In a surprising bit of candor, the chief political architect ofCalifornia’s 1996 electric industry restructuring law last weekrevealed that out-of-state energy companies paying high prices forgeneration assets, exceeded state lawmakers goals of gettingconsumers out from under the enormous stranded costs of the state’sthree major investor-owned utilities.
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In a surprising bit of candor, the chief political architect ofCalifornia’s 1996 electric industry restructuring law told a groupof industry participants at a statewide energy roundtablediscussion in San Diego that the state’s lawmakers intentionallyderegulated generation to draw out-of-state capital to pay off theenormous stranded costs of the state’s three major investor-ownedutilities.
Taking a cue from stronger cash market prices, the futuresmarket continued higher yesterday as buyers pressed prices throughseveral key resistance levels. After gapping higher on the open at$2.55, the January contract moved mostly sideways before checkinglower to fill in the gap late in the morning. However, from thereit was all gravy for bulls, who bid the prompt month up 7.6 centsto its $2.585 close.
Gas buyers certainly had no complaints about “storm hype”keeping prices artificially high Tuesday. Even with one of the mostdangerous hurricanes of the century pounding the Bahamas andbearing down on the southeastern U.S., its relative lack of threatto Gulf of Mexico production did nothing to avert cash price dropsof a dime or more-sometimes much more-in nearly every market. Onlythe Northern California points (Malin and PG&E citygate)managed to keep their declines in single digits, and even they fellalmost a dime.
The Maritimes & Northeast Pipeline (M&NE) started anopen season yesterday asking for capacity requests from buyersintent on using M&NE’s interconnect with Algonquin’s proposedHubLine project at Salem, MA. Requests will be received throughSept. 30. Maritimes’ Canadian affiliate, Maritimes & NortheastPipeline Limited Partnership, will contemporaneously conduct anopen season for its pipeline in Canada, the company said.
Gas buyers could have been forgiven Monday for modifying apopular movie’s catchphrase and screaming, “Show me the weather!” Autility buyer reporting “beautiful” conditions outdoors in theNortheast said it seemed odd that prices could continue to rise inthe face of moderate weather in most major market areas outside theSouth. Cash quotes ranged from flat to barely higher at Northeastcitygates to as much as 15 cents up at the PG&E citygate. Mostgains tended to be on either side of a nickel.
For the second week in a row, cooler temperatures and spikingcash prices piqued the attention of buyers Monday, prompting shortcovering amid some fresh buying. That enabled the prompt Januarycontract to gap higher on the open, and quickly move to majorresistance at $2.00. But the buying dried up and January was tradedmostly sideways before ticking down at the final bell. Januaryfinished at $1.952, up 9.4 cents for the day.