Lines

Consumer input in decision making, mandatory power reliability standards, coordinated regional planning and clearly established jurisdictional bright lines between federal and state regulators are crucial elements in ensuring that the nation’s future electricity needs are met, a new report issued by a diverse group of power sector stakeholders brought together by the Consumer Energy Council of America (CECA) concludes.

LNG import terminal developer Cheniere Energy said an affiliate, J&S Cheniere S.A., has signed a 10-year time charter agreement for a third LNG cargo ship with a joint venture of Kawasaki Kisen Kaisha, Ltd. (K-Line), Shoei Kisen Kaisha and other companies. The new 154,200-cubic-meter LNG ship is being constructed by Imabari Shipbuilding Co., Ltd. and is expected to be delivered in the fourth quarter of 2007. K-Line will provide ship management services.

Old battle lines were being redrawn last week over natural gas research, development and demonstration (RD&D) funding. The Independent Petroleum Association of America (IPAA), which represents the nation’s independent gas producers, came out strongly against a proposal by the Gas Technology Institute (GTI) to reinstate interstate pipeline surcharges on transported gas for the purpose of funding RD&D. However, the American Gas Association, which represents gas utilities, told FERC it favors such an approach.

Drawing lots of lender interest, Bellevue, WA-based Puget Energy announced Wednesday that it obtained two new lines of credit totaling $500 million, involving 17 foreign and domestic banks and including a three-year $350 million unsecured credit line for its major utility subsidiary, Puget Sound Energy (PSE). Its nonutility construction arm, InfrastruX Group, will have a three-year, $150-million line for its operations nationally. Puget said the new credit facility will be used for general corporate purposes, and specifically for the utility, it will be used “primarily to back up the insurance of commercial paper, one of the company’s least expensive sources of borrowed funds.”

Nevada Power Co. last Wednesday filed a federal lawsuit against Southern Nevada Water Authority (SNWA), several officials with the Colorado River Commission (CRC) and a former Enron Corp. trader in which Nevada Power alleges that the defendants manipulated western power markets in 2000-2001 at the expense of the Nevada-based electric utility.

In the aftermath of the devastating August blackout that hit parts of Canada and the United States, top grid operator officials last week said that reliability coordinators must be able to order actions in real-time during emergency conditions and that this authority has to be clearly defined before problems crop up on the power grid.

Reading between the lines of the most recent long term (December through February) forecast by the National Weather Service (NWS), one meteorologist notes it “does not discourage a long term forecast of cold temperatures in the East.”

In a rare show of unanimity, the five members of the California Public Utility Commission (CPUC) agreed on two different natural gas requests from Sempra Energy’s two utilities — Southern California Gas Co. and San Diego Gas and Electric Co. (SDG&E). One action clarifies an inherited supply contract tied to a state bulk power contract, and the other item opens the utilities’ gas distribution pipes to cable/telecom operators.

In a mutual agreement, Williams has terminated the sale of some of its South Texas natural gas transmission lines to Enbridge Energy Partners LP, a deal originally set in October 2001. The South Texas system includes unregulated gathering systems and 492 miles of FERC-regulated pipelines. The two regulated pipelines extend from the Texas-Mexico border near Laredo and McAllen, TX, to Transco Station 30, where they connect with Williams’ Transco mainline. Enbridge Inc. subsidiaries agreed in October 2001 to purchase the Williams’ assets for $41 million (see NGI, Oct. 15, 2001). The transaction was conditioned upon approval by the Federal Energy Regulatory Commission that Williams could abandon the facilities to Enbridge and upon a finding that the assets would not be subject to FERC jurisdiction under the Natural Gas Act following the sale. In October 2002, Enbridge then assigned the purchase to Enbridge Energy Partners. In May, FERC issued an order denying abandonment of the South Texas system, which reversed a previous ruling granting the necessary approvals. The decision, said Williams, effectively prevents the sale from proceeding under the terms of the purchase and sale agreement. Williams plans to pursue an alternative transaction with Enbridge Partners or other buyers under a structure that is responsive to the May 2 FERC order, the company said in a statement.