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McCullough Research provides research and analysis on subjects of interest to the energy industry. The reports below may be downloaded at no charge unless otherwise indicated.

2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014


2014

February 11, 2014
Revised Analysis of the Paducah Fuels Transaction
The primary source of value in their new valuation methodology is an assumed present value of the TVA payment stream at a rate lower than 3%. We have reverse engineered the discount rate at 2.76% from their materials and have heard 2.85% from the press. This is an exceeding low discount rate and not one currently in use at Energy North-west, BPA, or TVA. In fact, this rate is lower than the inflation rate assumption in use at Energy Northwest – resulting in a negative real discount rate. This would normally be viewed as an error in calculation rather than a serious estimate.

January 25, 2014
Energy Northwest Losses in the 2013 Forward Purchase of Nuclear Fuel
McCullough Research examines the 2012 transaction where Energy Northwest purchased a long term supply of nuclear fuel from the USEC's antiquated facilities at Paducah, Kentucky. The environmental consequences of the transaction were severe, but our review indicates that the economic consequences were also very negative.

Also see cited materials:

Energy Northwest 2012 Uranium Enrichment Program here.

Coumbia Generating Station FY 2013 Fuel Management Plan Rev. 0 here.

Coumbia Generating Station FY 2013 Fuel Management Plan Rev. 1 here.

Coumbia Generating Station FY 2014 Fuel Management Plan Rev. 0 here.

Energy Northwest Tails Fuel Procurement Transaction - Pre-Meeting Materials Package here.

Energy Northwest Tails Fuel Procurement Transaction here.

Agreement between the Department of Energy and Energy Northwest here.

Project Review Committee Meeting Project 628801 here.

Energy Northwest Special Executive Board Meeting April 26, 2012 here.

Energy Northwest Special Executive Board Meeting May 10, 2012 here.

January 2, 2014
Review of the November 2013 Energy Northwest Study
McCullough Research has prepared a critique claiming serious errors in Energy Northwest's most recent economic study on the cost effectiveness of the Columbia Generating Station nuclear power plant.


2013

December 11, 2013
Economic Analysis of the Columbia Generating Station
McCullough Research analyzes the Economics of the Columbia Generating Station near Richland, Washington. Finding that ratepayers could save at least $1.7 billion over the next 17 years if Columbia Generating Station closes, the study makes a suggestion for acquiring less costly power in the region.

July 2, 2013
The Year of Living Dangerously: Retail Gasoline Prices and Fundamentals
McCullough Research examines how the minor outage at ExxonMobil's Torrance refinery in October 2012 was used as an opportunity to secure windfall profits.

February 21, 2013
McCullough Research Rebuttal to Western States Petroleum Association
Following our November 15th report, the Western States Petroleum Association issued a response, attempting to disprove our claims. In this formal rebuttal, Robert McCullough exposes the flaws in the WSPA's reasoning and shows that there has still been no sufficient explanation for the 2012 price spikes


2012

November 15, 2012
May and October 2012 Gasoline Price Spikes on the West Coast
McCullough Research refutes claims that high West Coast prices are a result of normal market factors. We investigate an exhaustive amount of refinery-related data to point out inaccuracies and discrepancies in common explanations for the price spikes.

Also see related media attention here.

Also see West Coast Senators' official letter to the Department of Justice here.

October 2, 2012
Questioning the CBO Electric Vehicle Conclusions
McCullough Research examines the electric car industry, attempting to determine whether or not plug-in hybrids and electric vehicles are cost effective.

June 5, 2012
Analysis of West Coast Gasoline Prices
McCullough Research's analysis of rising gasoline prices on the West Coast in the presence of falling demand and increased production. We also note the unusual number of refineries that are offline due to mechanical and technical issues.

Also see US Senator Maria Cantwell’s letter to the FTC here.

Also see US Senator Maria Cantwell’s press release here.

Also see related media attention here.


2011

October 2, 2011
Lowering Florida's Electricity Prices
McCullough Research examines a Public Utility Research Center report addressing Florida's electricity prices. We make suggestions that lead to meaningful advances in utility regulation as well as lower the price of electricity in Florida.

July 14, 2011
2011 ERCOT Blackouts and Emergencies
McCullough Research's analysis of capacity resources during the blackout of February 2, 2011 and the Level 1 Energy Emergency Alert on June 27, 2011. We conclude that the weather is not the reason for ERCOT’s inability to operate reliably while simultaneously possessing high reserve margins.


2010

March 1, 2010
"Translation" of the September 29, 2008 NY Consultant Hydraulics Report to Manitoba Hydro CEO Bob Brennan
McCullough Research's summary of the report by a New York consultant that blew the whistle on Manitoba Hydro's unnecessarily high risk levels, as well as its use of outdated and inaccurate modeling practices. The McCullough report was prepared for the Southern Chiefs Organization (SCO), which filed for intervener status in Manitoba Hydro's rate case on March 8, 2010, in the Province of Manitoba. Read the NY Consultant's September 28, 2008 Hydraulics Report here. SCO's press release is available at: http://www.scoinc.mb.ca/news_info.php?id=108


2009

December 2 , 2009
Review of the ICF Report on Manitoba Hydro Export Sales
Analysis of the concerns raised by a New York consultant to Manitoba Hydro, McCullough Research concludes that the issues raised "appear consistent with the limited data available for Manitoba Hydro" and that "criticisms of the ICF report are accurate." McCullough Research recommends a thorough review of the utility.

Read the CBC News article, U.S. consultant backs whistleblower in Hydro audit. Also view the December 2, 2009 televised CBC story covering the report. The Manitoba Hydro segment starts about 9:00 minutes into the show.

June 5, 2009
New York State Electricity Plants’ Profitability Results
A combination of high fuel costs and non-economic bidding practices at the New York In-dependent System Operator (NY ISO) made 2008 a very profitable year for generators in New York.

The profits of the largest plants in New York were very high. On the most conservative basis, assuming no debt in the capital structure, the profits range from 19% to 99%. Alternatively, assuming a 50/50 capital structure, the profits range from 31% to 186%. The before-tax weighted average of 100% equity is 50%, and the same measure for 50% equity is 93%.

June 5, 2009 New York State Assembly press release. Press Release

May 5, 2009
Transparency in ERCOT: A No-cost Strategy to Reduce Electricity Prices in Texas
This report finds that additional transparency in the Texas wholesale electricity market can make substantial improvements that would lower prices to consumers and reduce the possibility for market manipulation. We run a statistical test of the hypothesis that removing the barriers that restrict access by Texas consumers and decision-makers to market information can dramatically cut the cost of electricity.

Methodology used in “Transparency in ERCOT: A No-cost Strategy to Reduce Electricity Prices in Texas”. Statistical Appendix

May 5, 2009 AARP Texas press release. Press Release

April 7, 2009
A Forensic Analysis of Pickens' Peak: Speculators, Fundamentals, or Market Structure
America’s most significant import, crude oil, has such strong connections with natural gas and electricity that it affects the entire economy. It is also the import we know the least about. U.S. regulators do not collect data on any spot transactions, and data is available on only a portion of forward transactions. Although we fear that the oil market may have become dominated by speculators, we do not know who they are, or their possible impacts. We do know that oil prices are frequently anomalous. For example, on March 15, 2009, OPEC decided to maintain output at levels agreed to before the onset of the current recession. This was good news for oil consumers. Unfortunately, however, oil prices have since risen significantly.

Related presentation to the 2009 EIA Energy Conference: A New Climate for Energy. Presentation

March 30, 2009
New Yorkers Lost $2.2 Billion Because of NYISO Practices: The Debate Continues
The responses by NYISO and the PSC are notable for what they do not do say. They do not challenge or rebut our finding that New Yorkers are overpaying by $2.2 billion a year because of the market-clearing price auctions run by the New York Independent System Operator and apparently supported by the PSC.

March 3, 2009
November 2008 Update: Why are Electricity Prices in RTOs Increasingly Expensive?
This report updates the data from our March, 2008 article on the increasing price differential between RTO and non-RTO states.

March 3 , 2009
The New York Independent System Operator’s Market-Clearing Price Auction Is Too Expensive for New York
A report by McCullough Research entitled “New York Independent System Operators Market Clearing Price Auction is Too Expensive for New York” reveals $2.2 billion in excessive electric bills for New Yorkers, caused by a system that sets artificially high prices for electricity through its “Market-Clearing Price” auctions.

March 3, 2009 92nd Assembly District press release. Press Release

February 24, 2009
The Need for a Connecticut Power Authority
This report, written for the AARP Connecticut chapter, is in support of H.B. No. 6510 (RAISED) AN ACT ESTABLISHING A PUBLIC POWER AUTHORITY, another effort by consumer advocates, Attorney General Blumenthal and others to protect the people of Connecticut and the state economy from the predatory pricing resulting from ISO New England's single price wholesale electricity auction market.

February 24, 2009 AARP Connecticut press release. Press Release

February 20, 2009
Analysis of the Balancing Energy Market
This white paper attempts to explain why uneconomic balancing energy bids are so frequent as well as the economics behind their submission to the nation's ISO/RTO's.

January 7 , 2009
Review of the ERCOT December 18, 2008 Nodal Cost Benefit Study
Upon review of the study McCullough notes, “These problems appear significant enough that the conclusions of the study are effectively speculative. In addition, the study is poorly documented and depends on a number of unusual assumptions.”

January 7, 2009 McCullough Research press release outlining the review of the Nodal Cost Benefit Study. Press Release

2008

August 6, 2008
Seeking the Causes of the July 3rd Spike in World Oil Prices
Senators Maria Cantwell (D-WA) and Ron Wyden (D-OR) have released a report by Robert McCullough seeking the cause of the spike in world oil prices on July 3rd, 2008. (Updated September 16, 2008)

The CFTC issued an official report in September of 2008 citing Robert McCullough's August 6th Report on the spike in oil prices. CFTC Report

Senator Maria Cantwell's press release issued August 7th, 2008 highlights Robert McCullough's August 6th report. Press Release

April 7, 2008
Kaye Scholer's Redacted "Analysis of Possible Complaints Relating to Maryland's SOS Auctions"
It is our belief that Marylanders still do not have all of the facts necessary to understand why the price of electricity remains high. This report expresses our concerns.

March 19, 2008
March 2008 Update: Why are Electricity Prices in RTOs Increasingly Expensive?
This report updates the data from our February, 2008 article on the increasing price differential between RTO and non-RTO states.

February 1, 2008
Some Observations on Societe Generale's Risk Controls
"Are existing controls within corporations such as Enron or Societe Generale sufficient to prevent abuses? Should global external regulatory controls be strengthened? ... If internal controls are as weak as the Societe Generale saga appears to imply, significant regulatory reforms may be required."

French Government preliminary report:
French, English

2007

December 20, 2007
The Missing Benchmark in Electricity Deregulation
"Advocates of centrally administered markets are quick to assert that today’s ISO/RTOs are the most efficient mechanism to encourage the needed investments in new generation and transmission that can stabilize and potentially reduce the retail price of electricity for businesses and ratepayers. However, Figure 1 reveals a widening price differential between RTO and non-RTO states..."

December 17, 2007
Ex-Parte Testimony in Morgan Stanley v. Snohomish
"A group of economists, including three expert witnesses from the underlying FERC case, filed an amicus curiae brief with the Supreme Court in Morgan Stanley v. Snohomish. In the main, the brief reiterates their original testimony. The brief makes a number of claims that are simply erroneous. Rather than cite authoritative primary sources, the economists rely on secondary or even tertiary sources. In several cases, the brief has searched out references that have been addresses in the original case or parallel cases at FERC, which a number of the authors would know to have been in error. This brief should be considered ex-parte testimony, and poorly researched testimony at that."

December 17, 2007
"Instant Request" to the Federal Energy Regulatory Commission
"Today, a national coalition had petitioned FERC to "expand the scope" of its proposed Federal Power Act Section 206 'investigation'. The Coalition is requesting that the Commission "address the core issues of whether the RTO markets are producing unjust and unreasonable wholesale power prices."

August 29, 2007
A Rebuttal to Dr. Hogan: "Looking for the 'Voom'"
Earlier this year, Dr. William Hogan issued a paper on the regulation of wholesale electricity markets titled, "Acting in Time: Regulating Wholesale Electricity Markets". Mr. McCullough has written a rebuttal to Dr. Hogan's paper noting that the market set-up favored by Dr. Hogan will not reduce price volatility, and does little to encourage the investments needed to meet our nation's growing demand.

 

2006

September 26, 2006
Did Amaranth Advisors LLC Attempt to Corner the March 2007 NYMEX at Henry Hub?
In what Amaranth's founder, Nicholas Maounis, called "a series of unusual events,"in only a few days in September 2006, Amaranth lost $6 billion (65% of the fund's total value). On September 14 alone, it lost $560 million on its natural gas trades. While the financial disaster is impressive, a more pressing issue of far more concern is how a small player in the natural gas trading sector amassed a natural gas position significantly larger than NYMEX without comment or intervention by FERC, the SEC or the CFTC. As an energy research firm with expertise in decoding Enron market manipulations during the Western Market Crisis of 2000-2001, the downfall of Amaranth suggests that Congress should close the " Enron loophole."

May 18, 2006
Developing a Power Purchase/Fuel Supply Portfolio: Energy Strategies for Cities and Other Public Agencies
"One year ago, President Bush signed the Energy Policy Act of 2005 into law. At the time, Senator John McCain commented: 'This bill left no lobbyist behind.' Indeed, a close reading of EPAct05 reveals that Congress paid scant attention to U.S. energy statistics while drafting the solutions found in the bill.  As we now grapple with its legacy of legislative ineptitude, I believe we must go back to energy basics before we can truly help our consumers. When in a muddle, it is difficult to recognize a fundamental shift in market realities. The last fifteen years of inexpensive natural gas provided a market advantage to simple natural gas units. Now high capital cost, low fuel cost coal units are gaining ascendancy. Entities with advantages in financing will be able to employ emerging technologies with high capital costs and low fuel costs. This will put the economic advantage back in the court of public power."

May 8, 2006
Robert McCullough's Report to the Democratic Policy Committee on Regulation and Forward Markets
For additional material and information concerning this matter please also visit the testimony web page of this website.

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2005

April 12, 2005
Enron's Per Se Anit-Trust Activities in New York
In June 2004, our review of Enron's emails found material regarding Enron's per se anti-trust activities in Alberta. "Project Stanley" involved a simple market division arrangement between Enron and Powerex. During high load periods, off-system imports from Powerex made them the "pivotal supplier" in Alberta. Enron's John Lavorato designed a scheme to disguise the pivotal supplier by allowing Enron to make the price setting bid in Alberta, thus disguising the arrangement from the province's market surveillance officials.

April 12, 2005
Farmers Outperform Sheiks: Why Adding Ethanol to the U.S. Fuel Mix Makers Sense in a $50-plus Barrel Oil Market
Why ethanol is economically competitive with gasoline and will remain so when oil prices are above $44/barrel

April 9, 2005
Creating Scarcity from Abundance
Reports from California policymakers suggest the possibility of blackouts in the upcoming summer. This is a reflection of California's continued pursuit of a centralized administrative solution to reliability leaving it ill-equipped to address everyday operational issues. In particular, a California Independent System Operator (CISO) study forecasts forced outages higher than the ISO's 7% operating reserve criterion. If this is the case, either the outages need to be addressed or the criterion increased.

February 15, 2005
Employment Impacts of Shifting BPA to Market Pricing
The proposed federal budget has includes a provision to raise BPA’s rates 20% per year to match market rates. While the concept of market rates is always attractive, this proposal carries risks for both the regional economy and the Western.

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2004

June 5, 2004
ERCOT BES Event
An explanation of Balancing Energy Services published by Electric Reliability Council of Texas (ERCOT) on June 5, 2004. Robert McCullough reports that this is not the first time the balancing energy price has been suspect, and that wholesale energy buyers in Texas should be alarmed.

June 28, 2004
Reading Enron's Scheme Accounting Materials
An explanation of the relevance of recently released internal accounting information from Enron's West Power Desk in connection with the current FERC investigation of market manipulation in the Western Energy Markets

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2003

August 14, 2003
A Matter of Seconds: Blackout Report
An examination of the August 14, 2003 blackout; Robert McCullough faults the lack of communication and organization within the centralized institutions responsible for maintaining the North American grid.

May 28, 2003
Fat Boy Report
Regional economic losses from Enron's "Fat Boy" trading scheme.

May 16, 2003
CERA Decision Brief
A rebuttal to a report by CERA (Cambridge Energy Research Associates) on the FERC's Final Staff Report in Docket No. PA02-2. Robert McCullough argues against CERA's findings and provides data and sources of information supporting his conclusions.

January 16, 2003
California Electricity Price Spikes: The Factual Evidence
A response to "California Electricity Price Spikes: The Facts" by Susan Pope. Robert McCullough contests Pope's findings.

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2002

November 29, 2002
C66 and Article Congestion Transmission in January 2001
This memorandum looks at how the California Independent System Operator (ISO) caused artificial congestion on transmission lines due to "C66" type contracts that were intended to ensure transfer capability on the intertie.

September 17, 2002
Three Crisis Days at the California Crisis
A report to the California State Senate's Select Committee to Investigate Price Manipulation that examines the significance of events on three specific days. Robert McCullough explains that the California Independent System Operator's ineffectual management of the electric system may have allowed market players to manipulate the market.

July 9, 2002
Market Efficiencies
A brief report on the efficiencies of competitive markets.

June 26, 2002
Senate Fact Sheet
A fact sheet produced for the U.S. Senate concerning key facts that are misrepresented in discussions about the California electricity crisis.

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June 5, 2002
Congestion Manipulation "Death Star"
Analysis of several documents on Enron Corporation's manipulation of the California Independent System Operator produced by Robert McCullough at the request of California State Senator Joseph Dun
n.

May 5, 2002
Enron's Workout Plan
McCullough Research report regarding Enron's workout plan, "OpCo"

March 31, 2002
A History of LJM2
The history of LJM2, one of Enron's unaffiliated entities managed by Andrew Fastow

February 7, 2002
Understanding LJM
McCullough Research report regarding Enron's LJM.

January 22, 2002
Understanding Whitewing
McCullough Research report regarding the Enron financial vehicle, "Whitewing."

January 10, 2002
Deconstructing Enron's Collapse

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2001

January 19, 2001
Wholesale Pricing and Location of New Generation
Robert McCullough discusses past, present, and future factors affecting wholesale pricing in the electric market.

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