Calculations

The FERC Enforcement Staff, responding to claims by Energy Transfer Partners (ETP) that FERC’s price calculations were flawed, defended its use of basis price quotes as part of its charge that ETP manipulated the physical gas market to create an artificial gas price that benefited its financial market position. A public version of the latest salvo from the regulatory agency was made available last Tuesday.

The FERC Enforcement Staff, responding to claims by Energy Transfer Partners (ETP) that FERC’s price calculations were flawed, defended its use of basis price quotes as part of its charge that ETP manipulated the physical gas market to create an artificial gas price that benefited its financial market position. A public version of the latest salvo from the regulatory agency was made available Tuesday.

While completing its calculations for fiscal 2002, which ended for Piedmont Natural Gas on Oct. 31, the Charlotte, NC distributor Tuesday said its earnings for fiscal year 2003, which ends Oct. 31, 2003, are expected to be between $2.05 and $2.15 per diluted share.

Mirant shares fell from the high $3.70s early last week to the mid $3.20s Friday after CEO Marce Fuller warned on Tuesday that the company was about 20 cents/share behind where it expected to be at this time in the year. Fuller expressed concerns about Mirant’s ability to meet its earnings forecast of $1.60/share for the year. The current average of Wall Street analysts’ estimates is $1.54 with a low of $1.45 and a high of $1.69, according to Thomson Financial.

FERC’s order requiring potential refunds of up to $69 million on January bulk power sales in California has come under further assault, with San Diego County claiming that the “proxy market clearing price” established by the Commission in the order allows sellers to recover almost double their marginal production costs, and that the decision not to subject sales during non-Stage 3 emergencies to refunds was grossly unfair. It further blasted FERC for not ordering power suppliers to publicly disclose their rates and costs.

FERC’s order requiring potential refunds of up to $69 million onJanuary bulk power sales in California has come under furtherassault, with San Diego County claiming that the “proxy marketclearing price” established by the Commission in the order allowssellers to recover almost double their marginal production costs,and that the decision not to subject sales during non-Stage 3emergencies to refunds was grossly unfair. It further blasted FERCfor not ordering power suppliers to publicly disclose their ratesand costs.

Northwest said it was unable to do its OFO calculationsyesterday and noted that scheduled quantities of gas flowing norththrough the Kemmerer Compressor for gas day Nov. 9 did not exceedKemmerer capacity. As a result it said it would not call an OFO forgas day Nov. 9. However it warned that an OFO was still possiblefor gas day Nov. 10.

The following is a clarification of a story titled “NGC’sCapacity Posting,” which ran in Daily GPI, April 22: Thecalculations and conclusions described in the story were totallythose of Michael J. Harris of the Reed Consulting Group ascontained in a FERC filing made by the producers protesting the NGCcapacity contracts on El Paso. The Prebon Energy brokerage housemade no predictions. A footnote to the filing says Prebon, whichhas offices in Jersey City, NJ, and Houston, supplied futurequotes at a specific time – 11:30 a.m. on March 30 – of the SanJuan Basin-California border basis differential. The quoted remarksregarding the expected San Juan-SoCal basis differential for thefuture and the attractiveness of the NGC capacity to other shipperswere those of Harris and the Reed Consulting group. Further Prebonsays it did not give basis information to Mr. Harris or the ReedConsulting Group but that the basis information attributed toPrebon was supplied by one of the parties to the filing. NGIregrets the error.