Anticipated

As sources had anticipated, forecasts of high temperatures once again infesting much of the nation were insufficient to overcome the double drag on prices of a big futures drop on the previous afternoon and the fall-off in industrial load that accompanies a weekend. Outside of continuing moderate firmness at Rockies and Pacific Northwest points, the rest of Friday’s market ranged from flat to about 20 cents lower. Declines on either side of a dime were most prevalent.

An eagerly anticipated comprehensive study of the nation’s electrical transmission highway unveiled last Wednesday by the Department of Energy (DOE) recommends that the federal agency review the grid every two years to pinpoint “national interest” transmission bottlenecks. The report also says that Congress should give FERC limited federal transmission siting authority and recommends that regional transmission organizations (RTOs) be made responsible for ensuring that transmission bottlenecks are addressed.

Consultants at Energy Security Analysis Inc. said they expect a short-lived dip in gas prices sometime this month to be followed by a gradual strengthening in prices this summer because of increases in gas-fired generating capacity and a recovering economy. However, ESAI said it does not believe prices will catapult back to $10/MMBtu anytime soon.

Adding insult to injury, Enron Corp.’s bankruptcy may complicate its anticipated sale of $800 million in assets that were already on the books because of due diligence issues, the company disclosed Monday. The asset sales, slated to be completed by the end of this month, include oil and natural gas fields in India, Brazilian gas utilities and its stake in a Puerto Rican power plant and liquefied natural gas terminal. Enron remains optimistic, however, that the sales will close, according to a spokesman.

The market eked out small increases Tuesday that generally were a nickel or less. A screen uptick of nearly a dime provided some upward momentum, sources said, but cash traders more likely were anticipating what is expected to be the smallest AGA storage injection report in many weeks.

FERC’s widely-anticipated move last week to extend price controls on bulk electricity transactions to the entire Western region around the clock blew through Washington with hurricane force, shifting the political winds away from price caps in the Senate. However, just as the volatile issue of price caps began to subside somewhat on Capitol Hill, a new debate emerged in Congress over whether the agency should be more aggressive in ordering generators to provide refunds for overcharges that California Gov. Gray Davis said run into the billions of dollars.

Weekend prices were soft as expected, but probably fell less than many traders were anticipating. Except for sizeable losses of 20-30 cents or more in the Rockies/San Juan and at PG&E-related points, nearly all of Friday’s declines were 15 cents or less, and a majority of those were around a nickel.

FERC “took a large step” forward last Wednesday by approving the much-anticipated market monitoring and mitigation plan for the out-of-control California energy market, but it didn’t go far enough, according to officials with Williams Companies, the New York Public Service Commission and Dynegy Corp. California lawmakers, however, were far more blunt in their assessments.

FERC “took a large step” forward Wednesday by approving the much-anticipated market monitoring and mitigation plan for the out-of-control California energy market, but still it didn’t go far enough, according to officials with Williams Companies, the New York Public Service Commission and Dynegy.