Rebounds

When industrial electricity demand rebounds, along with continued growth in residential and commercial sectors, a looming imbalance between growing demand and depressed development of new generating plants could further stimulate the wholesale power market later this year or next, according to San Jose, CA-based Calpine Corp.’s CEO Peter Cartwright, speaking to financial analysts Thursday on an earnings announcement conference call.

Cash prices emerged from the weekend in a general softening trend Monday, but with some flat to higher numbers in the West mixed in and a sense among a couple of sources that the market is still relatively strong. Northeast citygates plunged while the rest of the East mostly fell between a couple of cents and about 15 cents.

Wednesday’s general market softness was merely a lull in this week’s upward march of prices. Nearly all points were back on the rise Thursday, with the exception of a few small downturns in the Rockies and at scattered other points. Most gains were in the teens, bracketed by some in single digits and others of 20 cents or more in the Northeast, led by Algonquin citygate spikes of about 60 cents that included a peak quote of $9.25.

After suffering through the World Trade Center tragedy, electronic energy marketplace TradeSpark LP managed a significant rebound, producing transaction, volume and revenue growth. The trading system, which was formed by eSpeed, Inc., Cantor Fitzgerald and five of the largest U.S. energy producers/distributors, traded more than $40.2 billion (notional value) in energy products in the fourth quarter and more than $150 billion since its inception in October 2000, the company said on Tuesday.

In a story that ran in Daily GPI on Wednesday, titled “TradeSpark Rebounds, Eyes Potential Clearing Services,” Cantor Fitzgerald was mentioned as the most likely entity to perform clearing services for the TradeSpark electronic energy exchange (see Daily GPI, Feb. 13). However, TradeSpark representatives said it is too early to be absolutely certain that Cantor Fitzgerald will perform those services. Market participants and TradeSpark officials still have significant work to do before clearing services can be put in place.

After suffering through the World Trade Center tragedy, electronic energy marketplace TradeSpark LP managed a significant rebound, producing transaction, volume and revenue growth. The trading system, which was formed by eSpeed, Inc., Cantor Fitzgerald and five of the largest U.S. energy producers/distributors, traded more than $40.2 billion (notional value) in energy products in the fourth quarter and more than $150 billion since its inception in October 2000, the company said on Tuesday.

Non-performance of Enron-related gas did not appear to be a major factor in Monday’s price rebounds that were especially strong in the West. Replacement of purchases from Enron did play a part, sources said, but it was more a big Tuesday-only production outage in the Rockies and covering of short positions that sent post-weekend prices soaring by about 20 cents or more across the board. Opal quotes saw the biggest gain by far of more than 80 cents, according to one source.

The downtrend continued Monday morning at the majority of points, with many places down a more than a dime from Friday averages. However, there was a late turnaround in some regions, including West Texas, the Midcontinent, Gulf Coast and Northeast markets, which may set the tone for trading Tuesday and Wednesday until the AGA storage report is released. Despite plenty of time to prepare last week, the colder weather appears to have caught some players off guard.

Substantial rebounds in cash prices Tuesday surprised many traders, especially because there were no significant changes in overall market fundamentals, and screen support remained minuscule. Triple-digit California gains led a cash market advance that saw most points gaining at least a dime or more, with “or more” being the key operative words. Increases tended to be smallest in the Northeast (Algonquin citygates were flat) and largest in the Rockies/San Juan market.