Milder

“Due to anticipated milder temperatures and reduced operational flexibility resulting from the Bear Creek storage field test,” Tennessee said an OFO Action Alert will take effect Friday until further notice for all LMS-MA, LMS-PA and LMS-SA balancing parties and delivery (from Tennessee) for LMS-PL shippers with meters located in Zones 0, L and 1. If the Action Alert proves insufficient to maintain system integrity, the pipeline said, an OFO Balancing Alert may become necessary.

Cash prices fell sharply across the board on Thursday in response to a smaller than expected storage withdrawal of 150 Bcf, expectations of lower demand Friday and over the long holiday weekend, and forecasts for warmer weather next week. Many points in Texas, the Midcontinent, the Midwest and the Gulf Coast region plummeted 30-50 cents, while the New York Citygate gave back about $1.60 in Transco Zone 6.

After weathering the extended cold chill over the second half of January, it appears that at least part of the country is not out of the woods yet as another cold front is bearing down in some areas of the East. The National Weather Service’s 8-14 day outlook as of Feb. 7 called for normal to below normal temperatures across the East and Midwest, while the Southwest is expected to register above normal temps.

After weathering the extended cold chill over the second half of January, it appears that at least part of the country is not out of the woods yet as another cold front is bearing down in some areas of the East. The National Weather Service’s 8-14 day outlook called for normal to below normal temperatures across the entire country, except for Florida, which is expected to enjoy above normal readings.

If prices hadn’t been so abnormally high to begin with, it might have been considered a market meltdown. As it was, prices registered steep declines Friday that reached triple digits in the Northeast and at several other points. Rockies, Pacific Northwest and California quotes tended to see the smallest losses of 30-50 cents; otherwise it was rare for any point to fall by less than 60 cents.

With many areas turning quite mild for early January and some doubt surfacing about the severity of a predicted return of winter storms later this week, cash prices were flat to down about 35 cents Monday. The common range for most declines was between about a dime and a quarter.

With milder weather reaching as far as the Southeast and energy futures back on a downward slope, it was virtually inevitable that cash prices continued to slide Wednesday at nearly all points. Besides the above factors, sources said the soft market also was reflecting what some believe will be a relatively big storage injection report Thursday morning for a period covering record-setting heat and electricity demand.

Coming off of a year highlighted by milder than normal weather, El Paso Energy Partners LP. reported a 51% increase in 2001 pro forma cash flow, as measured by adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), of $161.4 million compared with $107.0 million in 2000. Pro forma net income, which also excludes non-recurring items, was $61.8 million ($0.58 per unit) for 2001 — more than triple the $20.5 million (loss of $0.03 per unit) in 2000. The company’s net income was $55.1 million ($0.38 per unit) for 2001 and includes non-recurring charges of $6.7 million ($0.19 per unit) primarily related to asset sales in 2001.

Despite the economic downturn and considerably milder weather, NiSource Inc. posted net income of $66.9 million ($0.32 per diluted share) for the fourth quarter of 2001, compared to a net income loss of $4.2 million ($0.02 loss per diluted share) for the equivalent quarter in 2000. The company also had a strong full year, turning a loss in 2000 into a sizeable gain in 2001. The company reported $216.2 million ($1.03 per diluted share) in 2001 net income, compared to $150.9 million ($1.12 per diluted share) in 2000.