August

At its final meeting before the August break, FERC last weekcleared its agenda of several major rehearing orders — includingOrder 637-B, which was a rehearing of Order 637-A, which was arehearing of Order 637. This time around the Commission refused tobudge on the majority of the policy calls it made in 637-A thataddressed regulation of the short-term natural gas transportationmarket.

Following Monday’s 7.5% price retracement, the natural gasfutures market continued lower yesterday as short and long-termtraders added to newly established short positions. Cash prices,pressured lower for the second day in a row by record-setting hightemperatures, were also seen as a negative price factor. Afteropening at $2.64, the December contract quickly established a new4-month low at $2.59 before settling at $2.643, a 2.2-cent declinefor the day.

After a spirited rally Tuesday that propelled the Augustcontract to its highest level since July 15, the market took abreather Wednesday as traders elected to wait on the sidelinesahead of fresh fundamental news. The prompt month finished down 0.6cents at $2.394 in choppy, range-bound trading.

Executing a plan first announced in August, Washington WaterPower will change its corporate name to Avista Corp. Jan. 1 thecompany announced Tuesday. All company operations will be unifiedunder the new name. Washington Water Power along with its WPNatural Gas division will combine to form an operating division ofthe new company called Avista Utilities. On Jan. 4, the firstbusiness day of the new year, all Washington Water Power stock willbe traded for the first time as Avista Corp. common stock under theticker symbol “AVA”. According to a company spokesman, the namechange allows the company more flexibility beyond its utilityidentity and geographic location.

After taking Aquila Gas Pipeline off the auction block inAugust, UtiliCorp United announced plans last week to buy back 5.4million common shares of the company, representing the 18% ofoutstanding AQP common shares it does not already own, for $8 pershare. The price represents a 23% premium to the closing AQP shareprice of $6.50 on Nov. 11.

In the wild final hours of the California state legislature’s1998 session Monday (August 31), another bill aimed at curbing theleeway of the state energy regulators was passed (Senate Bill 1757)and is now awaiting the governor’s signature. A California PublicUtilities Commission representative at the state capitol said theregulators’ remain neutral on the bill, but may take a positionwhen they meet for a regularly scheduled commission conferenceThursday (Sept. 3).

In an 11th-hour move yesterday, California regulators delayeduntil August a proposed interim action that would expand naturalgas unbundling and set an aggressive schedule for a final gasrestructuring decision by year end. The proposal, which includesunbundling billing and eliminating any restrictions on current gasaggregation among residential and small business customers, will beconsidered when the California PUC meets again Aug. 6.

The August Nymex contract probed lower yesterday but managed torebound before the close, bringing an end the price slide sincelast Thursday’s $2.425 high. Tuesday’s choppy trade left the spotmonth up 1.7 cents at $2.226 on the day. Despite the tight tradingrange and modest gain posted for the day, the session was anythingbut uneventful. Estimated volume confirmed the active market with53,327 contracts changing hands.

As of last Friday, 35 days away from the Federal EnergyRegulatory Commission’s August recess and counting….there wasstill no official sign of its promised plan to cure the gas marketof its ills. But rumors abounded that the alleged “gas options”paper has been circulated to pipelines and producers and isundergoing a variety of alterations. There also was one report thatthe plan might not, after all, see daylight until after the recess.