Responding to an April order requiring them to show how they have cleaned up their price-reporting practices, a number of energy companies last week told FERC they either have cut back their natural gas trading to bare-bones operations or completely pulled out of the business, fired and disciplined rogue traders, and bowed out of price reporting until reforms are enacted.
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CA Gas Price Indices Legislation Stalled Over Amendment
An add-on provision requiring utilities to extend for another five years the current five-year contracts they have with small qualifying facility (QF) generating plants has temporarily derailed a proposal in the California state senate to crack down on alleged misuse of published natural gas price indices that are used by state regulators and market participants to establish contract pricing formulas.
Transportation Notes
Texas Eastern will cancel Saturday the OFO that took effect March 1 (see Daily GPI, Feb. 26) requiring customers to withdraw gas from storage only after maximizing the use of mainline firm transportation. The OFO regarding storage inventory transfers issued Feb. 28 (see Daily GPI, March 3) remains in effect. “While storage deliverability relative to firm withdrawal rights is recovering, the fact remains that storage inventories are low and storage deliverability is a function, in part, of inventory levels. Accordingly Texas Eastern reminds all point operators and shippers of the need to limit ‘due pipeline’ imbalances so as not to unduly place transportation support demands on Texas Eastern’s storage fields,” the pipeline said Thursday.
FERC’s Massey Favors Standards to Assure Reliability of Price Indexes
In an effort to restore price certainty in the markets, FERC at a minimum should implement standards requiring jurisdictional companies to show the agency that the natural gas price indexes referenced in their tariffs and contracts are reliable, said Commissioner William Massey last Wednesday.
FERC’s Massey Favors Standards to Assure Reliability of Price Indexes
In an effort to restore price certainty in the markets, FERC at a minimum should implement standards requiring jurisdictional companies to show the agency that the natural gas price indexes referenced in their tariffs and contracts are reliable, said Commissioner William Massey Wednesday.
People
Peoples Energy Chairman and CEO Richard E. Terry announced plans to retire Aug. 1, consistent with the company’s policy requiring officers to retire upon attaining the age of 65. Thomas M. Patrick, currently president and COO, is expected to assume the positions of chairman and CEO in August. Following a pattern among regulated utilities, both men moved up through the company’s legal department. Terry’s retirement will cap a 30-year career with Peoples, including more than 11 years as chairman and CEO. Patrick has been with Peoples for 26 years. He began his career in 1976 as a member of the company’s legal department and was elected president and COO in 1998. He has been a director of the company since 1998. Peoples gas utility division serves about 1 million retail customers in Chicago and northeastern Illinois.
Transportation Notes
PG&E Gas Transmission-Northwest (GTN) reported discovering internal problems with the B unit at Station 6, requiring that the unit be withdrawn from service. As a result, Kingsgate capacity was restricted to 2,400 MMcf/d in Thursday’s Intraday 1 scheduling cycle until further notice.
San Diego Assails FERC Refund Calculations
FERC’s order requiring potential refunds of up to $69 million on January bulk power sales in California has come under further assault, with San Diego County claiming that the “proxy market clearing price” established by the Commission in the order allows sellers to recover almost double their marginal production costs, and that the decision not to subject sales during non-Stage 3 emergencies to refunds was grossly unfair. It further blasted FERC for not ordering power suppliers to publicly disclose their rates and costs.
San Diego Assails FERC Refund Calculations
FERC’s order requiring potential refunds of up to $69 million onJanuary bulk power sales in California has come under furtherassault, with San Diego County claiming that the “proxy marketclearing price” established by the Commission in the order allowssellers to recover almost double their marginal production costs,and that the decision not to subject sales during non-Stage 3emergencies to refunds was grossly unfair. It further blasted FERCfor not ordering power suppliers to publicly disclose their ratesand costs.
DOE Extends Emergency Order for CA
Energy Secretary Bill Richardson has extended for another weekhis earlier emergency order requiring generators and marketers tomake power available to the California market to avoid the threatof rolling blackouts. The order, which was first issued on Dec. 14,expired Tuesday at midnight (Pacific time). The new order willremain in effect until Dec. 27, unless modified.