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Electric Load Loses Bite, Cash Finishes Softer

Electric Load Loses Bite, Cash Finishes Softer

After Monday's almost universal double-digit increases, cash prices were on auto-pilot Tuesday, as they trended down from the previous day's results. Many traders said Monday's run-up would be this week's high, pointing to moderating weather and the the completion of pipeline maintenance projects.

Oppressive heat caused Niagara Mohawk Power Corp., NYSEG and New Hampshire Gov. Jeanne Shaheen to issue power warnings in addition to the continuation of yesterday's New England ISO warning. NYSEG said Monday's peak electric demand was 28,378 MW, just 222 MW shy of the all-time New York state peak of 28,700 set on July 15, 1997. To make the electricity jam even worse, PP&L Inc. said their Susquehanna Unit 2 nuclear plant was "unexpectedly shut down" Tuesday after a transformer problem on the non-nuclear side of the plant. Officials said the plant will be up "as soon as possible."

Although the Northeast experienced its second day of extreme heat, price points reversed their direction from Monday's 10 to 18 cent gains. New York Citygate and Tetco M3 prices each fell 7 cents to the mid $2.60s. One Northeast trader, who heard incremental deals done at TCO Pool for $2.50, said he stayed away from the market Tuesday, searching for a better handle on the situation. "We weren't really active [Tuesday], because we want to see what happens. I think most of the climbing was done yesterday and that things will stabilize the rest of the week."

Forecasts calling for rain to enter the Midcontinent later this week put a damper on the price run-up in Chicago and other Midwest points, a trader said. Chicago Citygate finished in the high $2.30s and NGPL Midcontinent averaged in the mid $2.20s. With no major nuclear outages and the maintenance on Northern Natural ending tomorrow as scheduled (see Daily GPI, June 8), he is looking for Midcontinent prices to continue lower the next couple of days.

Tuesday's flat to slightly higher West Coast market should receive a shake up today, one source said, thanks to the end of a NOVA system outage, which cut off 1.2 Bcf to AECO since May 31. "Its a simple supply and demand problem. If your demand stays constant, and you get a large injection of supply, prices should go down."

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