Adequate

Northwest cautioned shippers Tuesday “to purchase adequate gas supplies and not to draft the pipeline during the upcoming weekend.” It went on to note that market-area weather had been cold for the previous few days, and that “extremely cold temperatures” were predicted to begin Sunday (Jan. 4). For last Tuesday’s gas day, withdrawals from Jackson Prairie storage were twice as high as scheduled nominations, Northwest said. If system drafting continues, “Northwest will be forced to evaluate customer-specific and/or general entitlements in order to stop any drastic decline in our Jackson Prairie balancing gas.”

Stakeholders are telling the Midwest Independent Transmission System Operator (MISO) that if adequate transmission were in place in the heartland, new developments of both coal-fired and wind-powered generation would occur, but for now there is insufficient transmission to keep up with new generating plants coming online in the region, a top official with MISO said last Wednesday.

The Energy Information Administration (EIA) said in its June Short Term Energy Outlook that gas production should be down more than 3% this year and supply concerns, though overblown, have been the root cause of prices remaining above $3/MMBtu (EIA said nothing of the liquidity crisis in the market, which may be pushing prices higher — see related story). It also expects the storage surplus to fill in for any supply declines on the production side.

It’s no accident that Michigan will be sporting an additional 3,500 MW of generating capacity by the time summer peaks roll around, according to a Michigan regulator, who said his state is generator friendly and should be able to handle whatever demand challenges are ahead.

Maritimes & Northeast Pipeline failed to provide adequate back-up for their recent rate filing, Mobil Natural Gas said, in asking the Federal Energy Regulatory Commission (FERC) to require the pipeline to provide detailed records of its rate design and cost-of-service calculations (RP02-134).

After conducting its own research, the New York State Public Service Commission (NYPSC) said gas supplies are “sufficient” to meet forecasted demands of New York State customers this winter and prices are expected to be lower than last winter.

A new study urges ISO New England Inc. to continuously monitor generator unit availability to price and demand in order to ensure adequate market signals are in place to encourage sufficient generator availability during peak load periods. The same study, unveiled last Friday, also recommends that the ISO devote future monitoring efforts to the performance of new combined-cycle units, some of which have experienced poor availability.

The American Gas Association sees nothing but positives in the current gas supply situation despite the fact that inadequate supply in the face of strong demand growth has been behind the recent record increase in prices and expectations of more than $4 gas price averages this year.

The proposed Sonoran Pipeline project crossed its first hurdle yesterday as potential shippers expressed interest in an adequate amount of capacity on the proposed 1,030-mile gas pipeline. However, the market seemed to make those hurdles a bit taller as gas prices closed in on $2 in the Rockies and plummetting to nearly $5 at the border.