Hits

California Gov. Gray Davis late last week had the state add yet another series of formal appeals to an already long list of federal filings seeking wholesale power price relief, along with focusing his latest ire and jawboning on the state’s 30 municipal utilities. The Federal Energy Regulatory Commission filings keep the heat on prior to the governor’s anticipated meeting with President Bush Tuesday.

What has been bizarre behavior for more than a month turned intooutright insanity Thursday as California’s electricity gridoperator declared a Stage Three power alert and narrowly avertedrolling blackouts for firm customers. State officials had expectedto have to curtail up to 2,000 MW between 5-8 p.m., centered mostlyin northern California. An unprecedented one-third (15,000 MW) ofthe capacity usually available was out of service.

It could be quite some time before FERC responds to San DiegoGas and Electric’s (SDG&E) emergency request seekingreinstatement of price caps on short-term capacity releases for gastransportation service to the California market.

Spot gas prices into California broke Daily GPI’s nationwideall-time record high of $39 at the Chicago citygate, set in Feb.2, 1996 trading. A western trader for one marketing firm reported adeal for $41 at the Southern California border Wednesday, saying,”And I’ve got my confirmation from EOL [EnronOnline] to prove it.”California was just part of a hyperpowerful cash market that hadmost points exploring price territory they had never seen before.

Deep drilling in the southwest end of California’s central SanJoaquin Valley is awaiting more testing work to prove that backers’claims of substantial new oil and gas supplies below 15,000-footdepths are, in fact, commercially available.

By today, a “cool” spell was expected to grip Texas, plungingtemperatures down to around 100. A nice respite from the 105-plustemperatures that stilled the state and sent electricity peak loadsto new records last week for the third time this year.

The other shoe – five times larger than the first – dropped on Reliant Energy’s Houston Lighting & Power Co. (HL&P) Tuesday in a case that found the utility defrauded three Texas cities of fees owed for its exclusive right to sell electricity. Yesterday, a district court jury in Houston awarded the three cities $10 million each in punitive damages. That’s on top of $4.2 million in actual damages (about $6 million including interest and attorneys’ fees) awarded last week (see Daily GPI April 3).

Despite the arrival of another severe winter storm — this onein the Midcontinent — the majority of spot points leaned to thedownside Thursday.

Avista Corp., based in Spokane, WA, got on board the technologystock express last week as Washington state neighbor Bill Gatestook a 5% stake in the company and Avista’s stock price just aboutdoubled.