Extreme

A continuation of extreme heat in much of the West provided some rationale for Tuesday’s small upticks in that market area, but sources were generally at a loss to explain similar moderate firmness in the East. Actually the eastern gains tended to be slightly larger, although nearly all points were limited to single-digit increases and a few were flat to barely lower.

Gas and winter power demand records fell throughout the eastern United States during the week ending Jan. 24, according to multiple local gas distribution companies, power utilities, electric grid operators and pipeline companies. Williams subsidiary Transcontinental Gas Pipe Line (Transco), which serves the entire East Coast region, said last week that it set a new peak gas transportation record on seven out of 10 days from Jan. 15-24.

Barely visible in this time of extreme budget constraints, the California Consumer Power and Conservation Financing Authority (power authority), will reemerge in Sacramento later this month to set the stage for establishing a 22% electricity reserve target for the state next month in one of its first rulemakings as an neophyte state agency spawned by the now long-gone electricity crisis of 2000-2001. One quarter to one half of the new target would come from demand-side management, according to a draft proposal.

In an effort to grease the gears of energy trading and sharply lower collateral requirements in this time of extreme credit scrutiny, the Committee of Chief Risk Officers (CCRO), which represents 32 major energy companies, has recommended a standardized agreement that will facilitate trading of energy contracts through clearinghouses and other multilateral trading platforms.

Despite current moderate to extreme drought conditions in the Pacific Northwest region, the Northwest Power Planning Council (NPPC) reiterated in a report last week that it does not expect any power supply problems this winter or next year because of about 3,000 MW of new non-hydro generation that has been built.

Despite current moderate to extreme drought conditions in the Pacific Northwest region, the Northwest Power Planning Council (NPPC) reiterated in a report this week that it does not expect any power supply problems this winter or next year because of about 3,000 MW of new non-hydro generation that has been built.

Florida Gas Transmission said it was having operational problems with pipe maintenance “due to extreme weather conditions,” and no receipts would be scheduled Wednesday at its Refugio, TX interconnect with the Matagorda Offshore Pipeline System, affecting about 102,000 MMBtu/d. MOPS operator Northern Natural Gas said its “current information is that it [Refugio flow] may not be back available” until Thursday.

Futures market observers and participants braced for extreme price volatility last week in preparation for the new weekly storage survey by the Energy Information Administration (EIA), but what they got was an uncharacteristically quiet reaction from the futures market on Thursday when EIA reported a 39 Bcf weekly injection and 1,594 Bcf of working gas in storage. Prices chopped sideways amid equal parts local trader selling and commercial buying before June finished the day at $3.719, down 2.7 cents.

Although its agenda has had few major energy items, the extreme delays that seem to surround many issues before the California Public Utility Commission (CPUC) in recent months have caused a new informal alliance of old and new members from different political parties. The newest and most controversial CPUC member, Michael Peevey, an economist, former utility senior executive and energy services multi-millionaire entrepreneur, has been unequivocal in chiding CPUC President Loretta Lynch for holding items too long for ostensible legal reasons or incomplete facts.