Meltdown

Not without challenges regarding increased inter-regional supply competition, price and peak demand capacity, natural gas in the Pacific Northwest faces the next five years in “good health,” with annual demand growth expected at 1.9%.

Six years after it was the center of an economic and energy meltdown, California’s latest public-sector energy financings are gaining improved reviews by Standard & Poor’s Ratings Services (S&P) and Moody’s Investors Service.

Making a small break with the energy crisis shackles resulting from the 2000-2001 wholesale energy market meltdown, California regulators last Thursday agreed to examine the feasibility of resuming direct-access retail deals in the electricity sector. The five-member California Public Utilities Commission (CPUC) granted a petition from pro-retail choice group Alliance for Retail Energy Markets (AREM).

In a move that essentially keeps all of the major energy suppliers in California during the wholesale market meltdown in 2000-2001 at risk in pending litigation, California Superior Court Judge Ronald Prager in San Diego County ruled Tuesday against Dallas-based TXU Corp.’s contention that it should not be included in a series of 27 civil cases that have been consolidated in the judge’s court. Prager oversaw the multi-billion-dollar class action lawsuit against Sempra Energy and its two California natural gas utilities that was settled earlier in the year in the midst of a jury trial.

While most have been disposed of or are lingering in court appeals, the blizzard of litigation after California’s wholesale energy market meltdown four years ago has spawned 236 separate lawsuits and a 42-page listing compiled by an attorney who has been involved in much of the litigation.

Reacting primarily to the previous day’s meltdown in energy futures, with a side nod to the general lack of substantive weather-related load outside the northern half of the West and to overflowing storage inventories, the cash market was in massive retreat Thursday. Losses exceeded a dollar across the board, with many points falling more than a dollar and a half.

Reacting primarily to the previous day’s meltdown in energy futures, with a side nod to the general lack of substantive weather-related load outside the northern half of the West and to overflowing storage inventories, the cash market was in massive retreat Thursday. Losses exceeded a dollar across the board, with many points falling more than a dollar and a half.

Indicative of how insulated it has remained from the energy industry’s financial meltdown, Sempra Energy’s Southern California Gas Co. utility unit based in Los Angeles was given an A+ rating by Standard & Poor’s Wednesday for a $250 million bond re-funding offering. SoCalGas’s bonds are rated the same as S&P’s rates Sempra’s corporate credit.

More fallout from the Enron meltdown surfaced last Wednesday as Democratic Reps. John Dingell (MI) and Ed Markey (MA) asked the Securities and Exchange Commission (SEC) to reconsider its support for the repeal of the Public Utility Holding Company Act of 1935 (PUHCA), “as well as its permissive administration of the act.” In addition, the two leading Democrats on the House Energy and Commerce Committee sought SEC support for the removal of a provision in pending electric restructuring legislation that would allow a PUHCA-registered holding company to use one of its subsidiaries to operate its own unregistered and unregulated investment company.