricity generators in the state have struggled with low wholesale power prices in recent years and support the mandated margin and payments. In February the Austin office of Public  Citizen estimated the cost at $1.2 billion to $2.3 billion. Another study put the cost at $3.6 billion a year.

"With these subsidies, generators would be paid simply for existing," said Jay Doegey, Arlington's city attorney and chairman of the Steering Committee of Cities Served by Oncor. "These very expensive proposals will almost certainly lead to higher electricity prices. What's unclear, however, is whether these subsidies really are necessary and how Texas consumers would ever benefit from them." Oncor Electric Delivery is the principal utility that distributes electricity in North Texas.

A link to the groups' report is here.

-- Jim Fuquay


Luminant tells regulators it's suspending Comanche Peak expansion

Dallas-based Luminant Generation has told federal regulators it will suspend its quest for a license to expand its Comanche Peak nuclear plant in Glen Rose, southwest of Fort Worth. Luminant cited reactor partner Mitsubishi Heavy Industries' decision to focus its efforts on restoring nuclear power in Japan, where reactors were idled following the 2011 Fukushima accident. Both companies also said economic conditions, including the low price of wholesale power in Texas, played a role. Mitsubishi Nuclear Energy Systems had been working to gain U.S. certification of the reactor design that was going to be used at an expanded Comanche Peak. The plant currently has two reactors, and Luminant in 2008 announced plans to add two more.

In a letter to the U.S. Nuclear Regulatory Commission, Luminant said that "while Luminant preferred for MHI to continue" to pursue certification of its reactor, "that alternative does not appear viable given MHI's other priorities." The letter, dated Thursday, goes on to say that Luminant "concluded that it does not make sense to continue to expend Luminant or NRC resources" on the work toward a new license. Work on the Comanche Peak expansion had already been delayed by the financial woes of Energy Future Holdings, Luminant's corporate parent, and Texas' power prices that have been driven down by cheap natural gas.

Two Texas opponents of the Comanche Peak expansion on Friday said the decision "shows that the so-called nuclear renaissance has fizzled." Karen Hadden, executive director of the Sustainable Energy and Economic Development (SEED)  Coalition, said the delay clears the way for safer, cleaner and more affordable renewable energy in Texas." Tom “Smitty” Smith, director of Public Citizen’s Texas office, said "it was long believed EFH was keeping these licenses alive because they would be valuable assets in bankruptcy.  This stunning decision shows how little bankers on Wall Street value nuclear power." 

-- Jim Fuquay


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