Hydroelectric

As state and federal officials last week were assessing the potential for the drought to impact hydroelectric power this summer, California Independent System Operator (CAISO) on Thursday issued a conservation alert because of a shortage of natural gas supplies that underpin much of the state’s power generation.

The power generation and transportation fuel sectors may see substantial gains in natural gas use, but California’s overall natural gas demand is expected to stay essentially flat in the next two decades, according to two recent companion gas reports released by the California Energy Commission (CEC).

Natural gas, bring it on! That captures the current outlook of California’s energy planners, who are counting on gas supplies to continue to be plentiful and low-priced in North America.

Continuing flat energy demand in a time of record hydroelectric supplies has natural gas stakeholders in the Pacific Northwest watching as the shale gas boom redefines energy delivery patterns and markets. As Ruby Pipeline on Thursday brought an added 1.5 Bcf/d of gas capacity into the West (see Daily GPI, July 29), these stakeholders told NGI that a national reordering of gas delivery systems needs to take place before gas’ future role in the region can be determined.

The excessively wet hydroelectric season in the West continues to hurt Calpine Corp.’s large fleet of natural gas-fired generation plants, Calpine senior executives told financial analysts Friday during a second quarter earnings conference call in which the large independent power company reported losses for the second quarter.

Continuing flat energy demand in a time of record hydroelectric supplies has natural gas stakeholders in the Pacific Northwest watching as the shale gas boom redefines energy delivery patterns and markets. As Ruby Pipeline on Thursday brought an added 1.5 Bcf/d of gas capacity into the West, these stakeholders told NGI’s Shale Daily that a national reordering of gas delivery systems needs to take place before gas’ future role in the region can be determined.

Spokane, WA-based Avista Corp. is sitting atop snowpack and water levels more than 150% of normal, setting up the prospect for abundant hydroelectric supplies and less-than-normal natural gas-fired electric generation for its combination utility Avista Utilities. As a result, revenues were up and fuel costs down for the first quarter, Avista reported in a quarterly earnings conference call last Friday.

Increased natural gas trading by primarily institutional investors and a rise in commodity prices globally — combined with modest tightening in gas supply-demand balance in the first half of 2008 — contributed to the sharp rise in both spot and futures gas prices last year, FERC said in its “State of the Markets Report” for 2008.

As the nation’s largest private-sector hydroelectric system operator and one of California’s major landholders, Pacific Gas and Electric Co. (PG&E) Thursday begins the federal government’s review process for a habitat conservation proposal. The U.S. Fish and Wildlife Service will hold a public meeting in Sacramento, starting the clock on a period for written comments that will run through Dec. 26.