Demonstrated

Arizona Public Service (APS) will file a motion to reconsider a move to slow down deregulation, after the three-member Arizona Corporation Commission (ACC) on Tuesday voted unanimously to reverse a 1999 requirement that the state’s utilities divest their generating assets. The vote followed a ruling by the commission’s administrative law judge in July, who recommended that Arizona delay competition past July 2004 because the wholesale market was not ready (see Power Market Today, Aug. 28).

Natural gas futures traders have, over the course of the last decade, demonstrated the uncanny ability to look past an in-your-face fundamental indicator and focus instead on an obscure technical benchmark or their perception of data yet-to-be-released. Yesterday was a textbook example of the latter being played out as traders ignored another hefty storage injection to focus instead on their expectations of next week’s release. This was evident in the market’s price action late yesterday afternoon as the August contract rebounded from its pre-AGA lows to finish with a 6-cent gain at $3.342.

El Paso Natural Gas “is willing to expand its system” to theCalifornia border if “sufficient support” for such a project can bedemonstrated through long-term capacity contracts, the pipelinetold FERC.

For a change the cash market demonstrated some independence fromthe futures screen influence Wednesday. Even as futures followedTuesday’s downtick of nearly 6 cents with an even bigger diveyesterday, quotes at nearly all non-Western points either held flator managed to tack on up to 3-4 cents. This ran contrary to what anumber of traders had expected.

In a dramatic step toward the development of a whole new way ofgenerating electricity, Plug Power demonstrated last week the firstresidential fuel cell to successfully power a home.