Despite recent indications that the Bush administration wouldtake a more hands-off approach to the California crisis, EnergySecretary Spencer Abraham late yesterday gave PG&E and SouthernCalifornia Edison another two weeks of breathing room by extendingemergency orders requiring gas and power suppliers to continuesupplying the cash-strapped utilities. The emergency gas order nowexpires at 3 a.m. (EST) Feb. 7.

In granting the extensions, Abraham urged the state to get towork to solve its own problems. He said only California canimplement the policies necessary to resolve the short-term andlong-term supply challenges. “Our action today is designed to givethe governor, the California legislature and other relevant partiesthe time to take necessary action. I strongly urge the parties toact immediately,” said Abraham. He also said he was keenly awarethat other western states have expressed concerns about their ownsupply situation and the impact the order is having on power pricesin their areas.

Despite the action, PG&E said it still is having troublegetting gas suppliers to comply with the emergency order originallyissued Jan. 19. “The gas supply situation is [not good],” utilityspokeswoman Staci Homrig said yesterday afternoon. “We are quicklydepleting our storage. Even under the order, J. Aron & Co. [asubsidiary of Goldman Sachs] has not delivered gas. They representabout 9% of our daily needs (1.5 Bcf/d in January).

“Oh yeah, we’ve been in contact with them,” she said. “We’vebeen in contact with the DOE, too. The other two suppliers who hadstopped delivering gas to us last week have made gas available tous under the order. They are Sempra Energy Trading and Western GasResources.” Homrig said PG&E expected DOE to take legal actionagainst those who didn’t resume deliveries. The order applied to 27gas suppliers, all of which supplied gas to PG&E within thelast 30 days.

“There’s not a lot I can say,” said J. Aron spokeswoman KateBaum. “J. Aron has always complied with the law and we intend tocomply with this order. That’s my statement. I can neither confirmnor deny anything else.”

Meanwhile, other suppliers who were not among those on the DOE’slist, were staying as far away from California as possible. “All Iknow is we’re not selling in California any more. A person couldget fired around here for doing that,” said one marketer. “All wehad in California were a few spot deals that expired at the end ofDecember. Needless to say we didn’t re-up them.”

Without the DOE’s order, PG&E would be back where it waslast week, with some suppliers stopping delivery, others planningto stop at the end of their contract terms and most suppliersunwilling to sell additional gas to the utility.

PG&E has said it has enough gas in storage to make up forthe lost supply under such a scenario until the first week inFebruary. Homrig said PG&E’s storage currently is well below50% full, or less than 16 Bcf and depleting rapidly by about 500MMcf/d to 1 Bcf/d. PG&E’s Pipe Ranger web site shows theutility has been averaging about 500 MMcf/d of withdrawals over thepast several days and is expecting a slight increase over the nextfew days.

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