“Owners of small businesses, intent on reducing their operatingcosts, are receptive to the idea of buying their energy supplies atreduced group rates through local or regional businessassociations,” according to a new study by RKS Research andConsulting. The North Salem, NY firm said a small businesssub-group, home-based businesses, would consider discountwarehouses and membership clubs for low-priced electricity offers.RKS also found a market emerging around the idea of bundledservices, including energy, local and long distance telephoneservice and Internet access all on one bill. While the small usersare interested in cutting costs, they can’t do without service.”Across the board, business owners say they seek long-termrelationships with suppliers who stress simplicity and ease ofuse…..They are willing to trade off price for service, qualitybrand name and convenience.”
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Transportation Notes
Saying it expects high system linepack due to reduced demand andlimited storage injection capability to continue through theweekend, Tennessee is issuing an OFO Action Alert effective withSaturday’s gas day for its entire system. Under the alert, shipperswill be penalized for daily positive imbalances that exceed a 2%tolerance range (or 500 Dth, whichever is greater) from scheduledquantities. Penalties will not apply to customers who underdeliverinto the system or overtake from it, or to customers under RateSchedule LMS-MA who have elected the Storage Swing Option or Swingon Storage. Tennessee expects the alert to remain in effect intonext week.
Transportation Notes
A high-inventory Stage 1 OFO implemented Sunday by Pacific Gas& Electric was continued through Monday and today. Sunday’s 15%imbalance tolerance was reduced to 6% Monday, but the noncompliancepenalty remains at $1/dth. PG&E projected that its linepackinventory would continue to be 200 MMcf or more above the utility’starget through Thursday.
KN Warns Investors of Lower Earnings
KN Energy warned investors yesterday warm temperatures, highstorage levels, poor processing margins and reduced gastransportation throughput during the first quarter took a bite outof earnings and could continue to plague the company for the restof the year.
ProvGas Granted Rehearing, Gets Fine Reduced
Providence Gas Co. (ProvGas) was granted a rematch with state regulators and Aurora Natural Gas of Dallas last week but got only a token $5,000 knocked off of a $323,000 fine the state imposed in September for affiliate favoritism and tariff violations. Judge Stephen T. Scialabba also granted the company’s request for rehearing and reconsideration of $300,000 in refunds to marketers ordered in the Aurora Natural Gas LLC v. Providence Gas Co. case (Docket No. D-98-1).
Price Rally Resembles Smaller Version of Last Week’s
The cash market started out this week looking remarkably similarto the way it did last week, but on a reduced scale. Because pricesweren’t digging out from nearly as deep a weekend hole as the oneof Dec. 5-7, Monday’s increases weren’t quite as spectacular asthose from the previous week but were still significantnonetheless.
Utility Stocks Weathering Storm
Just like a hurricane sends offshore rig crews to shore, atempest on the stock market can drive investors to the relativesafety of utility stocks. While many energy company stock pricesare buckling under the weight of the declining market, some utilitystocks are faring rather well, thank you. Duke Energy is anexample.
