Conditions

With temperatures dropping considerably out of theirtriple-digit-heat conditions on Friday, California energy officialsbegan assessing the economic and operating impact of rotatingblackouts in numerous San Francisco Bay Area neighborhoods lastWednesday and the curtailment Thursday of 135 large industrialcustomers in Sacramento and Stockton totaling 300 MW.

With temperatures dropping considerably out of theirtriple-digit-heat conditions on Friday, California energy officialsbegan assessing the economic and operating impact of rotatingblackouts in numerous San Francisco Bay Area neighborhoods lastWednesday and the curtailment Thursday of 135 large industrialcustomers in Sacramento and Stockton totaling 300 MW.

Natural gas futures finished on a sour note Wednesday as tradersalleviated overbought conditions and took profits both before andafter the release of fresh storage data. After opening lower, theApril contract worked its way down throughout much of the sessionbefore tumbling at the closing bell to finish at $2.71. The promptmonth’s 8.9-cent decline was trumped only by the May contract,which dropped 9 cents to finish as $2.747. Estimated volume wasmodest with only 63,810 contracts changing hands.

More favorable operating conditions allowed Texas Eastern to cancelMonday the OFO for its M-3 market zone that began a week earlier (seeDaily GPI, Jan. 19). All M-3 OperationalBalancing Agreements that were suspended are back in effect, Tetcosaid, and storage nominations may be restored to pre-OFOlevels. However, a restriction on IT gas sourced upstream of M-3 anddelivered there is still in effect. Due-shipper imbalance gas may betaken in all zones again, Tetco said, as long as it is scheduledproperly and taken evenly through the rest of January. Downstreamaffiliate Algonquin similarly canceled Monday the Critical SystemWarning it had posted Jan. 17 (see Daily GPI, Jan. 19), but left in place restrictions onmainline forward hauls for Authorized Overrun gas, interruptibleservices and due-shipper makeup gas.

Citing cold weather and operational conditions, MRT issued anOFO Wednesday. All IT and AOR (Authorized Overrun) volumes flowingnorth of the Glendale (AR) Station on the Main Line wereinterrupted. Affected customers should re-source their Main Linesupplies to the East Line or take their Main Line IT and/or AORreceipts to zero, MRT said.

MRT issued an OFO Tuesday due to anticipated cold weather andoperational conditions; the order will remain in effect today anduntil further notice. It is interrupting all IT volumes andAuthorized Overrun gas flowing on the mainline north of theGlendale, AR, Station. MRT will not allow underdelivery of gasduring this time but will continue to accept positive imbalancenominations.

Citing anticipations of cold weather and operational conditions,MRT issued an OFO effective today until further notice. Thepipeline will interrupt all IT volumes and Authorized Overrun gasin excess of contract demand flowing north of the mainline’sGlendale (AR) Station. Firm customers must restrict mainlinevolumes to within their contracted zone entitlement and primarypath. MRT will have a zero tolerance for underdeliveries during theOFO but will continue to accept positive imbalance gas. The OFOsupersedes a System Protection Warning that took effect Wednesday(see Daily GPI, Dec. 15).

Improving crude oil market conditions usually are accompanied byincreasing political scrutiny into rising prices. A good example ofthat is occurring in California where Attorney General Bill Lockyerhas vowed to probe deeply into the mergers of major oil and gasproducers following a report that shows consolidation is one of thereasons California has experienced some of the highest gasolineprice spikes in the nation.

Tennessee said operating conditions had improved enough Monday toallow it to lift an OFO Action Alert implemented Saturday (see DailyGPI, Nov. 12). Weekend OFOs by PacificGas & Electric, Southern California Gas and Northern Natural Gasalso were no longer in effect Monday.