Markets

The implementation of price-cap proposals intended to aid California’s beleaguered wholesale electricity markets could lead to a significant rise in the number of power outages in the state this summer by reducing available generating supplies, according to a new report issued by the Department of Energy’s (DOE) Office of Policy. It warned that a $150/MWh “hard cap,” which some Capitol Hill lawmakers had endorsed, could idle as much as 3,600 MW of natural gas-fired capacity in California, depending on the price of natural gas this summer.

The implementation of price-cap proposals intended to aid California’s beleaguered wholesale electricity markets could lead to a significant rise in the number of power outages in the state this summer by reducing available generating supplies, according to a new report issued by the Department of Energy’s (DOE) Office of Policy. It warned that a $150/MWh “hard cap,” which some Capitol Hill lawmakers had endorsed, could idle as much as 3,600 MW of natural gas-fired capacity in California, depending on the price of natural gas this summer.

Despite exorbitant price spikes in natural gas and deregulation setbacks in various markets around the country, a new study released by the American Gas Association (AGA) revealed that an increasing number of small businesses and other commercial customers are purchasing their natural gas supplies from someone other than the local utility, continuing the evolution of competition in the natural gas industry.

California regulators this week could start to lessen some of the uncertainty surrounding the in-state markets in the first of a series of natural gas infrastructure expansion decisions that ultimately could greatly expand the two major utility intra-state transmission/storage systems and make it easier for new interstate expansion projects into the state to get completed.

After a re-examination of its prior forecasts in light of the upheaval in the energy markets last year, the American Gas Association has concluded that its prior gas demand projection may have been a little on the high side and its price forecast quite a bit too low. In an update of its February 2000 report “Fueling the Futures: Natural Gas and New Technologies for a Cleaner 21st Century,” AGA said demand now is projected to grow 53% (up 33.6 quadrillion Btus) by 2020 rather than the 60% (35 quads) it projected earlier and prices should reach $5.60 in 2020.

A study of North American natural gas markets topped the wish list of 11 potential study projects proposed by the Energy Department (DOE) for the National Petroleum Council (NPC) at the council’s annual meeting last Wednesday in Washington.

A study of North American natural gas markets topped the wish list of 11 potential study projects proposed by the Energy Department (DOE) for the National Petroleum Council (NPC) at the council’s annual meeting Wednesday in Washington.

Global Marine Inc.’s worldwide Summary of Current Offshore Rig Economics (SCORE) was up 7.2% in April, the 20th consecutive month-to-month increase — an indication that dayrates will go up as international drilling attempts to move equipment out of the Gulf of Mexico. SCORE compares the profits of current mobile offshore drilling rig rates with those of the 1980-81 peak, a time of speculative rig construction.

The Rockies and California border-SoCalGas were the odd markets out Tuesday as the budding rejuvenation of prices in general picked up steam. Most points registered gains between 15 cents and a quarter, with larger advances posted at Pacific Northwest and PG&E-related points.