Remain

Despite numerous press conferences and a lot of hype from political leaders, the bulk of the nearly 10,000 MW in California’s long-term electricity deals still have not been nailed down in formal signed contracts. The agreements are suppose to provide up to 7,000 MW this year and up to 10,000 MW over next 10 years.

In the immediate aftermath of the California Public UtilitiesCommission’s sweeping moves to stabilize the state’s electricityoperations, the regulators and the governor’s staff are sloggingthrough endless details that will have to be worked out ifcash-strapped investor-owned utilities are going to be able to paythe state and generators and still have enough left over to covertheir own costs.

So much for those who expected Thursday’s general flatness toremain in vogue for a while. Chilly Pacific Northwest points(Sumas, Stanfield and Kingsgate) constituted the only regionalmarket where flat quotes continued to prevail Friday, whileelsewhere most prices ranged from mildly lower to down about 20cents. California again registered much greater declines than theoverall market.

Gas supplies probably will remain tight, NGSA President SkipHorvath told the Consumer Federation of America’s Consumer Assembly2001 in Washington, D.C. yesterday. “Although producers aredrilling all out and production numbers are beginning to reflectour work, forecasters are predicting continued higher prices.”Horvath spoke on a panel titled “Rising Energy Prices Clobber thePoor: What Should be Done?”

El Paso declared an Unauthorized Overpull Penalty situationFriday that was to remain in effect until further notice.

If New England’s interstate natural gas pipelines remainunchanged, transport constraints are likely to arise during winter2003, affecting more than 1,700 MW of gas-fired electricitygeneration in the region, according to a new study conducted by ISONew England (ISO-NE) and Levitan & Associates. Consequently,constraints could intensify by winter 2005, with capacityshortfalls potentially affecting up to 3,200 MW of gas-firedelectricity production.

Depending on your perspective, California either moved towardfuture solutions to its nagging energy crisis or took several stepsbackward yesterday with the launch of its electricity bulk buyingprogram for long-term, fixed-price supplies.

Due to forecasts of colder than normal temperatures in theKansas City metropolitan area, Williams implemented an OFOSaturday. The OFO was to remain in effect though Monday’s gas dayor until further notice.

Boosted by what may be the most bullish weather forecast to hitthe industry in years, natural gas futures spiked dramatically inmultiple buying surges last week as traders pressed the envelope oftheir long exposures.