Government

Federal government prognosticators this week reported thatdemand for natural gas will slow considerably during 2001, but spotgas prices nevertheless are expected to remain lofty throughoutmuch of the year in the face of tight gas inventories.

Indiana consumers and government officials would gain more localcontrol over merchant power plant sitings under legislation nowmaking its way through the Indiana House. HB 1979, sponsored byRep. Tiny Adams (D-Muncie), would give local municipalities andzoning boards more veto power over the siting process.

A cross-section of U.S. energy representatives last weekpresented a laundry list of initiatives that they believe the WhiteHouse, Congress and regulators must actively pursue to build up thenation’s energy inventories, which they warn are at dangerously lowlevels.

Even though “bailout” has become a dirty word as Californiagovernment leaders in Sacramento hammer out more comprehensiveresponses to the state’s electricity woes, San Diego-based SempraEnergy’s CEO Stephen Baum says there is a light at the end of thetunnel.

In a move that appeared to appease the country’s ailingindustrial sector, the Mexican government agreed last week to sellnatural gas to domestic industry at a fixed price of $4/MMBtu forthe next three years. Steelmaker Hylsamex, among others, which hadtemporarily shut down facilities and laid off workers because ofhigh natural gas prices, said it would soon restart one of fouriron plants.

As the state faced the threat of a third day of rollingblack-outs Friday, the California government enacted legislationproviding $400 million to the state water resources agency so itcan substitute for the two failing utilities, Pacific Gas &Electric and Southern California Edison, in buying bulk power forconsumers in northern California.

In a move expected to appease the country’s ailing industrialsector, the Mexican government has agreed to sell natural gas todomestic industry at a fixed price of $4/MMBtu for the next threeyears. Some of the largest companies in Mexico, includingsteelmaker Hylsamex, have been forced to temporarily shut downfacilities and lay off workers because of natural gas prices.

California power watchers were hoping for results early thisweek from the marathon government-industry negotiations. Theprincipals of last Tuesday night’s marathon session were expectedto meet by video-conference over the weekend to review solutionsdeveloped by staff working groups, which met through the end of theweek. (see Daily GPI, Jan. 11)

The Kansas City, MO, city government has voted to give naturalgas consumers some relief from high natural gas prices. The citycouncil in a special meeting voted to immediately repeal theresidential natural gas section of an emergency utility tax thathas been imposed on consumers since 1952. The tax, which wasenacted due to reasons that no one in the city council cancurrently recall, varied from 0.5%, up to 4% over the last 46years.