Shortage

The natural gas pipeline integrity rule, which would require interstate and intrastate pipes to periodically inspect their systems using smart pig technology, could cause large portions of the transportation grid to be down in the years ahead and would further “aggravate” what is shaping up to be a tight gas supply situation, said a top official of the Interstate Natural Gas Association of America (INGAA).

There is enough natural gas for the industry to make it through the winter, but the fear of a shortage is what’s driving gas prices higher, according to Paul Wilkinson, vice president of policy analysis for American Gas Association (AGA).

A database of actual prices in 18,320 natural gas transactions by five major generators and Coral Energy in California from October 2000 through June 2001 closely tracks the spot gas prices from publications as specified in the original power market mitigation formula by the Federal Energy Regulatory Commission, according to a report by an independent analyst.

A database of actual prices in 18,320 natural gas transactions by five major generators and Coral Energy in California from October 2000 through June 2001 closely tracks the spot gas prices from publications as specified in the original power market mitigation formula by the Federal Energy Regulatory Commission, according to a report by an independent analyst.

Power grid operators across the Northeast, Midwest, Mid Atlantic and Ontario sent out power shortage warnings and calls for conservation again last Wednesday, as the early summer heat continued to bake the regions with 90-100 degree temperatures and high humidity, driving up power usage and prices.

Confusion over the new FERC formula for pricing wholesale power during emergency situations in the West may have caused some generators to withhold supply from the California and Nevada markets early last week, aggravating the already-existing tight supplies in both states, power officials said.

Confusion over the new FERC mechanism for setting wholesale power prices during emergency situations in the West may have caused some generators to withhold supply from the California and Nevada markets earlier this week, aggravating the already-existing tight supply situations in both states, power officials said.

In an effort to assist the Northwest meet its needs during the current energy shortage out West, the Bonneville Power Administration plans to establish a short-term policy that will encourage the immediate addition of electricity generation to help the region until planned long-term generation can be built. While the BPA will not fund construction of the generators nor buy the output, BPA said that the policy complements the load reduction strategy it has with its customers. In addition, BPA noted that customers who reduce their load on BPA by 10% would be allowed to use temporary small generators to supply a small portion of their needs. The agency has asked its customers to reduce their demands on BPA so that it can avoid expensive large power purchases in the wholesale market. Such purchases could lead to a triple-digit wholesale rate increase this October, according to BPA (see Daily GPI, April 11). The temporary policy would run from June 1, 2001 through Sept. 30, 2002. But the BPA said that before it implements the policy next month, it wants to hear from the public on the details of the plan. A public meeting on BPA’s proposed policy is scheduled for May 24 at BPA headquarters in Portland, OR.

Indications of the shortage of pipeline capacity to California showed up again recently in a protest filed by producers against deals made by Transwestern Pipeline with two shippers for gas transportation in February. The producers claim others did not have a meaningful opportunity to bid on capacity and that it was sold outside the tariff rate structure.