Case

The Department of Energy (DOE) has activated a major E-government initiative that will streamline the federal government’s process for authorizing imports and exports of natural gas, using the Internet and credit cards.

The utility is obligated under a franchise agreement to pay the city a fee based on its income from gas sales to customers. However, since deregulation those fees have fallen as large customers have migrated to alternative suppliers. The city charged that the utility purposely violated its franchise agreement by allowing large customers to buy gas from other companies (see Daily GPI, July 6, 1998).

Prosecutors wading through the burgeoning and expensive Enron Corp. case may consider charges in the next month related to Whitewing and Yosemite, two of the company’s partnerships that helped the former energy merchant create cash flow and hide assets.

Just in case someone hadn’t gotten the message, Ohio Gov. Robert Taft has issued an executive order, good through the end of his term in office in 2006, prohibiting the issuance of state permits to drill for oil and gas in Lake Erie.

In a case that tests the limits of how far California went in establishing third-party, non-utility natural gas storage, two of the state’s energy heavyweights — Pacific Gas and Electric Co. and Calpine Corp. — are going toe-to-toe over allegations that Calpine has “colluded” with a third-party storage operator, Lodi Gas Storage. PG&E’s utility wants state regulators to come down hard on both the merchant operators.

As has often been the case on Thursdays this summer, natural gas futures prices tumbled lower on the news that the market had injected another hefty volume of gas (83 Bcf) into underground storage facilities. The August contract was hardest hit by the sell-off as it fell to a new seven-month prompt contract low at $4.66. A small rebound was seen near the close, leaving the contract to finish the session at $4.731, down 14.5 cents for the day and nearly two dollars off its high from early last month.

Participants in the El Paso Corp. western power crisis settlement case on Friday announced they had taken the final procedural step to ensure the settlement is completed. The formal agreements were announced on Thursday (see Daily GPI, June 27).

If FERC ultimately finds in favor of various power suppliers in a dispute over whether refunds should be ordered as a result of dysfunctional power prices in the Pacific Northwest in 2000-2001, such a decision would have a “devastating impact” on the credibility of both the federal agency and its staff, an attorney representing the City of Seattle said last Monday.

The two federal judges in Houston and New York City who are overseeing Enron Corp.’s massive bankruptcy case ordered mediation last week in an attempt to clear some of litigation confronting the courts. In a joint hearing, Houston federal District Judge Melinda Harmon, who is handling shareholder lawsuits, and Manhattan federal Bankruptcy Judge Arthur J. Gonzalez, who is handling the overall Enron bankruptcy, ordered several parties to attempt settlements through a mediator. District Judge Kevin Duffy, located in Manhattan, agreed to serve as mediator, and Harmon and Gonzalez said in their joint order that the mediation results would be nonbinding, unless the parties otherwise agree. A spokesman for the University of California, the lead plaintiff in the shareholders’ lawsuit, said the university welcomed the courts’ action “to help speed restitution to those victimized in the Enron fraud.” Trey Davis added, “We will fight for our fair share during the mediation process and believe we are in a strong position to prevail on behalf of the shareholders.”