Concern

Southwestern Connecticut and southern Nevada will be the areas of concern for the electric industry this summer, the North American Electric Reliability Council (NERC) said Wednesday in its 2002 Summer Assessment. Across the rest of the nation, there is expected to be adequate and reliable power supply to meet demand this summer despite the current drought, NERC said.

FERC Commissioner Pat Wood III said last week that while he doesn’t advocate asking Congress to restore the agency’s authority to regulate gathering, he is concerned about problems that offshore producers may be facing in a de-regulated market.

As the traditional storage withdrawal season came to an end last week with working gas near record lows at 627 Bcf (19% full) and 404 Bcf lower than the same time last year, there were mixed opinions on Wall Street about what the 2001 refill season might hold. Lehman Brothers and Salomon Smith Barney warned that storage might be refilled at a record rate this year, possibly prompting a bearish reaction in the market in the short-term despite the extremely low level of working gas currently. Meanwhile, UBS Warburg and IFR Pegasus said that scenario was very unlikely.

Wednesday dawned with a combination of relief and continuingconcern over gas supplies for the northern half of California inthe wake of the federal emergency order expiring at midnightTuesday. The expiration left Pacific Gas and Electric Co. stillscrambling to get its main suppliers to extend current contractsinto the coming weeks and months. State regulators are expected torule today on a PG&E request for emergency supplies fromSouthern California Gas Co., something the latter utility isstrongly opposing.

The Commerce Commission of New Zealand, voicing concern that onecompany would control the country’s natural gas markets, onThursday rejected the takeover by Royal Dutch/Shell Group andApache Corp. of Fletcher Challenge Energy, the country’s largestenergy exploration company. For the moment anyway, a rejected bidwould end Houston-based Apache’s attempt to increase its Canadianholdings.

Where once producers’ biggest worry was whether they would get adecent price for their gas, the concern now is whether they canproduce enough to meet market demands.

Where once producers’ biggest worry was whether they would get adecent price for their gas, the concern now is whether they canproduce enough to meet market demands.

In what is becoming a bizarre case of concern to future merchantenergy project proponents, California regulators rescued a secondmerchant underground natural gas storage project from the trashheap last week by refusing to support a recommendation to deny theproposal and postponing the item for a future meeting. Analternative to the proposed administrative law judge (ALJ) decisionis likely to be developed by one of the members of the CaliforniaPublic Utilities Commission.

In what is becoming a bizarre case of concern to future merchantenergy project proponents, California regulators rescued a secondmerchant underground natural gas storage project from the trashheap Thursday by refusing to support a recommendation to deny theproposal and postponing the item for a future meeting. Analternative to the proposed administrative law judge (ALJ) decisionis likely to be developed by one of the members of the CaliforniaPublic Utilities Commission.