Heat

The western heat and Midwest/Northwest cold that had combined with energy futures strength to push prices higher earlier in the week were unable to sustain further increases Wednesday. Moderating weather trends and an initially softer screen caused swing quotes to range from flat to a little more than 15 cents lower; most dips were mild at less than a dime.

FERC turned up the heat last week on the whole subject of price reporting as Chairman Pat Wood urged companies to get on the bandwagon before it’s too late and staff issued another request for comments to see if people believe the price surveys are improving.

Feeling the heat over the budget deficit in Washington, Senate Republicans have used razor-sharp knives to cut the cost of the one-time $31 billion omnibus energy bill by more than half.

“We’re tough up this way; we don’t need heat,” a Midwest source jested as a way of trying to explain Thursday’s falling prices despite subfreezing temperatures across most of the region that would extend into the weekend. Quotes fell across the board, with losses ranging from a little more than a dime at some western points to about a half a dollar for New York City deliveries.

While consumer issues have already turned up the regulatory heat, proposed legislation promises to light a fire under Colorado’s major utilities, requiring them to step up energy savings and conservation programs. Included in early versions of a bill backed by a mixture of environmental and energy efficiency groups is a requirement to reduce the average retail utility customer’s energy use by 0.5% annually for the next 15 years.

The Department of Transportation’s Office of Pipeline Safety (OPS), which has come under attack for failing to collect penalties for major pipeline safety violations, reported Tuesday it settled with Shell Pipeline Co. LP this month for $250,000 in connection with the 1999 blast on Olympic Pipe Line Co. that killed three persons.

With natural gas prices remaining higher than normal, Progress Energy Florida has asked the Florida Public Service Commission to approve a cost adjustment — primarily related to rising costs of fuel — that will increase residential bills 6.5% beginning Jan. 1, 2004.

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.

Eastern markets proved unable to sustain the bullishness of the day before and registered drops ranging from a nickel to 20 cents or so Wednesday. Thanks to heavy air conditioning load in some sections and supply issues, however, the West was able to keep its numbers flat to up more than 20 cents in the Rockies.