Negative

Despite a negative ruling earlier in the month, small energy generators, so-called qualifying facilities (QFs), continue to pursue relief from regulated rates of Pacific Gas and Electric Co. through the federal bankruptcy court judge in San Francisco who is overseeing the utility’s Chapter 11 proceedings. Separately, the PG&E utility is meeting with individual QFs to try to negotiate deals that will allow them to cover their costs of generation at minimum.

If there was any question remaining that the California crisis would have a negative impact on the electric deregulation progress around the rest of the nation, it has been answered, and the response is ‘yes.’ Three quarters of the utility regulators across the nation polled said that the financial, reliability and political consequences of the California snafu will slow, or even halt, the spread of deregulation to their states, according to a recent national survey created by Standard & Poor’s and conducted by RKS Research & Consulting.

If there was any question remaining that the California crisis would have a negative impact on the electric deregulation progress around the rest of the nation, it has been answered, and the response is ‘yes.’ Three quarters of the utility regulators across the nation polled said that the financial, reliability and political consequences of the California snafu will slow, or even halt, the spread of deregulation to their states, according to a recent national survey created by Standard & Poor’s and conducted by RKS Research & Consulting.

Spurred by a negative short-term technical outlook and coming onthe heels of bearish storage data, natural gas futures retracedlower Wednesday as traders took back gains notched during Tuesday’sprice rally. At the closing bell, April was off 24.6 cents tofinish at $5.041, 2.2 cents below Monday’s close.

Pacific Gas & Electric issued a systemwide Stage 3low-inventory OFO for today with penalties of $5/dth for negativeimbalances exceeding a 2% tolerance. It was projecting below-targetlinepack levels through Saturday.

As blackouts finally swept through California yesterday afterweeks of warnings, the initial reaction was negative to theCalifornia legislature’s proposals to cure the state’s powerproblems. Most observers concluded there was little indication thatthe proposals would either provide the power needed to keep thelights on in the state or solve the utilities’ financial woes.

In an American Public Gas Association (APGA) report releasedlast week, a majority of Georgia residential customers gave gasderegulation in the state a failing mark, with many reporting thattheir bills actually increased or that there was no noticeableeffect. Half of the Georgia commercial customers polled also saidthey were paying higher bills, and gave deregulation a thumbs-downfor that reason.

Florida Gas Transmission extended an Overage Alert Day notice (seeDaily GPI, Aug. 25) until furthernotice, but tightened the original 8% tolerance for negative dailyimbalances to a more stringent 2% Friday.

At the end of a mostly negative price week, traders decided togo quietly into the weekend Friday. Nearly all points were flat toless than 4 cents up or down.