In case you missed it, there were two interesting developments in the power markets last week.

1. Dominion Resources wants to write off North Anna nuclear unit 3. Dominion invested $600 into this paper power plant. It wants to start over without the burden of carrying these costs.

The implications are three-fold. First, it appears Dominion will have a bad bottom line in Q1. Second, consumers can expect a rate increase. Third, Virginia's legislature wants another nuclear power plant built.

2. Texas plans to do nothing about their capacity shortfall. Again, there are three-fold implications. First, the grid operator [ERCOT] believes future demand growth is lessening. Second, the state is willing to accept rolling blackouts if blackouts are infrequent and for short durations. Third, the state is gambling there will be no major retirements.

I would not want to take the state's gamble. However, it does throw a red herring at federal regulators (NERC).


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