Wellfleet seafood purveyor buys wholesale shellfish company - Abington Mariner Wellfleet seafood purveyor buys wholesale shellfish company - Abington Mariner
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Friday, June 1, 2012

Wellfleet seafood purveyor buys wholesale shellfish company - Abington Mariner

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.”



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.



UPDATE 2-Brattle report outlines Texas power market options - Reuters UK

Fri Jun 1, 2012 8:06pm BST

* Advises higher price cap, only during extreme conditions

* Sierra Club criticizes push for higher wholesale prices (New throughout, adds Sierra Club, generator comment, details)

By Eileen O'Grady

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)



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.



Lexity Announces Support of Google Shopping - YAHOO!

Lexity, the provider of marketing apps for ecommerce, today announced that it supports Google Shopping, planned for introduction in the Fall.

Mountain View, Calif (PRWEB) June 01, 2012

Lexity, a provider of marketing apps for ecommerce, today announced that it supports Google Shopping, planned for introduction this Fall.

“The changes to Google Shopping will provide a better user experience that will help our merchants succeed in this evolving world,” said Amit Kumar, CEO of Lexity. “We have already been providing both Google Product Search and Product Listing ads to our small to medium size merchant clients. We welcome the merging of these two separate products into one unified program.”

Lexity enables merchants to deliver superior results from Google advertising while minimizing the time spent managing these campaigns. With Google Shopping, Lexity will automatically manage the bidding for its merchants and provide them with a simple reporting interface, without requiring them to become AdWords experts. Today, Lexity manages Product Listing Ads using a similar fully automated system.

Lexity was one of the early adopters of Google Product APIs and was featured in Google I/O last year.

About Lexity


Lexity offers a versatile suite of marketing apps for ecommerce, enabling simple and affordable online advertising for small and medium-sized businesses. Founded in 2009, Lexity is backed by Spark Capital, True Ventures and Dave McClure’s 500 Startups. Lexity is headquartered in Mountain View, and has a presence in Bangalore, India. For more information, visit lexity.com, Twitter (@lxty), and Facebook (facebook.com/goLexity).

For more media information, contact:

Lisa Hendrickson

516-767-8390


lisapr(at)optonline(dot)net

Amelia Lin
Lexity
650-961-2785
Email Information




New exemptions for cross-border shopping take effect - CTV

Canadians can now bring back more U.S. goods after an overnight or weekly trip without being charged extra duty.

Shopper Chelsea Knox said she will be heading down to the United States to take advantage of the new exemptions.

"We're newly pregnant, and I'm going to get some maternity clothing. They don't have a lot of great selection here," said Knox in Winnipeg. "I'm actually very excited about getting all that stuff down there."

The new exemptions, announced in this year's federal budget, mean Canadians can now buy up to $200 worth of goods for a 24-hour trip across the border without having to pay duty. The previous limit was $50. The exemption for a two to seven day trip has increased to $800 from $400.

Knox said the new limit actually mean she can spend more on shopping and less on accommodations. "We'd always have to spend a lot more to stay for two nights – hotels and food and everything," Knox said.

Local retailers are concerned many shoppers will now do just what Knox is doing – and it will hurt their business.

"It's a little scary at first, obviously, because you are a small business, and you don't know how people are going to react to that," said Nicola Loewen, who owns Mad About Style Boutique on Academy Road.

"We do know we have a lot of clients that do their cross-border shopping," Loewen said.

Winnipeg Chamber of Commerce officials have similar concerns. The business group said Canadian tariffs should be lowered or removed to stem the expected flow of consumers and dollars to the United States.

"We really want to look at those sort of things to make sure we're on a level playing field with U.S. retailers and so Canadians aren't going to be put at a disadvantage," said Chuck Davidson of the Winnipeg Chamber of Commerce.

The federal government said the new shopping limits are now harmonized with the ones in the U.S.



Shopping police illegal parking caught on camera (From Watford Observer) - Watford Observer

Police caught on camera parking on yellow lines for shopping trips in Watford

Police officers in Watford have been caught on camera for the second time in two weeks parking on double yellow lines to go on shopping jaunts to supermarkets.

The town’s force is facing a mounting outcry after officers were snapped on Friday parking up on a pavement in central Watford for a trip to Iceland.

The revelation comes just a week after pictures emerged of police illegally parking in St Albans Road to visit a Tesco Express.

The pictures have been branded “disgraceful” by one former police detective who said the abuses damaged the force’s standing with the public.

Watford’s Chief Inspector Nick Caveney has also come down hard on the practice, saying the officers involved have been reprimanded and prosecuted.

The town’s top policeman also described the two incidents as a “rare lapse” in the behaviour of his committed and dedicated force.

The latest picture taken by a Watford resident who saw officers park their car on the pavement in Albert Road South, a stone’s throw away from Watford Police Station, where there are double yellow lines.

The resident, who asked not to be named, said: “A patrol car pulled up with all four wheels on the pavement, two officers jumped out slammed the door shut and left the engine running, presumably with the keys inside.

“I thought they were going to make an arrest but they strolled over to Iceland to do a bit of shopping.

“They emerged from the shop 10 minutes later with a bag of shopping. I wouldn’t mind but it would be quicker to walk from the police station in Shady Lane than to drive there.”

A retired Metropolitan Police detective, Terry Hymans, who lives in Rickmansworth, said he felt there was no excuse for officers misusing parking privileges.

He also said actions like the ones caught on camera damaged the public’s trust in the police.

“I think it is disgraceful personally,” he said “I don’t think there is any excuse. This is part of the reason people have little regard for police officers today.

“It sends out a signal of don’t do as I do, do as I say. People will naturally assume they (the police) all do it and that is not true.”

The first pictures police parking on yellow lines was first captured by Abbots Langley resident Kevin Brown who submitted them to the Watford Observer last week.

He said he was “amazed” to see an officer park on a double yellow lines on a pavement in St Albans Road before spending seven minutes in Tesco Express and emerging with a shopping bag.

Following the revelations Chief Inspector for Watford, Nick Caveney said he was “shocked and surprised” to see the pictures.

He said: “As police officers, we have a very clear responsibility to operate totally within the law, whether this is when dealing with people we have arrested or while using a public highway in a police vehicle.

We have to set a good example to our communities and these incidents clearly do not. I am glad these have been brought to my attention and have since spoken with the officers concerned to establish the circumstances.

“Had they been responding to an emergency, illegal parking is justified and allowed, but this was not the case.

The officers concerned have been reprimanded for their behaviour and just like any other member of the public, are being prosecuted for their actions.”

“I’m very proud of our team here in Watford who work beyond the call of duty on a daily basis in order to keep our communities safe.

“These incidents are a rare lapse in an otherwise committed, dedicated and upstanding team.”

Comments(17)

TRT says...
10:02am Fri 1 Jun 12

Reprimanded? They should be fined same as the rest of us! TRT

Hornets number 12 fan says...
10:04am Fri 1 Jun 12

Considering Iceland has it's own car park this is even more stupid on the officers part! And if I or you left our vehicle parked with the engine running the same Police officer would be down on us like a ton of bricks! Sort it Out Watford Police! Hornets number 12 fan

Taximan says...
11:07am Fri 1 Jun 12

Well done Mr Brown of Abbots Langley, this makes a change to drag the fuzz in rather than being dragged in by the fuzz! Taximan

AWatfordTaxpayer says...
11:34am Fri 1 Jun 12

I was in Watford with my family when I saw a number of mounted police chatting to each other outside McDonalds near the flyover. Two patrols had met up.

One of the horses then did his business right there in the middle of the pedestrian walkway, a few yards from the entrance to McDonalds, leaving a load of manure for any lucky gardener passing by, or any unlucky pedestrian going by, if you get my drift.

I asked the rider, a policewoman, what she was going to do about it. She replied it was a job for the council and that she was going to do nothing about it. After chatting a while longer, the riders went on their separate ways, leaving the steaming deposit for the people of Watford to enjoy at their leisure.

As a dog owner, I would be liable to a £1000 fine for leaving a dog poo on the pavement. The police leave something altogether more impressive and just ignored it, and that outside a popular fast food restaurant.

It really is one rule for us, and one for them, isn't it? The policewoman was not embarrassed at all, it was really just a case of "tough luck, shoppers".

I took photos to send to the council, of the horse in the act and the mess left afterwards, but decided not to as I doubted they would care or do anything about it.

I must admit, I was very disappointed in the police for leaving this steaming manure in the middle of the street and doing nothing at all about it. The policewoman just tried to ignore it until I brought it to her attention, whereupon she dismissed it.
I was in Watford with my family when I saw a number of mounted police chatting to each other outside McDonalds near the flyover. Two patrols had met up. One of the horses then did his business right there in the middle of the pedestrian walkway, a few yards from the entrance to McDonalds, leaving a load of manure for any lucky gardener passing by, or any unlucky pedestrian going by, if you get my drift. I asked the rider, a policewoman, what she was going to do about it. She replied it was a job for the council and that she was going to do nothing about it. After chatting a while longer, the riders went on their separate ways, leaving the steaming deposit for the people of Watford to enjoy at their leisure. As a dog owner, I would be liable to a £1000 fine for leaving a dog poo on the pavement. The police leave something altogether more impressive and just ignored it, and that outside a popular fast food restaurant. It really is one rule for us, and one for them, isn't it? The policewoman was not embarrassed at all, it was really just a case of "tough luck, shoppers". I took photos to send to the council, of the horse in the act and the mess left afterwards, but decided not to as I doubted they would care or do anything about it. I must admit, I was very disappointed in the police for leaving this steaming manure in the middle of the street and doing nothing at all about it. The policewoman just tried to ignore it until I brought it to her attention, whereupon she dismissed it. AWatfordTaxpayer

Taximan says...
11:47am Fri 1 Jun 12

Sounds like a load of crap to me. Taximan

Reg Edit says...
11:53am Fri 1 Jun 12

Clearly the horse was leaving it for the council as a contribution to Liberal thinking and policymaking? I would say that they have clearly since acted on a lot of the content of this contribution, what with 20's plenty and the Cassiobury CPZ. In fact, I struggle to think of any policies from the local council that are not complete H@r$3 S***. Reg Edit

Reg Edit says...
11:59am Fri 1 Jun 12

Maybe the Lib Dems, instead of posing for election photos besides potholes (which incidentally are the domain of the County Council, nothing to do with the local council), could set up a crack team of councillors who would be ready to pose next to a steaming pile of horse-doo and then get a shovel and a sack and scoop it up. Then the greens could take it away and make use of it. There, something useful for the Lib Dems and Greens to do, instead of messing up this town with their dotty ideas. Reg Edit

garston tony says...
12:12pm Fri 1 Jun 12

[quote][p][bold]TRT[/bold] wrote: Reprimanded? They should be fined same as the rest of us![/p][/quote]The chief officer did say reprimanded AND prosecuted. I'm assuming that means fines any of us would have received so they have been treated the same as the rest of us TRT. It's always a shame when people leave themselves stupidly open to critisism. I think on the whole the police do a great job in the circumstances they are given, but stuff like this just gives ammunition to those that want to knock them garston tony

TRT says...
12:25pm Fri 1 Jun 12

@Garston Tony. As usual, the text of the article has changed and expanded since I originally made my comment, which was moments after it appeared on the site. TRT

garston tony says...
1:05pm Fri 1 Jun 12

Fair enough TRT, its good that they do make corrections but can cause some confusing comments hey! garston tony

LSC says...
1:10pm Fri 1 Jun 12

Am I the only one who thinks this is a bit of a fuss about nothing? Probably the ONLY perk of being a police officer is being able to park where you like. The rest of the time is spent on horrible shifts dealing with drunk and abusive low-life scum and then filling out 32 forms that ensure there was no abuse of human rights and catalogue the approximate race of everyone within half a mile of any incedent. Piling head first into fights with drugged-up possibly armed psycopaths, with a small stick and a hat as their only defence. Yes, they are not above the law and parking badly is a silly thing to do PR-wise, but come on people. Take a look around you. If the police parking on double yellow lines is the biggest injustice you witness this week then I envy you very much indeed. LSC

TRT says...
1:14pm Fri 1 Jun 12

@LSC. It's broken window syndrome. They are supposed to set a good example to the rest. Let he who is without sin etc. etc. TRT

onlyonerodthomas says...
1:22pm Fri 1 Jun 12

last month whilst walking to buy a paper and crossing the road(st albans rd) i noticed a uniformed police officer in an astra texting whilst driving in slow traffic!!!.unbelieva ble,you couldnt make this up.i wonder how many fines he has issued in his time for a similar offence. onlyonerodthomas

Maclanx says...
2:57pm Fri 1 Jun 12

[quote][p][bold]LSC[/bold] wrote: Am I the only one who thinks this is a bit of a fuss about nothing? Probably the ONLY perk of being a police officer is being able to park where you like. The rest of the time is spent on horrible shifts dealing with drunk and abusive low-life scum and then filling out 32 forms that ensure there was no abuse of human rights and catalogue the approximate race of everyone within half a mile of any incedent. Piling head first into fights with drugged-up possibly armed psycopaths, with a small stick and a hat as their only defence. Yes, they are not above the law and parking badly is a silly thing to do PR-wise, but come on people. Take a look around you. If the police parking on double yellow lines is the biggest injustice you witness this week then I envy you very much indeed.[/p][/quote]There are lots of greater injustices - trouble is the image is that police don't appear to care or do anything about it. So on top of that when they think they can break the laws that they are supposed to enforce it really takes the mick. Another example is parking outside KFc on St Albans Rd, on the cycle path, so often I've lost count. Maclanx

gangerman says...
8:06pm Fri 1 Jun 12

All policemen of the female persuasion also. Hmmmmm! gangerman

pepsiman says...
9:19pm Fri 1 Jun 12

Unwritten perks of the job, like most jobs have. Mr policeman, if you risk your life to protect us we will let you park wherever you like now and again. I think thats fairish as long as you dont take the p11ss pepsiman

Reg Edit says...
10:25pm Fri 1 Jun 12

Or leave a poo. Reg Edit


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

Enlarge image Texas May Triple Power Prices To Keep Lights On Amid Shortages

Texas May Triple Power Prices To Keep Lights On Amid Shortages

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


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