Attempt

Southern California Gas’ so far ill-fated attempt to sell asmall metropolitan-based underground storage field is catchingpotential flak from regulators and nearby residents fueled by a36-page report that accuses the nation’s largest natural gasutility of unethical, if not illegal, business practices. Aprehearing conference will be convened June 11 by an administrativelaw judge at the California Public Utilities Commission to begin aninvestigation into the alleged violation of the regulatory body’srules.

Southern California Gas’ attempt to sell its smallest LosAngeles Basin underground natural gas storage facility has beenabruptly halted by state regulators while an investigation isconducted into how the nation’s largest gas utility has dealt withregulators and surrounding landowners in the Eastern LA suburb ofMontebello, CA, bordering the storage facility. It is now in thehands of the California Public Utilities Commission, which couldassess some large fines if SoCalGas is found to have violated staterules.

Southern California Gas’ attempt to sell its smallest LosAngeles Basin underground natural gas storage facility has beenabruptly halted by state regulators while an investigation isconducted into how the nation’s largest gas utility has dealt withregulators and surrounding landowners in the Eastern LA suburb ofMontebello, CA, bordering the storage facility. It is now in thehands of the California Public Utilities Commission, which couldassess some large fines if SoCalGas is found to have violated staterules.

After an early attempt to take out prior highs was rebuffedyesterday, natural gas futures trickled down to easily establish anew low for the week at $2.19. Bears were egged on by a number offactors, which include a rapidly deteriorating technical pictureand expected weekend physical demand fall-off, sources agreed. TheJune contract finished at $2.218, down 3.6 cents for the day.

Technical analysis was originated by Charles Dow in the late1800s as an attempt to interpret recurring historical pricemovements displayed by a group of stocks, which have since evolvedinto today’s Dow Jones Industrial Average. He would have been proudof the natural gas futures market last week. For four days the Maycontract ebbed and flowed within a 10-cent trading range until itbroke higher Friday in a technical buying spree. But as if it werefollowing the same script rehearsed during the prior two tradingdays, the May contract couldn’t hold onto its gains Friday,releasing them in the form of profit taking ahead of the weekend.The May contract capped the week with a 2.7-cent advance to $2.096after notching a $2.15 high.

The usual suspects are at it again, as Pennsylvania Rep. Frank Tulli (R-106) and Sen. Frank Piccola (R-15) reintroduced a gas deregulation bill last Thursday. Their previous attempt to deregulate service to small commercial and residential customers failed to pass in Pennsylvania’s legislature last fall. Unlike the last try, however, this legislation is supported by a natural gas gross receipt tax (GRT) cut proposal from Governor Tom Ridge, enabling the bill to jump a large hurdle it was unable to overcome last time around (See NGI, Feb. 1).

NIPSCO Industries is changing its name to NiSource Inc.(pronounced Nye-source), in an attempt to signal a new directionfor the company as a multi-state supplier of energy and waterresources and related services. The company’s logo will remain thesame, continuing to incorporate beams bursting from a point oflight.

The upcoming Texas legislative session will see another attemptto merge the Texas Public Utility Commission and the Texas RailroadCommission to create a single agency regulating natural gas,electricity, oil production, as well as telecommunicationsutilities.

El Paso Natural Gas has given up on its first attempt tode-bottleneck the constrained Bondad System in the San Juan Basin(see Daily GPI, Oct. 19), but is approaching FERC again in hopesthat a second try will be more fruitful in adding capacity to apoint that some gas traders sarcastically call “Bondage.”