Midwest

The question of who – federal or state regulators, or both – hasjurisidiction over small interstate pipeline laterals that directlyserve end-use customers has been left unresolved at the regulatorylevel, and now is poised to be sent to state and federal appellatecourts.

Citing the need to accommodate increased Canadian gas suppliesflowing into the Midwest, the sponsors of Independence Pipeline andSupplyLink have urged FERC to promptly issue preliminarydeterminations (PDs) on the non-environmental aspects of theirpipeline projects.

It was still freezing and snowy in much of the Midwest andNortheast Thursday, but cash traders continued to bank on anapproaching warming trend that has been ballyhooed since thebeginning of the week. Prices fell by about a nickel to a littleover a dime in across-the-board softness. The Martin Luther KingDay weekend (in which some apparently are getting a half-day offthis afternoon in addition to the actual holiday Monday) added tothe general bearish mood.

The Midwest snowstorm that gave such a lift to the first dailyprices of 1999 was being repeated to a lesser degree over theweekend and Monday, but this time there were no gains of 20 centsor more as a result. Instead, most of the cash market was flat todown as much as a dime Monday. Still-massive storage inventories,along with forecasts of warming weather in the North and a fallingscreen, were cited as reasons for the softness. Several sources described trading action as subdued.

The Senate Energy and Natural Resources Committee is scheduledto hold an oversight hearing Thursday into the price spikes in theMidwest electricity market last June. A key witness will be FERCChairman James Hoecker, who is expected to disclose “some, if notall, of [FERC staff’s] analysis” of the events that lead up tounprecedented power prices.

Peoples Energy Services has purchased the Midwest portfolio ofKN Energy subsidiary mc2 for an undisclosed sum. The transactionincludes 8,000 gas contracts, inventories and related receivables,increasing PE Services’ customer base to more than 20,000 Chicagoarea businesses, the largest of any supplier in the Chicago market,the company said.

The recent price spikes and generation outages in the Midwestpower market have opened the door wide for the natural gas industryto capture a greater share of the industrial energy market, says asenior economist.

Given the recent price spikes in the Midwest and Californiaelectricity markets, a California power agency has called onCongress to take the necessary steps to rein in unleashed marketpower when it takes up restructuring legislation next year.

Cash prices softened a bit Tuesday in mostly featureless tradingas major markets in the Midwest and Northeast cooled off. Themajority of points saw prices ranging from flat to down about anickel with no single region standing out as especially strong orweak. About the only exception to that general rule wasintra-Alberta, which started off around Monday’s C$2.04-05 averagebut quickly ramped up to near the top end of Monday’s range andwound up gaining about a nickel overall, a marketer reported. Forwhatever reason provincial field receipts have been lower thanexpected this week, she said, although only a few plants are stillundergoing annual turnaround maintenance.