Outages

Dynegy last Friday clarified its squabble with Sempra Energy’s San Diego utility unit, contending that it never asked for 18 smaller power plants to be shut down, regardless of orders from the California Independent System Operator (Cal-ISO) to produce electricity during peak demand hours.

While power outages were still viewed as an inevitability thissummer in California, a comprehensive legislative, regulatory andcommercial solution to mounting energy debts was less certain lastweek as reports surfaced that creditors might force bankruptcy onthe state’s two ailing utilities.

The cash market was doing a skyrocket imitation Monday amidsignificant fundamental influences, along with a large dose ofsupport from both natural gas and oil futures. Only a fewRockies/Pacific Northwest and Western Canada points failed to riseby about 20 cents or more (MRT and ANR ML-7 were among theexceptions elsewhere).

Responding to regulatory and industry warnings of potentialpower outages this summer, Pacific Gas and Electric Co., SanFrancisco, has begun offering its largest customers payments forvoluntarily curtailing at least 20% of their loads during peaksummer days. The large combination utility covering the northernhalf of California is targeting its 450 largest customers and arelatively few small businesses to obtain up to 500 MW of savingsin a given peak hour.

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.