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The controversial issue of whether the California Power Exchange(Cal-PX) has the authority to hold other buyers and sellers in thestate’s bulk power market liable for the ballooning unpaid powerpurchases of California’s two insolvent utilities will move into afederal courtroom on Tuesday.

The extremely higher costs of natural gas and electricity lastyear are reflected in the financial results announced Tuesday byone of the Pacific Northwest’s major combination energy companies,Bellevue, WA-based Puget Energy. The holding company for the stateof Washington’s largest investor-owned utility, Puget Sound Energy,recorded $40 million in receivables for excess power provided toCalifornia’s independent grid operator, Cal-ISO.

Record-breaking fourth quarter and year-end earnings havecreated more opportunities for U.S. independents this year, whichnow are flush with cash to ramp up North American exploration andproduction projects and many U.S.-based independents now areboosting capital spending in their E&P units to boost energyreserves, especially natural gas.

Duke Energy and Williams Gas Pipeline announced last Thursday that they closed the deal to buy the Gulfstream Natural Gas System project, a 743-mile natural gas pipeline planned for Florida, from The Coastal Corp. Terms of the transaction were not disclosed.

Following last week’s flurry of state initiatives and an energyroundtable among 10 western governors, California will be busysorting through the details full this week, including signinginitial long-term power contracts, which Gov. Gray Davis haspromised will begin to move the continuing “crisis” into thelonger-term “challenge” mode. In the interim retail direct-accesssales will be suspended among other provisions in the newlegislation.

El Paso declared an Unauthorized Overpull Penalty situationSunday. It is effective until further notice.

Petal Gas Storage L.L.C. ate a little crow at FERC last week. Itconceded that its original proposal for expanding thedeliverability capacity serving its storage facilities was a betterplan after all.

Power generators Duke Energy Corp. and Southern Co., which bothprovide electricity to some markets in California, reported highfourth quarter profits and continued growth through the year lastweek. And, despite concern that the generators won’t be paid forenergy they supplied to nearly bankrupt California utilities, bothsaid they would pursue payments from their customers if they haveto.

Power generators Duke Energy Corp. and Southern Co., which bothprovide electricity to some markets in California, reported highfourth quarter profits and continued growth through the year lastweek. And, despite concern that the generators won’t be paid forenergy they supplied to nearly bankrupt California utilities, bothsaid they would pursue payments from their customers if they haveto.