Hydro plants seek waivers amid California drought
California hydroelectric plants are trying to temporarily modify water release requirements in their licensing agreements as the severe drought across the western US enters another summer.
Plants with more than 300MW of generating capacity in the last three weeks have asked federal energy regulators to waive some of their licensing requirements amid a drought that one plant owner described as "unprecedented" and a water supply situation that is expected to be "dire."
California's snowpack at present is 3pc of typical conditions. The largest reservoirs in the state are at two-thirds of average storage levels, state data show.
Licenses for hydroelectric plants often set minimum stream flow and storage levels to protect wildlife and enable recreational uses such as rafting. But years of drought in the state and forecasts for more dry weather have prompted plant owners to ask the Federal Energy Regulatory Commission (FERC) to waive certain terms of their licenses until conditions improve. The plants do not explicitly say how they expect the drought conditions could affect hydroelectric output.
The Merced Irrigation District, which owns the 104MW Merced River hydroelectric project in northern California, last week asked FERC for a variance from its license because it does not expect the reservoir behind its dam will ever fill up this year to meet a minimum-required level of 115,000 acre-feet (142mn m3). The reservoir two weeks ago had 96,000 acre-feet of storage.
If that happens, it would be the first time it has not met that level since a dam on the river was constructed in 1967. The district also wants to cut downstream flow at one location by a third to 40 cf/s (1 m3/s).
Pacific Gas & Electric last week asked for a one-year variance of license requirements for the upper lakes of its 206MW Mokelumne river project, citing a snowpack as of 1 April that was the lowest since records began in 1918, at only 13pc of typical conditions. The utility wants to cut water flows in one area by 60pc to 2 cf/s and make other changes to its license.
The El Dorado Irrigation District on 10 April asked for a temporary amendment to the license for its 20MW El Dorado hydroelectric plant. The district wants to cut minimum stream flows below one of its dams by 67pc to 2 cf/s at one location to help conserve storage.
Hydropower output in California this year is ahead of the year-earlier level. Precipitation since 1 October 2014 has been at 76pc of average levels, according to the state Department of Water Resources. But an unusually warm winter that cut into the snowpack resulted in higher water runoff, which boosted hydropower output on the Independent System Operator grid by 14pc year over year.
Thermal plants' output — mostly natural gas — is 17pc lower year over year on the state's primary grid.
California wholesale power prices this year have averaged 40pc lower than a year earlier.
ck/ee
Send comments to feedback@argusmedia.com
Request more information about Argus' energy and commodity news, data and analysis services.
Copyright © 2015 Argus Media Ltd - www.argusmedia.com - All rights reserved.
Related news posts
Chevron’s oily DJ basin buy boosts gas output
Chevron’s oily DJ basin buy boosts gas output
New York, 3 May (Argus) — Chevron's US natural gas production has surged in recent quarters due to its crude-focused acquisition of Denver-based PDC Energy last August, increasing the oil major's exposure to the US gas market months after that market entered an extended price slump. Chevron's US gas production in the first quarter was 2.7 Bcf/d (76mn m3/d), up by 53pc from the year-earlier quarter and the highest since at least 2021, according to company production data. Chevron's total US output rose by 35pc year-over-year to 1.57 b/d of oil equivalent (boe/d), while US crude output increased by 21pc to 779,000 b/d. The acreage Chevron picked up last year in the DJ basin of northeast Colorado and southeast Wyoming has higher gas-oil ratios than the rest of its US portfolio. Chevron mostly focuses US production in the crude-rich Permian basin of west Texas and southeast New Mexico. Since Chevron closed its acquisition of PDC on 7 August, US gas prices have mostly languished in loss-making territory. Prompt-month Nymex gas settlements at the US benchmark Henry Hub from 7 August 2023 to 2 May 2024 averaged $2.46/mmBtu, down from an average of $4.999/mmBtu in the year-earlier period. In a May 2023 conference call over Chevron's acquisition of PDC, chief executive Mike Wirth expressed optimism for the long-run outlook for natural gas, despite the more immediately dim outlook. "There's going to be stronger global demand for gas growth than there will be for oil over the next decade and beyond as the world looks to decarbonize," Wirth said. Despite lower US gas prices, Chevron has captured $600mn in cost savings from the PDC acquisition between capital and operational expenditures, the company told Argus . Crude prices have also been more resilient. Chevron's profit in the first quarter was $5.5bn, down from $6.6bn in the year-earlier quarter, partly due to lower gas prices. US gas prices have been lower this year as unseasonably warm winter weather and resilient production have created an oversupplied US gas market. A government report Thursday showed US gas inventories up by 35pc from the five-year average. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UN carbon market enshrines appeal, grievance processes
UN carbon market enshrines appeal, grievance processes
Berlin, 3 May (Argus) — The much-debated procedure for appeal and grievance processes for people negatively affected by carbon mitigation activities was finally passed this week by the regulator of the future UN carbon market. The supervisory body of the Paris agreement crediting mechanism, under Article 6.4 of the Paris climate agreement, called the appeal and grievance procedure a "crucial step towards developing a new international carbon market that sets the benchmark for high integrity carbon credits". The mechanism is expected to be passed at the UN climate summit Cop 29 in November in Azerbaijan. The appeal and grievance procedure sets the fee for filing an appeal at $30,000, compared with the $5,000 fee suggested in earlier iterations, which was seen by some supervisory body members at this week's meeting in Bonn, Germany, as "too low for project developers, but too high for vulnerable groups". The fee will be waived for appellants who are appealing for vulnerable groups, such as local communities and indigenous peoples. But the supervisory body failed to pass the mechanism's long-awaited sustainable development tool, instead launching a call for input. Members had criticised the lack of a validation and verification process for the tool, and its unclear delimitations, given that some of its objectives will be addressed in future rules on carbon removals activities or the carbon reduction methodologies under the mechanism. Making the tool mandatory was demanded by both countries and non-governmental organisations at recent Cop summits, with the lack of a grievance process and sustainable development tool part of the reason why the pricing mechanism was not finalised at Cop 28 in Dubai last year. The sustainable development tool of the Kyoto Protocol's clean development mechanism (CDM), which the new mechanism broadly aims to replace, was never made mandatory. A total of 1,796 carbon mitigation activities have now requested to transition from the CDM to the new mechanism, of which more than 300 have not yet provided full details and could miss the 31 August deadline, the UN's climate arm said in Bonn. The supervisory body called for an extension of the transition period to 4 November. Work on the new mechanism's registry is also advancing, with the supervisory body agreeing to launch a consultation on the "legal, technical and financial implications of providing functionality for the treatment of financial security interests in Article 6.4 emissions reductions within the mechanism registry". By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US job growth nearly halved in April: Update
US job growth nearly halved in April: Update
Adds services PMI in first, fifth paragraphs, factory PMI reference in sixth paragraph. Houston, 3 May (Argus) — The US added fewer jobs in April as the unemployment rate ticked up and average earnings growth slowed, signs of gradually weakening labor market conditions. A separate survey showed the services sector contracted last month. The US added 175,000 jobs in April, the Labor Department reported today, fewer than the 238,000 analysts anticipated. That compared with an upwardly revised 315,000 jobs in March and a downwardly revised 236,000 jobs in February. The unemployment rate ticked up to 3.9pc from 3.8pc. The unemployment rate has ranged from 3.7-3.9pc since August 2023, near the five-decade low of 3.4pc. The latest employment report comes after the Federal Reserve on Wednesday held its target lending rate unchanged for a sixth time and signaled it would be slower in cutting rates from two-decade highs as the labor market has remained "strong" and inflation, even while easing, is "still too high". US stocks opened more than 1pc higher today after the jobs report and the yield on the 10-year Treasury note fell to 4.47pc. Futures markets showed odds of a September rate cut rose by about 10 percentage points to about 70pc after the report. Services weakness Another report today showed the biggest segment of the economy contracted last month. The Institute for Supply Management's (ISM) services purchasing managers index (PMI) fell to 49.4 in April from 51.4 in March, ending 15 months of expansion. The services PMI employment index fell to 45.9, the fourth contraction in five months, in today's report. Readings below 50 signal contraction. On 1 May, ISM reported that the manufacturing PMI fell to 49.2 in April, after one month of growth following 16 months of contraction. In today's employment report from the Labor Department, average hourly earnings grew by 3.9pc over the 12 month period, down from 4.1pc in the period ended in March. Job gains in the 12 months through March averaged 242,000. Gains, including revisions, averaged 276,000 in the prior three-month period. Job gains occurred in health care, social services and transportation and warehousing. Health care added 56,000 jobs, in line with the gains over the prior 12 months. Transportation and warehousing added 22,000, also near the 12-month average. Retail trade added 20,000. Construction added 9,000 following 40,000 in March. Government added 8,000, slowing from an average of 55,000 in the prior 12 months. Manufacturing added 9,000 jobs after posting 4,000 jobs the prior month. Mining and logging lost 3,000 jobs. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Austrian regulator consults on gas tariff changes
Austrian regulator consults on gas tariff changes
London, 3 May (Argus) — Austrian energy regulator E-Control has revised up its planned increase in gas tariffs from the start of 2025 but adjusted its commodity charge lower. E-Control on Friday published draft amendments to its gas system charges ordinance that would codify planned changes to how it calculates tariffs. It largely retains its revised methodology from April, but has modified its planned outright tariffs and commodity charge. The regulator had in February proposed a shift to a capacity-weighted distance (CWD) model for its reference price methodology, along with a change to a 50:50 entry-exit revenue split from roughly 20:80 at present. The proposed changes would have tripled entry costs from Germany and quadrupled them from Italy from 2025, as well as other significant changes for the distribution system and storages. Austria's system operators supported the changes , but almost all other respondents to the consultation were highly critical , warning that the changes could threaten diversification, lower utilisation and increase tariffs further and harm liquidity. E-Control last month walked back on several of the proposed changes . Most significantly, it revised the entry-exit split to 25:75, limited the increase in exit tariffs to the distribution zone, introduced a 50pc discount on exit fees to storage facilities, and equalised entry tariffs at all points. The switch to a CWD model was retained, however. The most notable modification from the changes proposed in April is a roughly 7pc increase in capacity-based tariffs, as the new amendments use final prices as opposed to indicative prices previously (see table) . The difference "results from the findings over the course of the cost approval procedure during the past few months", E-Control told Argus . In contrast, the commodity charge on gas entering and exiting the Austrian grid has decreased as a result of "lower expected fuel energy costs", E-Control told Argus . It now plans to charge around €0.04/MWh on entry flows and €0.13/MWh on exit flows, compared with €0.12/MWh and €0.13/MWh, respectively, in the original proposal. There is no commodity charge in place for this year. The final change is an update of the multipliers for capacity bookings depending on their duration. The regulator now proposes multipliers of 1.25 for quarterly products, 1.5 for monthly, two for daily, and three for within-day. Interested parties may submit comments to the regulator by 16 May. Final tariffs will then be published in June, and will be applicable from 1 January 2025. By Brendan A'Hearn Austria 2025-28 estimated tariffs €/kWh/h/a Entry/Exit Capacity type* 2025 (final) 2026 (preliminary) 2027 (preliminary) Baumgarten Entry FZK 1.30 1.37 1.48 Oberkappel Entry FZK 1.30 1.37 1.48 Uberackern Entry FZK 1.30 1.37 1.48 Uberackern Entry DZK 1.17 1.23 1.33 Uberackern Exit FZK 4.25 4.59 4.98 Uberackern Exit DZK 3.82 4.13 4.48 Arnoldstein Entry FZK 1.30 1.37 1.48 Arnoldstein Entry DZK 1.17 1.23 1.33 Arnoldstein Exit FZK 5.96 6.62 7.39 Murfeld Exit FZK 3.73 4.19 4.71 Mosonmagyarovar Exit FZK 2.15 2.49 2.80 Distribution area Exit FZK 1.26 1.45 1.67 Storage Penta West Exit FZK 2.12 2.29 2.49 Storage MAB Exit FZK 1.07 1.19 1.34 *FZK = Firm, freely allocable capacity; DZK = dynamically allocable capacity — E-Control Austria 2025 final tariff vs current €/kWh/h/a Entry/Exit Capacity type* 2025 Current ±% Baumgarten Entry FZK 1.30 0.85 53 Oberkappel Entry FZK 1.30 0.97 34 Uberackern Entry FZK 1.30 0.97 34 Uberackern Entry DZK 1.17 0.88 33 Uberackern Exit FZK 4.25 3.26 30 Uberackern Exit DZK 3.82 2.93 31 Arnoldstein Entry FZK 1.30 0.97 33 Arnoldstein Entry DZK 1.17 0.68 72 Arnoldstein Exit FZK 5.96 4.35 37 Murfeld Exit FZK 3.73 1.90 97 Mosonmagyarovar Exit FZK 2.15 1.23 75 Distribution area Exit FZK 1.26 0.42 200 Storage Penta West Exit FZK 2.12 0.44 383 Storage MAB Exit FZK 1.07 0.44 144 *FZK = firm, freely allocable capacity; DZK = dynamically allocable capacity — E-Control Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more