Force

On a strictly partisan 3-2 vote, California regulators Thursdayblocked attempts by the state’s two near-bankrupt investor-ownedutilities to cut their work forces and services in order toconserve cash while awaiting a settlement with the state on theirfuture financial viability. Responding to an emergency request froma coalition of utility workers’ unions, the California PublicUtilities Commission’s (CPUC) action means proposed staffinglayoffs of several thousand regular and contract workers, totalinghundreds of millions of dollars in operating costs, will nothappen.

Still holding on to the collateral of its 70-odd participants inthe form of letters of credit and bonds worth hundreds of millionsof dollars, California’s state-chartered nonprofit wholesale spotmarket for electricity, Cal-PX, chose a Chapter 11 bankruptcyfiling last week because of the preponderance of litigation andfederal regulatory actions pending, its CEO George Sladoje saidMonday.

On the heels of a federal judge refusing to force stateregulators to grant immediate rate relief, Southern CaliforniaEdison Tuesday faced some of its major creditors in a conferencecall, looking for more of the same forbearance that generators sofar have extended the cash-starved utility and thesimilarly-situated Pacific Gas and Electric Co.

Smaller producers were the driving force behind a 1 Bcf/d increase in production during the fourth quarter of 2000 over the same period in 1999 according to Arlington, VA-based Energy and Environmental Analysis, Inc. (EEA). While many large producers reported smaller production results for the fourth quarter 2000 when compared to 1999, smaller companies were actually reporting increases.

Smaller producers were the driving force behind a 1 Bcf/dincrease in production during the fourth quarter of 2000 over thesame period in 1999 according to Arlington, VA-based Energy andEnvironmental Analysis, Inc. (EEA). While many large producersreported smaller production results for the fourth quarter 2000when compared to 1999, smaller companies were actually reportingincreases.

Southern California Edison’s petition asking a federal appealscourt in Washington, D.C. to force FERC to reinstitutecost-of-service rates for electricity sales in the Californiamarket is impracticable, legally indefensible and not in thepublic’s best interest, the Commission said.

Chemical companies, forced to shut in operations because of highnatural gas prices, are nevertheless making money — by sellinggas futures contracts.

Transwestern declared force majeure at its Gallup (NM)Compressor Station Tuesday after a unit went down during the nightdue to an electrical problem. San Juan Lateral capacity was reducedto 760,000 MMBtu/d. The pipeline replaced the electrical part andwill have the unit back in service for today’s gas day.

Transwestern extended through at least Saturday the force majeureassociated with a freight train derailment near its mainline innorthwest new Mexico (see Daily GPI, Nov. 2). The derailed cars have beenremoved but harsh weather delayed the start of pipe inspection untilFriday, a spokeswoman said. Crews were hoping to restore servicebetween Stations 5 and 6 Sunday, she said. A capacity constraintremained in effect going into the weekend, but it had been reducedfrom 400,000 MMBtu/d to 300,000 MMBtu/d.