Note

UBS Warburg analyst Ronald J. Barone said in a research note on Friday that he was once again “compelled” to lower his natural gas spot price forecast because of the continuing decline in gas prices and the rapid rise in gas storage levels.

To facilitate the transition of El Paso Natural Gas operational headquarters from El Paso, TX to Colorado Springs, CO, the pipeline is suspending the cash-out tariff for the current production month. No automatic triggering of cash-out will occur, El Paso said. Cash-out notification requirements will resume in August with the processing of July results. Imbalance paybacks and makeups will continue to be accommodated using existing procedures for resolving physical imbalances.

For the seventh Monday in a row, natural gas futures started the week on a strong note yesterday as traders were greeted back from the holiday weekend to inhospitable weather across the nation. Snow showers in the upper Midwest were giving traders one last taste of winter weather while a cold rain was falling across the Northeast. Meanwhile, rain, hail and strong thunderstorms were battering Houston Monday afternoon. Needless to say, it was not a good time to be a seller.

Even with the ink still not dry and final allocation stillundetermined on California’s record $5 billion electricity rateincrease approved Tuesday, state officials are already worried thatthe added revenues and state-backed bonds that will follow will notbe enough to pay the state’s wholesale power bill over the next 12to 18 months. However, those dire forecasts assume little or norelief from relentlessly high wholesale prices.

Pacific Gas & Electric extended a systemwide Stage 3high-inventory OFO through at least today, but loosened thetolerance for positive daily imbalances from 1% to 3%. The utilitycontinued to project linepack rising well above its maximum targetlevels through Saturday.

Months after an arbitrator awarded American Central GasTechnologies Co. $8.3 million in a ruling that Union PacificResources (UPR) and Duke Energy Field Services (DEFS) hadmonopolized natural gas processing in Panola County, TX, thecompanies are at it again, this time in an East Texas districtcourtroom (see NGI, Aug. 14, 2000).

Northern Natural reported a critical system overrun limitationfor all of its market area zones for today’s flow. DDVC penaltiesare applicable to the bumped shipper’s quantity.

El Paso declared an Unauthorized Overpull Penalty situationSunday. It is effective until further notice.

El Paso declared an Unauthorized Overpull Penalty situationTuesday and said it will limit scheduled volumes at underperforminginterconnects to preserve system integrity. The pipeline alsopostponed pigging of Line 3201 in San Juan Basin (see Daily GPI,Dec. 19) by one more day to Dec. 28.