Face

California energy officials declared another power alert Mondayas statewide electricity reserves threatened to dip below 7% in theface of near-record cold weather power demand and more than 11,000MW out of service, about 4,000 MW of which were on an unplannedbasis. Part of the unplanned loss of generation capacity wasattributed to a transmission breakdown in the San Joaquin Valley onpart of Pacific Gas and Electric Co.’s system.

California seemed as unprepared as ever last week to meet itsenergy needs in the face of a blast of cold weather. The power gridwent through an intense struggle to meet heavy winter demandbecause a huge amount of generation was off-line due to eitherdesperately needed maintenance or low water levels behindhydroelectric dams. But the big surprise was record gas demand forSan Diego Gas & Electric (SDG&E), which was forced tocurtail some interruptible customers.

California seems as unprepared as ever this week to meet itsenergy needs in the face of a blast of cold weather. The pricestell much of the story. While power prices continued to make gainsyesterday, reaching near $240/MWh during peak hours according tothe California Power Exchange, spot gas prices held ground atrecord levels above $8/MMBtu. Meanwhile, gas and electric utilitiesthroughout the state and the state’s electric grid operator issueda variety of emergency alerts.

A target of May 1 has been set to complete a review, and a pollsuggests the majority is receptive to change, but gas hunters stillface an uphill effort to remove a moratorium from a highly-ratedexploration target offshore of Canada’s West Coast.

A target of May 1 has been set to complete a review, and a pollsuggests the majority is receptive to change, but gas hunters stillface an uphill effort to remove a moratorium from a highly-ratedexploration target offshore of Canada’s West Coast.

Once again several western points defied the overall downwardtrend of the cash market Tuesday. Most eastern quotes ranged 2-3cents to either side of down a nickel, but Rockies/San Juan andNorthern California increases went as high as a dime-plus.

Market access issues are becoming a major challenge fortransmission and distribution markets, which face unprecedentedgrowth and increased deliveries, and while it’s still unclear as towho will be willing to finance and construct the required newfacilities, a huge capital investment has to be made just to meetdemand, an industry analyst said last week.

Market access issues are becoming a major challenge fortransmission and distribution markets, which face unprecedentedgrowth and increased deliveries, and while it’s still unclear as towho will be willing to finance and construct the required newfacilities, a huge capital investment has to be made just to meetdemand, an industry analyst said yesterday.

The natural gas industry should be prepared to face customerrevolts and attempts at price caps, similar to those witnessed thissummer in San Diego if it’s a cold winter and prices continue tohit new highs. That was the warning from government and industryrepresentatives at the crisis conference held by the Interstate Oil& Gas Compact Commission (IOGCC) yesterday.