Hikes

Amid the financial calamity facing California’sonce-invincible-looking two major utilities, California regulatorsThursday unanimously approved a temporary 1 cent/kwh rate hike, butthe growing challenge facing the state’s political leaders is thata grassroots push for government-run energy operations isdefinitely picking up steam.

Reluctantly and in the face of extraordinary pressure fromfinancial, utility and public officials, California regulators lastThursday took initial steps to unfreeze retail electricity ratesfor the state’s two largest investor owned utilities (IOUs) tobegin to cut into the $8 billion of debt dragging down the IOUssince mid-year. An unprecedented lobbying and public communicationseffort by the utilities preceded the action.

With electricity price shock still very much on their minds,California’s three major investor-owned gas utilities are alreadygearing up for potential similar shock surrounding natural gasbills this winter as gas futures prices are hovering twice as highas they were a year ago. Wednesday natural gas futures hit anotherall-time high, topping $5.

With electricity price shock still very much on their minds, California’s three major investor-owned gas utilities are already gearing up for potential similar shock surrounding natural gas bills this winter as gas futures prices are hovering twice as high as they were a year ago. Wednesday natural gas futures hit another all-time high, topping $5.

Bending another tool in its arsenal to shaping up the electricpower market, the Federal Energy Regulatory Commission (FERC) hasapproved an 11.6% rate of return for Southern California Edison,replacing the 9.68% rate set earlier by an administrative law judge(ER97-2335, et al).

“Storm hype” was billed as the overriding reason for Friday’scontinuation of this week’s price increases that accomplished whathardly anbody thought possible: bring some points back to eitherside of September indexes. The new gains defied the usual weekenddemand slump, growing complacency about finishing storage injectionseason comfortably, a mostly negative screen and cool, autumn-likeweather in many major market areas. In wide-ranging trading,influenced largely by a similarly volatile futures contract, mostcash points ranged from barely up to as much as 15 cents higher.The majority of the gains tended to be on either side of a dime.

As producers get organized for a forecast big push to acceleratedevelopment of Canadian natural-gas supplies, a hot market in fieldassets is emerging.

As producers get organized for a forecast big push to acceleratedevelopment of Canadian natural-gas supplies, a hot market in fieldassets is emerging.

The cash market resumed its climb Thursday, buoyed by a risingHenry Hub futures contract, a tightening supply situation,spreading cold weather and air conditioning load from Texas throughthe Southeast. A “lean” storage report Wednesday afternoon added tobullish sentiment, a marketer said.