Gift

FERC’s “Christmas gift to the nation,” according to Chairman Pat Wood, was its approval of the first regional power transmission organization (RTO), covering basically half of the nation from North Carolina to North Dakota and as far south as Texas and Arkansas. The decision was lauded by consumer advocates and business organizations in the Midwest as a “positive first step to ensuring that the Midwest serves as an efficient and effective gateway for suppliers’ energy.”

Tampa-based Peoples Gas is sending a gift of sorts to its customers beginning today by reducing natural gas prices for the second time this year. The Purchased Gas Adjustment (PGA) factor on residential bills will drop about 32% to $0.66749/therm, following a 15% decrease in March. The two reductions lowered the PGA factor to September 2000 levels, said the company.

Traders hoping for unsubscribed El Paso capacity to reduceprices at the Southern California Border will be sorelydisappointed because of last week’s announcement that an unnamedshipper signed for 1.2 Bcf/d. The southwestern pipeline said itrecontracted all of its available firm capacity for a minimum of$37.5 million in revenues for 2000. The amount reflects an increaseof 7% over the annual average revenues generated from the Dynegydeal over the past two years. Dynegy paid $70 million for 1.3Bcf/d.

The controversial two-year period in which Dynegy Marketing andTrade held a huge chunk of El Paso’s firm capacity to the SouthernCalifornia border is coming to an end, but if western gas tradersare looking for a new market regime in the new millennium they maybe sorely disappointed. El Paso announced Friday that it has foundanother buyer willing to hold on to 1.2 Bcf/d of firm space to theCalifornia border.