Getting Hot - and Bothered - by the Possibility of High Prices This Summer

By Peter Kelly-Detwiler

On the first day of May, the Texas Senate Committee on Business and Commerce took up the issue of electric reliability and questioned Texas grid operators about their plans to deal with the coming summer. Recent media reports of declining reserve margins – driven by recent retirements of over 5,000 MW of electric generating capacity – have been warning of a potential perfect energy storm: expected record high demand, limited excess generating capacity, and heat that could drive prices towards the upper end of the $9,000 per megawatt-hour (MWh) range.

If all of those factors – excessive demand, tight reserve margins, and blistering heat - conspire at just the wrong times, we could see significant volatility in our electricity market with prices pegged out at on the high side.

Texas regulators approve Xcel's $1.6B wind expansion

Texas regulators approve Xcel's $1.6B wind expansion

As coal-fired power in Texas struggles to compete against gas-fired and renewable power, the planned addition of nearly 4,000 MW of wind capacity means it could exceed coal in Texas as soon as this year.

Xcel's Hale project in Texas and Sagamore facility in New Mexico will combine to provide 1 GW and are expected online in 2019 and 2020, respectively. Energy for the Bonita PPA with NextEra will be generated at facilities in Cochran and Crosby counties in Texas.

David Hudson, president of Xcel's New Mexico and Texas operations, said in a statement that the "new wind farms will help power a growing regional economy with clean energy while providing the lowest-cost generating resource on our system. Not only will these wind farms save customers money, but they’ll also preserve precious water resources and spur regional economic activity."

Xcel pursuing $65M power grid upgrades in northwest South Plains

Xcel pursuing $65M power grid upgrades in northwest South Plains

Xcel Energy is pursuing $65 million in power grid upgrades in Bailey and Lamb counties aimed at relieving overloaded lines and accommodating future economic expansion in the region.

Xcel announced on Monday that it has filed its upgrade plan with the Public Utility Commission of Texas for consideration in the near future in hopes of having new infrastructure in service within four years.

Kasey Coker, director of economic development for the Muleshoe Economic Development Corporation, said she was encouraged by Xcel’s investment in the region, which has seen its share of growth in recent years, including the ongoing development of a $250-million-plus dairy facility in Littlefield. The Continental Dairy Facilities and Select Milk Producers project began in 2016 and was expected to be completed later this year, according to an announcement from the dairy companies.

Xcel Energy: Blowin' in the Wind

Xcel Energy: Blowin' in the Wind

Some utilities are advantageously situated in service territories that boast strong renewable resources. With constructive regulatory relations, these utilities may be able to add wind and solar power to rate base without going the competitive route, suggests Ari Charney, editor of Investing Daily's Utility Forecaster.

Of course, few utilities are fortunate enough to have this kind of set-up. But one that does is longtime Income Portfolio holding Xcel Energy (XEL).

The Minnesota-based utility giant has an impressive footprint that spans eight states across the Southwest and Upper Midwest. But the vast majority of earnings is derived from regulated electric and gas utilities in just two states: Minnesota (43% of earnings) and Colorado (41%).

These geographies have enabled Xcel to become the biggest wind-power supplier among U.S. regulated utilities, with 6,700 megawatts (MW) of wind accounting for 21.3% of the utility’s electricity supply last year.

Is a Texas Town the Future of Renewable Energy?

Is a Texas Town the Future of Renewable Energy?

Dale Ross, the mayor of Georgetown, Texas, has a big smile, a big handshake and a big personality. In last year’s election, he won big, with 72 percent of the vote. The key to his success? “Without being too self-reflective,” he says, “I just like people.” He’s a Republican, and his priorities are party staples: go light on regulation, be tough on crime, keep taxes low. But the thing that is winning him international renown is straight out of the liberal playbook—green power. Thanks to his (big) advocacy, Georgetown (pop. 67,000) last year became the largest city in the United States to be powered entirely by renewable energy.

US utilities ask congressional leaders to lift cap on electric vehicle tax credit

More than three dozen US utilities this week asked congressional leaders to lift a cap on income tax credits for individuals who purchase electric vehicles, and industry observers differed Friday over whether the request should be granted.

Section 30D of the US Internal Revenue Code provides that beginning in 2010, for a purchase of a qualified plug-in electric vehicle with at least 5 kWh of capacity, an individual can receive a credit of at least $2,500. For each additional kWh of capacity in such a vehicle, an individual can receive an additional $417 tax credit, with a maximum tax credit of $7,500.

Steve Massengale talks Lubbock annexation and LP&L and ERCOT

Steve Massengale talks Lubbock annexation and LP&L and ERCOT

Friday on KFYO Mornings Lubbock City Councilman Steve Massengale joined Dave King and Matt Martin to discuss the previous nights city council meeting which included topics such as annexation, LP&L and ERCOT, and the Texas Tech Coliseum and Auditorium.

Many citizens came to the meeting to express their feelings and ask questions regarding the proposed annexations last night. Massengale said, "there was nobody there that spoke in support of annexations last night," going on to say, "there were a lot of legitimate questions." He talked about people's questions about taxes in these areas, whether they would be able to keep their animals, whether fireworks stands would be allowed, and more. However, Steve stressed that they were very vocal about the fact that they did not want to be annexed.

Fossil Fuels Squeezed by Plunge in Cost of Renewables, BNEF Says

Fossil Fuels Squeezed by Plunge in Cost of Renewables, BNEF Says

The economics of generating electricity from fossil fuels are deteriorating rapidly as renewable energy technology plunges in costs.

That’s the conclusion of a Bloomberg New Energy Finance report on the levelized cost of energy, a measure that takes into account the expenses from buying equipment, servicing debt and operating power plants using each technology. In most places, wind and solar will work cheaper than coal by 2023, the research group said Wednesday.

“Some existing coal and gas power stations, with sunk capital costs, will continue to have a role for many years, doing a combination of bulk generation and balancing,” said Elena Giannakopoulou, head of energy economics at BNEF. “But the economic case for building new coal and gas capacity is crumbling.”

Proposed Texas rule highlights storage's challenges in bridging competitive, regulated energy markets

Proposed Texas rule highlights storage's challenges in bridging competitive, regulated energy markets

Energy storage’s unique ability to act as both generation and load makes it a round peg in the square peg board of utility regulation.

That mismatch is destined to come into sharper relief as a rulemaking on energy storage in Texas moves forward, highlighting some of the contentious issues the technology raises in competitive power markets.

At the wholesale level, there is no problem installing an energy storage project in Texas. The state is already home to a number of storage projects, including the 2 MW Elbow Creek project deployed by NRG Energy and Toshiba in Howard County and the nearly 20 MW Texas Waves project near Roscoe that E.On brought online earlier this year.

 

Solar and smart homes converge in Texas

Solar and smart homes converge in Texas

Texas has made remarkable strides forward in recent months as a national leader in both solar energy adoption and smart home creation. The fifth annual Energy Thought Summit (ETS18) in Austin this month will gather industry, government and utility professionals to discuss not only these two technologies and their implementation, but also everything from the way autonomous vehicles will affect energy markets to how people will exist with artificial intelligence in an increasingly AI-driven world.

Solar energy adoption and smart home creation complement each other and together promise Texas homeowners added energy efficiency and new benefits in comfort, convenience, affordability and reliability.