* Advises higher price cap, only during extreme conditions
* Sierra Club criticizes push for higher wholesale prices (New throughout, adds Sierra Club, generator comment, details)
HOUSTON, June 1 (Reuters) - The current design of the wholesale power market in Texas will not encourage needed investment in new power plants, the Brattle Group consultancy said in a report commissioned by the state electric grid operator.
Texas electric regulators and the grid agency that oversees the $34 billion deregulated wholesale market are working to encourage construction of new generation in the state, which has little ability to import power from its neighbors.
Unlike many areas of the United States, electric demand in Texas continues to grow because of the state's healthy economy.
"Electric reliability matters to all of us and we must remain focused on the central question of whether we are doing enough to guarantee an adequate power supply," said Craven Crowell, chairman of the Electric Reliability Council of Texas.
ERCOT, which oversees the grid for most of the state, has warned that the prospect for rolling blackouts in future years will increase as the power supply is unable to keep pace with growing demand.
Low wholesale prices and tight financial markets have stalled development of new generation in Texas even as more stringent environmental rules threaten to shut older coal- and gas-fired plants over the next few years.
Last summer's protracted heat wave, which triggered record electricity demand and six emergency declarations from ERCOT, intensified the need to address the state's shrinking power reserve margin, the cushion needed to avoid blackouts.
Regulators and state lawmakers are expected to use the Brattle Group report to address long-term resource adequacy.
It did not recommend a specific course of action to alter ERCOT's "energy-only" market, which pays generators only when they produce power, but outlined five options along with advantages and disadvantages of each.
Options included keeping the energy-only design, but adding a market-based reserve margin; higher prices to support a target reserve margin; or a back-stop procurement process to maintain minimum acceptable reliability.
Other options included a mandatory resource adequacy requirement for companies that supply power to customers, or a resource-adequacy requirement with a centralized forward capacity market.
While the Texas Public Utility Commission has resisted calls to create a capacity market similar to those used in other U.S. power markets, the Brattle report worked to address a number of criticisms that capacity markets simply boost overall costs but may not attract new power plants.
The PUC and ERCOT have already implemented a number of market changes, including raising the price cap on wholesale power when supplies are scarce, to encourage construction of new power plants.
"The Brattle Group's report confirms that we are moving in the right direction," said Donna Nelson, PUC chairman.
The Brattle Group report advised ERCOT to increase the price cap to $9,000 per megawatt-hour from $3,000 MWh, but only in times of extreme scarcity when power to customers is being curtailed.
It warned that simply increasing scarcity prices will not attract more generation.
"Many market participants that were supportive of the commission's actions so far were wary of the prospect of raising caps much higher," the Brattle Group said.
The Sierra Club criticized the report for failing to look at energy efficiency and conservation options where customers are paid to reduce power use when supplies are strained.
"Instead of using our money to build more coal and gas plants, the PUC should implement their rules proposed to raise energy efficiency goals," said Cyrus Reed, conservation director of the Lone Star Chapter of the Sierra Club.
Reed also called on the state to increase use of renewable power, such as solar. Texas is already the No. 1 state for wind generation.
The Brattle report said growth of wind power in Texas has depressed wholesale prices to the point that generators cannot justify investment in new gas-fired power plants.
Energy Future Holdings, parent of the Luminant, the state's largest power producer, said the report will help regulators and the industry solve the resource question.
"We join the PUC, ERCOT and the other stakeholders who are reviewing Brattle's input as we all seek to ensure that sufficient electricity resources are available to meet our growing economy in Texas," the company said in a statement. (Reporting by Eileen O'Grady in Houston; Editing by Lisa Von Ahn, Tim Dobbyn and David Gregorio)
Wellfleet seafood purveyor buys wholesale shellfish company - Abington Mariner
Mac’s Seafood is branching out in search of a bigger market for the shellfish that has made this town famous.
Mac’s Seafood, which was started as a single retail store on Wellfleet’s pier in 1995 by Mac Hay and his brother Alex Hay, has grown to include two markets, one in Truro, the other in Eastham, a certified wholesale processing facility in Truro, and now, as of last month, the Wellfleet Shellfish Co., with its 5,000-square-foot processing plant in Eastham.
Twelve Wellfleet shellfishermen, including Jim Connell, Bob Wallace and Barbara Austin, formed the Wellfleet Shellfish Co. in 2001. It has been selling up to four million clams and oysters yearly nationwide.
Alex Hay, who has been running the Eastham processing plant, located off Holmes Road, since the sale went through, said he and his brother “have been talking to the owners of Wellfleet Shellfish Company for quite some time about getting involved and helping them market the business a little bit more.”
That talk met receptive ears last month, when the owners of Wellfleet Shellfish agreed to sell their company to Mac’s Seafood.
Since then, Alex has been putting in long days at the Eastham plant, which has two 4,000 gallon tanks filled with ice and with hard-shell, soft-shell, steamers and scallops that are placed there to be purged of sand and grit.
When Wellfleet’s famous oysters come in, staff culls them, taking out the small irregular ones, and putting the others in the cooler where they can be bagged up for shipment around the world.
Sam Bradford, cousin to Mac and Alex, and chief financial officer for Mac’s Seafood, said he and his cousins “have our hands full trying to manage the merger of operations, but we are really excited about our potential to get more product and more oysters moving through that place and Wellfleet Harbor.”
Bradford said everyone “seems to be happy that this transition is taking place. The fishermen seem happy with the changes we are making and I think it will a great thing.”
Alex said while Mac’s Seafood has acquired Wellfleet Shellfish Co., both names will still remain.
He said in recent years, “the wild fishery has given Wellfleet a bad name since the wild harvesters have a tendency to pick stuff that is not very desirable. What we will try to do is rebrand the Wellfleet oyster with our company as the Wellfleet Shellfish Company and Mac’s Seafood that sells this high quality oyster. I think it will take a little time to get the supply volume back, but there is a lot of good stuff out there now and we are working with hundreds of shellfishermen.”
Andy Koch, Wellfleet shellfish warden, and a former shellfishermen, said he thinks the 12 shellfishermen who started Wellfleet Shellfish Co. wanted to make sure they had a place to sell their product. They probably sold “because they realized it was not a cash cow.”
Connell, one of the founders, said in press release said, “It’s difficult to mind the farm and the shop at the same time.”
With this purchase, said Alex, Mac’s Seafood’s staff would be more than 200, with the full-time employees living in Wellfleet, Truro and Eastham. With summer approaching, they will have 10 to 12 working around the clock at the Holmes’ Road plant packing orders to go out by truck and Federal Express to their customers.
In addition, Mac’s Seafood will soon have a new website. “We are hoping that new look will spark a huge increase in our web sales,” he said. “We have plenty of business in the summer. We are trying to make it a 12-month business, and keep a year-round full staff.”
Texas May Triple Power Prices to Avert Summer Blackouts - Bloomberg
Texas, the biggest electricity consumer in the U.S., faces a shortage of power to fuel its growing economy that may force the most extensive overhaul of the state’s competitive market since deregulation in 2002.
Texas utility commissioners and grid operators are studying whether to allow the nation’s highest peak wholesale power prices to triple, part of a bid to encourage power-plant construction and avoid blackouts as early as 2014.
Falling natural-gas prices exposed a flaw in deregulated electricity markets for Texas and 12 other states that rely on the competitive model. Wholesale power prices, tied to the cost of gas, have fallen more than 30 percent since 2008, making generators reluctant to invest billions in new plants that would be subject to price swings and uncertain returns.
“This issue is what we call in the business the ‘missing money problem,’” said Shmuel Oren, an engineering professor at the University of California in Berkeley, who helped advise Texas on deregulating its market. “Prices of electricity are not high enough to pay for the fuel and also cover the investment in generation capacity. Business people are looking at this and they’re deciding it is not a profitable business.”
In regulated markets, state officials determine power prices, shielding consumers from rate spikes while ensuring utilities a certain level of profit for maintenance and construction projects. A deregulated market like Texas follows a competitive model, allowing supply and demand to set prices as producers and sellers vie for customers.
Not Profitable
A deregulated market requires companies to be more efficient to maximize profits while keeping prices competitive enough to win customers. It also makes it harder for generators to justify building new plants that may not be profitable for many years.
Deregulated markets New Jersey and Maryland have offered subsidies to power producers to jump-start new projects. PJM Interconnection LLC, the coordinator of wholesale electricity supplies in 13 states from Virginia to Illinois, holds capacity auctions to set prices for projected demand three years in advance to assure generators enough revenue to help finance building.
Texas so far is meeting growing demand with a market-driven approach that uses higher prices to force consumers to conserve and, in theory, spurs generators to finance new plants. Prices are raised during times of peak demand, such as hot summer days, so that generators can make more money to compensate for lower prices the rest of the year.
Bills Rising
Energy Future Holdings Corp., NRG Energy Inc. (NRG) and Calpine Corp. (CPN), the state’s largest power generators, would benefit from the higher prices. Critics say Texas is setting up consumers for skyrocketing power bills without any assurances that plants will actually be built.
In 2006, the Public Utility Commission of Texas raised its cap on wholesale power prices to $3,000 a megawatt hour. The Federal Energy Regulatory Commission, which doesn’t have oversight of the state’s grid operator, caps pricing in other parts of the country at $1,000 a megawatt hour.
Last year, power prices touched $3,000 a megawatt for a total of 28.5 hours, mostly amid extreme weather conditions in August and February, said Daniel Jones, vice president of Potomac Economics Ltd. in Austin, Texas, the company that serves as the state grid’s independent market monitor.
“It’s more than we had in prior years,” he said.
Tripling Prices
To attract new power plants, state regulators have proposed raising the maximum price Texas generators can charge during periods of heaviest demand to $4,500 a megawatt-hour as of Aug. 1 and to $9,000 a megawatt hour by 2015.
Power shortages have become a greater concern in Texas as the state’s economic growth outpaced the nation’s.
As soon as 2014, the amount of electricity available during hours when demand is highest, such as a hot midsummer afternoon when air conditioners are working hardest, may fall to a level that makes Texas more vulnerable to widespread power disruptions, according a May 22 report by the Electric Reliability Council of Texas, the state’s grid operator.
The state will need to add about 20,000 megawatts of power- plant capacity, the equivalent of 10 major coal or nuclear stations, to keep up with demand over the next decade, Samuel Brothwell, an analyst for Bloomberg Industries, said in an April 27 report. Texas only has one major power project under construction, a 1,000-megawatt coal plant, he said. Calpine is planning to add 520 megawatts of gas-fired capacity by 2014.
EPA Rule
Generators may be forced to close some plants that can’t meet new pollution limits from the U.S. Environmental Protection Agency, Warren Lasher, director of system planning at ERCOT, said on May 25.
The state has two choices: raise prices high enough that generators will determine it’s safe to build, or change to a model such as that used by PJM, which sets prices for needed power years in advance, said Oren, the Berkeley professor.
He expects Texas to hew to its model of paying for power only as its generated, which means the state will need to raise prices.
Brattle Group Inc., in a report commissioned by Ercot, said the state’s market structure was “only marginally riskier than energy-and-capacity markets,” such as PJM.
‘More Volatility’
Raising the price cap to $9,000 a megawatt-hour won’t be sufficient to end the threat of rolling blackouts, according to the report released today. Brattle Group said boosting the maximum price would give the state a reserve margin of 10 percent above peak demand, less than the 13.75 percent reserve margin federal regulators estimate ERCOT needs to avoid rolling blackouts during extreme weather.
“If they want an energy-only market, they’re going to have more volatility, understandably, and they may not get the reserve margins they want,” Paul Patterson, an analyst at Glenrock Associates LLC in New York, said in a phone interview today. “They may have more reliability issues.”
Texas will review the Brattle Group report before deciding on a course of action, including how high to raise prices, said Terry Hadley, a spokesman for the Public Utility Commission, said.
NRG Energy, the second largest generator owner in Texas, can’t attract financing to build in the state at current price levels, said John Ragan, president of the company’s Gulf Coast region.
‘Getting Close’
“The market signals we see do not support a return on an investment that makes sense,” Ragan said in a telephone interview. “We are getting close, but are not there right now.”
The state’s fourth-largest retail electricity provider, PNM Resources Inc. (PNM), based in Albuquerque, New Mexico, decided to jettison its competitive business in Texas after five years because of the “volatility, uncertainty of energy prices,” Charles Eldred, PNM’s chief financial officer, said in a May 23 interview at Bloomberg’s offices in New York.
Consumer advocates and lawmakers in Texas including State Representative Sylvester Turner worry that home electricity bills could soar, especially since the state hasn’t studied the repercussions of higher wholesale power prices on end users, said Turner, a Democrat.
“We need to be looking at all possibilities before we start throwing money at generators,” said Geoffrey Gay, an attorney who represents the Texas Coalition for Affordable Power, a group of more than 150 cities that buys power for government use.
To contact the reporters on this story: Mark Chediak in San Francisco at mchediak@bloomberg.net; Julie Johnsson in Chicago at jjohnsson@bloomberg.net
To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net
Texas May Triple Power Prices To Keep Lights On Amid Shortages
Livestock graze near the Fayette Power Project coal-burning electricity generators near La Grange, Texas. Photo: F. Carter Smith/Bloomberg
Livestock graze near the Fayette Power Project coal-burning electricity generators near La Grange, Texas. Photo: F. Carter Smith/Bloomberg
Drivers won't benefit from falling oil prices - Citywire.co.uk
The price of oil fell below the $100 a barrel mark on Friday for the first time since last October, but a weaker pound means drivers won’t save a penny at the pumps.
A barrel of Brent crude fell to $98, down from $120 a barrel last month.
The 2p saving drivers should see at the pumps as a result of lower oil prices, however, has been 'knocked out' because the pound has fallen in value by 4% since the middle of May, the AA explained.
'Had the pound remained worth $1.61 instead of around $1.53 now, further falls in the NW Europe wholesale price of petrol (taking it below $1000 a tonne for the first time since January) would have saved drivers a further 2p a litre,' the AA said.
Meanwhile, retailers have also yet to pass on the full 10p a litre saving from previous falls in wholesale prices to drivers.
Drivers have seen a saving of just seven and a half pence per litre at the pumps, Luke Bosdet of the AA explained. So while a weaker pound means they will not benefit from the most recent drop in wholesale prices, they are still owed a two and a half pence saving from the wholesale price falls seen since mid-April.
Yesterday the average price of petrol in the UK stood at 134.92p a litre, down from the record high of 142.8p seen in April. The cost of diesel, meanwhile, has fallen from 147.93p to 140.52p.
Earlier this week, the government warned fuel companies that they were being given 'one last chance' to improve transparency in the market.
Retailers have long been accused of responding to increases in wholesale prices much more quickly than price falls – prices shoot up like a rocket and fall like a feather, said Bosdet.
Transport secretary Justine Greening has now ordered retailers to set up a code of practice that allows drivers to monitor changes in petrol and diesel prices. If they don't, the government has said it will implement legislation.
Retailers claim that the industry does not understand the complex pricing mechanism, said Bosdet. Yet this fall in the price of oil is a perfect example of why greater transparency in the market would benefit suppliers as well as drivers.
On the one hand transparency would show drivers that a quarter of the savings from the original fall in wholesale prices was yet to be reflected at the pump, while on the other retailers and suppliers accused of pocketing the benefits of falling oil prices, would be able to defend themselves as to why a weaker pound means there will be no added savings.
Rural broadband would only benefit the rich, says Labour MP Graham Jones - Daily Telegraph
Mr Jones claimed the investment provided poor value for money and would create just 25 jobs.
Speaking in Parliament he also claimed “That £32 million will mean faster internet shopping for millionaires; it will not generate business in rural communities. White middle-class and upper-class areas will get the money and deprived, working-class areas will have money removed from them. It will not provide additional businesses or create jobs. This is just about faster internet shopping for wealthy people.”
Sarah Lee, Head of Policy for the Countryside Alliance, condemned the MP's attitude. "Graham Jones has criminally missed the point of these plans," she said. "In a digital age the need for fast and reliable broadband is just as important as the need for gas, electricity and water. People need to access more services online, especially critical Government services; businesses need the internet for growth; and much of everyday communication now occurs online.
In contrast to Mr Jones views, earlier this year shadow Culture Minister Harriet Harman criticised the Coalition for not doing enough to provide fast broadband to rural areas. "The Government can talk about ultra-fast and super-fast, hyper-fast and mega-fast, all (it) likes but what is happening is the creation of a digital underclass," she claimed.
Edwin Booth, Chairman of the Lancashire Enterprise Partnership, said: "creating this network could be as important as the construction of the canals and railways was to the Industrial Revolution".
Mr Jones added "I am not against rural broadband per se or denying others but is this our priority for Government funding in austere times? £30m investment would surely be more beneficial in real infrastructure and ensuring businesses in urban are connected at 100mbps as in rival economies."
Mr Jones told the Telegraph that he was in favour of rural broadband, but wanted to see more of it delivered by private sector investment. “My concern is only Lancashire and value for money economic development,” he said. “I don’t know enough to comment about national rural broadband issues. Every area is different.” He claimed £4.7m in local Council Tax was being taken from the most deprived East Lancashire areas to fund the broadband scheme.
New York takes a dismal FOURTH place in list of best U.S. cities for shopping - and you'll never guess the top three - Daily Mail
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It is regarded as the fashion capital of the world by many and yet New York has taken a dismal fourth place in a list of America's best cities for shopping.
The news will no doubt come as shock to the thousands of New Yorkers who consider the bustling metropolis to be by far the most sartorially sophisticated city in the country.
But according to a survey conducted by Travel + Leisure magazine, when it comes to a general consumer experience, New Orleans, Santa Fe and Charleston have superior stores.
Not so fashionable now: New York took fourth place in Travel + Leisure's list of best U.S. cities for shopping behind New Orleans, Santa Fe and Charleston
The travel publication asked readers to rate 35 U.S. cities with scores between one and five across categories such as nightlife, culture, people, quality of life and shopping.
The shopping category was divided into subcategories of luxury stores, independent boutiques, antiques markets, flea markets and interior design stores and the results subsequently combined for an overall score.
Bottom of the list was Orlando, Salt Lake City and Anchorage, the latter having also earned itself last place in the Best Dressed stakes.
Though New York took the number one spot in the luxury store sub-division followed by Chicago and Los Angeles, it failed to perform when it came to the other types of retail locale.
Despite the perennially trendy downtown area with its plethora of boutiques jam packed with fashionistas, not to mention Brooklyn's hipster contribution to fashion, in the independent category, New York City came a surprising fourth, beaten even by Savannah, Georgia.
When the New York Daily News revealed the results of the poll to nursing student Josh Belier, he exclaimed: 'New Orleans? Really? I’ve never heard anyone say: "Hey, let’s take a trip to New Orleans to go shopping." Everyone comes to New York to shop.'
Top spot: Readers voted New Orleans the best place overall for eager consumers across a variety of sub-divisions such as luxury, boutique and antique shopping
Perhaps not any more. At least certainly not for antiques and thrift store finds. Regardless of the popularity and abundance of New York's flea markets and second hand furniture stores, the city didn't even feature in the top ten list for either category.
Again the southern cities fared far better with Houston, Texas rounding out the top ten.
And if all those chic Manhattan interiors magazines led you to believe New York was the place to go for home design think again, it came a poor eighth.
The concluding result was that over all New York only closely beat San Juan, Puerto Rico in a top ten list that featured LA, San Francisco and Philadelphia as well.
Student Anthony Colone, 29, who is about to move to New York from Delaware told the Daily News: 'That must be a mistake. That's just stupid. New York City is the shopping capital of the world.'
AMERICA'S BEST SHOPPING CITIES
1. New Orleans, Louisiana
2. Santa Fe, New Mexico
3. Charleston, South Carolina
4. New York City, New York
5. Philadelphia, Pennsylvania
6. San Juan, Puerto Rico
7. Los Angeles, California
8. Savannah, Georgia
9. San Francisco, California
10. Providence, Rhode Island
AMERICA'S WORST SHOPPING CITIES
1. Anchorage, Alaska
2. Orlando, Florida
3. Salt Lake City, Utah
4. Atlanta, Georgia
5. Dallas/Forth Worth, Texas
6. Las Vegas, Nevada
7. Baltimore, Maryland
8. Phoenix/Scottsdale, Arizona
9. Washington, D.C.
10. Memphis, Tennessee
Shopping night focuses on supporting local girls - TribLocal
A “Ladies Night Out” charity shopping event at Pandora’s Rack in Orland Park next month will benefit two local teenagers and their families.
The shopping night at the resale boutique is scheduled for Friday, June 8.
Ten percent of the proceeds from the event will be donated to 14-year-old Courtney Van Ryn, who has a virus that attacks her muscular-skeletal system, and 17-year-old Katie Vree who was suddenly paralyzed last summer.
Ryn contracted the virus in spring 2011. It has severely damaged muscle fibers in her body and causes pain and weakness in her arms, hands and upper legs. The virus has forced Ryn to be hospitalized to for many months and receive physical therapy.
Vree was traveling to Guatemala last summer with a group of students from Chicago Christian High School and began experiencing pain and numbness in her left arm on the plane ride. Vree was paralyzed from her neck down within hours.
Vree has undergone rehabilitation, which has led to her ability to make slow, small movements. It is unknown to what extent she will be able to recover.
Mary Kay products will be available to purchase at the charity shopping event, along with light refreshments and a 50/50 raffle. The event is scheduled for 6-8 p.m.
Pandora’s Rack is located at 15218 S. LaGrange Road, in Orland Park. The boutique can be reached at 708-966-4643.
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