William Nelson

[William Nelson @wwnelson85]

Are the Mariners for Real? https://t.co/TAwf1AMHcP

[William Nelson @wwnelson85]

How to Grill Steak: A Step-by-Step Guide https://t.co/0Hf8IK2vmW

[William Nelson @wwnelson85]

@gilbeaq We defined ‘margins’ loosely for regulated plants as ‘value minus cost’. For regulated plants’ energy ‘revenues’, we used proxy Interface prices – eg. hourly MISO-SOCO Interface prices. Southern’s plants are ‘red’ mostly because of geography: exorbitant transport costs to SERC.

[William Nelson @wwnelson85]

@gilbeaq With gas/coal near $/MMBtu parity, there’s simply not enough short-run energy margin (i.e. gross dark spread) to cover coal’s high fixed costs. So the fleet is leaning more heavily on the Resource Adequacy argument. Coal’s value proposition has devolved from baseload to backup.

[William Nelson @wwnelson85]

@gilbeaq It is also true that there is a ‘Resource Adequacy’ argument for keeping high-cost coal capacity online. Capacity markets employ this logic. In regulated regions, with no price signals, PUCs have to appraise their plants against energy + capacity ‘replacement cost’. Hard to do.

[William Nelson @wwnelson85]

@gilbeaq Interesting discussion. I'm the author of the study. My title states that plants are on 'shaky economic footing'. The 'losing money' translation is misleading under regulated regimes. What is true is most coal plants cost more to operate than the value of the energy they produce.

[William Nelson @wwnelson85]

@agelston thank you Andrew