Signal

Sen. Jeff Bingaman of New Mexico, the ranking Democrat on the Senate Energy and Natural Resources Committee, signaled Tuesday he will block the Republican nominee for a seat on the Federal Energy Regulatory Commission unless the White House names a Democratic nominee for the other vacant position on the five-member Commission.

FERC last Wednesday signaled its intention to conditionally approve choices made by former Alliance regional transmission organization (RTO) members to make their RTO homes in either the PJM Interconnection or the Midwest Independent Transmission System Operator (MISO).

Among the many lessons to be learned from California’s energy debacle is that restructuring has a better chance of succeeding when more of the power in a market is free to respond to price signals, according to a recent report issued by the Congressional Budget Office (CBO) examining the causes and lessons of California’s electricity crisis.

The prospect of the first significant voluntary production shut-ins in years is looming for the gas industry in about another month or so, according to an informal sampling of opinions among the trading community (“voluntary” means unrelated to a hurricane, pipeline maintenance or force majeure event). While a majority of sources fully expect to see such shut-ins beginning within a few weeks, it’s not a foregone conclusion, said a few dissenters.

Pressured by another large storage injection made even larger by a 14 Bcf revision, natural gas futures sunk lower Wednesday as traders once again set their sights on the sub-$3.00 level. However, similar to other moves down toward that level of support, yesterday’s selling was unable to demote prices beneath the $3.00 mark. The August contract settled at $3.087, down 7.8 cents for the day and just pennies above its $3.055 low.

As a clear signal that the state legislature still wants to weigh in with a broad-based settlement to California’s electricity crisis, state regulators Tuesday canceled a special meeting to vote on suspending direct access retail competition at the urging of state officials, including the Department of Water Resources (DWR), which is buying all of the power for financially crippled private sector utilities. The California Public Utilities Commission will reconsider the issue in mid-August, the drop-dead deadline for a legislative solution that will prevent a second major utility from falling into bankruptcy.

Slightly constructive long-lead weather forecasts and animportant technical signal prompted natural gas futures to arrestdownward momentum yesterday and eke out a narrow gain in a quietsession. Many traders elected to wait on the sidelines for aclearer price picture to develop.

The National Energy Board has put out a new signal that naturalgas supplies will remain tight by cutting in half its growthprojections for western Canadian production capacity after a reviewof recent performance.

The National Energy Board has put out a new signal that naturalgas supplies will remain tight by cutting in half its growthprojections for western Canadian production capacity after a reviewof recent performance.