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, 2015


September 30, 2015
Decrypting New York’s “Secret” Electric Bids
The New York Independent System Operator (NYISO) asserts that it masks the identities of the bidders in its electric markets to avoid facilitating predatory pricing and collusion. However, the masked generator IDs can easily be decoded. Further, since firms’ cost and revenue information can be determined from public sources, industry bidding strategies are likely known throughout the NYISO market. This opaque system keeps only one group in the dark: the public.

September 9, 2015
Market Power in West Coast Gasoline Markets: September Update
Since February 2015, West Coast consumers may have been overcharged more than $6 billion due to abnormally high gasoline prices. To explain recent price spikes, refiners have pointed to several highly-publicized supply disruptions. However, publicly available data show no significant impact on gasoline supplies during this time period.

September 8, 2015
August 10, 2015 PADD-2 Gasoline Spike at BP Whiting
On Saturday, August 8, 2015, British Petroleum Whiting’s largest distillation unit, Pipestill 12, was closed for repairs. In response, the average price of gasoline in the Midwest rose over $0.30 in one week, a 13% increase, to $2.79/gallon, exceeding the national average for the first time in over a year. There is a strong sense that this is a trading and pricing driven event having little to do with fundamentals.

July 23, 2015
Market Power in West Coast Gasoline Markets: July Update
Unsurprisingly, the industry’s profit margins have recently reached record highs – nearly doubling over the first half of 2015. It is no coincidence that these record margins have been reaped at the same time that West Coast gasoline consumers have been overcharged in excess of $4 billion.

June 23, 2015
Market Power in West Coast Gasoline Markets: June Update
McCullough Research maintains that today’s gasoline prices on the West Coast represent an exercise of uncompetitive market power by gasoline producers who operate in a highly concentrated industry. What follows is the latest update in our series of reports on gasoline prices and refineries in the West. We estimate that in the four months after the Torrance explosion, market power has cost consumers in California, Oregon, and Washington nearly $2.8 billion.

May 25, 2015
Site C Business Case Assumptions Review
While the cost and choice of options deserve further analysis, the simple conclusion is that Site C is more expensive – dramatically so – than the renewable/natural gas portfolios elsewhere in the U.S. and Canada. Our analysis indicates that the Site C portfolio may well be twice as costly as the renewable/natural gas portfolio adopted elsewhere.

May 14, 2015
Market Power in West Coast Gasoline Markets: May Update
We estimate that in the three months after the Torrance explosion, market power has cost West Coast consumers over $1.8 billion above what they would have paid had gas prices re-mained commensurate with crude oil prices.

April 7, 2015
2015 Paducah Update
This primarily political transaction has proved costly for Pacific Northwest ratepayers who are now carrying unneeded inventories of nuclear fuel at higher than market – now considerably higher than market – costs.

April 6, 2015
Market Power in West Coast Gasoline Markets: April Update
On the week of March 23, McCullough Research issued a report that outlined the discrepancy between the dramatic rise in gasoline prices and the minimal effect the [Torrance] refinery explosion had on actual gasoline production and stocks. The fact that supply remained largely unaffected, coupled with persistently low crude oil prices, has led to the natural conclusion that recent high gasoline prices represent not a reaction to market forces, but instead an exercise of market power.

March 23, 2015
Market Power in West Coast Gasoline Markets
On February 18, 2015 an explosion took place at the Exxon-Mobile refinery at Torrance, California. The severity of the accident is as yet unclear, but while retail gasoline prices increased markedly, California’s production levels and inventories were unaffected. In fact, contrary to some comments in the press, the supply situation is more favorable to consumers than it was the previous year.

March 20, 2015
Daniel Poneman and the Paducah Contract
Management responsibilities for USEC’s American Centrifuge Project demonstration were taken over by the US Department of Energy through its Oak Ridge Tennessee National Laboratory. USEC was kept on as a subcontractor for the project. Two months later, Depart-ment of Energy Secretary Ernest Moniz announced that Deputy Secretary Poneman would be leaving DOE in the fall. Centrus Energy Corporation has now hired Daniel Poneman to serve as CEO and President at an annual salary of $1.7 million.

January 2, 2015
Data and Methodological Errors in the Portland Commercial Street Fee
During the last six months, the Portland Bureau of Transportation has attempted to as-semble a complex set of statistics on revenues, trips, building size, employment, and ar-eas of activity for Portland businesses and agencies. As with all “big data” analyses, the devil is in the details.


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
Columbia Generating Station FY 2013 Fuel Management Plan Rev. 0
Columbia Generating Station FY 2013 Fuel Management Plan Rev. 1
Columbia Generating Station FY 2014 Fuel Management Plan Rev. 0
Energy Northwest Tails Fuel Procurement Transaction and Pre-Meeting
          Materials Package
Agreement between the Department of Energy and Energy Northwest
Project Review Committee Meeting Project 628801
Energy Northwest Special Executive Board Meeting April 26, 2012
Energy Northwest Special Executive Board Meeting May 10, 2012

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.

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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

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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.

See related media attention here.

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.

See U.S. Senator Maria Cantwell’s letter to the FTC here.

See Senator Cantwell’s press release here.

See related media attention here.

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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.

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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 here.

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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 coverage here.

See the December 2, 2009 televised CBC story covering the report here. The Manitoba Hydro segment starts at about the 9:00 mark.

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%.

See the June 5, 2009 New York State Assembly press release here.

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.

View the methodology used in “Transparency in ERCOT: A No-cost Strategy to Reduce Electricity Prices in Texas” here.

See the May 5, 2009 AARP Texas press release here.

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.

View the presentation to the 2009 EIA Energy Conference: A New Climate for Energy here.

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.

See the March 3, 2009 92nd Assembly District press release here.

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.

View AARP Connecticut's February 24, 2009 press release here.

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.”

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

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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)

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

See U.S. Senator Maria Cantwell's press release issued August 7, 2008 here, which highlights Robert McCullough's August 6 report.

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."

View French Government preliminary report here: English / French

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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.

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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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April 12, 2005
Enron's Per Se Anti-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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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

June 5, 2004
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.

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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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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.

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

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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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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