Responding

Responding to projected shortages in natural gas and oilsupplies, the Minerals Management Service (MMS) has announcedproposed new rules to selectively extend deep-water royalty reliefin the Gulf of Mexico past the Nov. 28 expiration of the currentrelief program.

Responding to projected shortages in natural gas and oilsupplies, the Minerals Management Service (MMS) has announcedproposed new rules to selectively extend deep-water royalty reliefin the Gulf of Mexico past the Nov. 28 expiration of the currentrelief program.

Responding to state political pressure triggered by incumbentutilities, the California Independent System Operator’s (Cal-ISO’s)board will meet today in a special session to reconsider its movelast week to lower wholesale power price caps to $500/MWh in theface of a continuing grid and peak generation reliability crunch.

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.

Responding to private weather forecasts early yesterday callingfor continued cold weather in the Northeast, market buyers showedtheir muscles at the starting gate and followed through with strongruns in both futures and cash. February cash prices at the HenryHub were approaching dime increases while March futures soared 13cents to $2.662, a smidgen off its high for the day of $2.675. TheApril contract was up 10.4 cents to $2.605, just under its high of$2.610, and May drove 7.7 cents higher to $2.575.

Responding to outside assessments that U.S. natural gasproduction could be 5% below the average of recent heating seasons,the American Gas Association (AGA) said it expected “ample suppliesof natural gas to be available this winter at competitive prices.

FERC staff intentionally avoided responding to technicalquestions about the proposed auction concept that were submitted byseveral gas industry groups prior to a workshop held earlier thisweek, a pipeline group representative charged.

California lawmakers, responding to pressure from utilities andutility employee unions, have enacted a law outlawing customerchoice for residential and small commercial natural gas customersuntil at least the year 2000. The new law (SB 1602) passed in thewaning days of the 1998 legislative session and signed by Gov.Wilson Tuesday prohibits the California Public UtilitiesCommission, which pushed through restructuring of the electricindustry, from moving ahead with gas unbundling . Between now and2000 the CPUC can continue to investigate and talk about choice forsmall customers, but it cannot take any actions without gettinglegislative authorization.