Charges

Unsatisfied with the response to their pleas for electricity refunds, California officials took some solace in federal regulatory indications that there may be as much as a billion dollars in refunds to the state because of alleged natural gas border-price manipulations in the 2000-2001 time frame.

FERC Commissioner Nora M. Brownell pledged her support Wednesday for a Commission investigation into charges that Enron Corp. may have manipulated energy prices in California’s forward markets, saying the agency needs to “clear up [any] lingering doubt” about this before it can begin to build a “stable, predictable market” in the western state.

The board of directors of the Natural Gas Supply Association (NGSA) issued a statement last Wednesday, pledging its “full confidence” in the “integrity and leadership” of the producer group’s president, R. Skip Horvath, who was accused of “financial misconduct” and violating internal control procedures in lawsuits brought by two former NGSA employees.

The board of directors of the Natural Gas Supply Association (NGSA) issued a statement late Wednesday, pledging its “full confidence” in the “integrity and leadership” of the producer group’s president, R. Skip Horvath, who was accused of “financial misconduct” and violating internal control procedures in lawsuits brought by two former NGSA employees.

In a story that ran in the Oct. 25 edition of NGI’s Daily Gas Price Index, titled “El Paso Posts Solid Earnings, But Special Charges Lower Profits,” some comments were incorrectly attributed to El Paso Merchant Energy Group President Ralph Eads III. The comments were made by Greg Jenkins, CEO of El Paso Global Networks. The comments also contained some inaccuracies. Jenkins said, “The [global network business] has deteriorated much more over the course of the past several weeks and few months. The regulatory environment in our judgement is viewed unfavorably against real competition, and today the market fundamentals are very weak. Consequently we are reducing our focus [on telecommunications]. Our focus next year is going to be on those activities where that value is recognizable, that being the Texas market in particular, and maximizing returns on those assets.” Jenkins’ was not referring to the merchant generation business, and El Paso Corp. has reaffirmed its confidence in merchant generation and its position in that market. NGI regrets the errors.

A FERC administrative law judge has found no improprieties, nor evidence of the exercise of market power in negotiated rate contracts between Transwestern Pipeline and two shippers on its system, which resulted in the shippers being charged as much as $27/MMBtu last February, far in excess of the pipeline’s allowed transportation rate of 38 cents/MMBtu (RP97-288-009).

A FERC administrative law judge has found no improprieties, nor evidence of the exercise of market power in negotiated rate contracts between Transwestern Pipeline and two shippers on its system, which resulted in the shippers being charged as much as $27/MMBtu last February, far in excess of the pipeline’s allowed transportation rate of 38 cents/MMBtu (RP97-288-009).

One trader suggested facetiously that the cash market should be arrested on vagrancy charges because it has no visible means of support. Prices continued to go up Wednesday, in most cases even more strongly than the day before, despite a dying tropical storm and further degradation of positive weather fundamentals. Most gains were in the teens, with most of those below a dime concentrated in the West.

El Paso Corp. said last week the market has proved wrong all charges that it manipulated California gas prices over the last year while its marketing/merchant power subsidiary held control over 1.2 Bcf/d of firm capacity on its affiliate pipeline, El Paso Natural Gas. El Paso Merchant relinquished control over most of that capacity on June 1 yet gas prices in California continued to be abnormally high in relation to prices elsewhere in the country, El Paso said.