Slightly

While most of the market relaxed Wednesday with flat to slightlyhigher price performance, the Northeast was battening down thehatches in preparation for a rare visitor of late: honest togoodness winter weather like they used to have in the old days. Asa result, delivered prices in the Northeast shot higher bydouble-digit amounts, led by a spike of more than half a dollar toaround $3.20 for Transco Zone 6-NYC.

Disregarding debate over whether the new millennium has alreadybegun or won’t arrive until nearly a year from now, gas tradersgreeted the year 2000 by sending spot prices moderately lower. Itwas hardly surprising that the January aftermarket would open on adownward trend, a Texas marketer said. “We’ve been wondering whythis market has remained up as much it did. Everything seemsbearish.”

Dynegy Inc. announced earlier this week that the date of itsproposed merger with Illinova Corp. has been temporarily postponedbecause certain power plant sales to El Paso Energy will takelonger to close than expected. The company had planned on finishingthe merger Jan. 4. Now, Dynegy is pushing back its projected dateof close until later in the month.

Despite slightly lower wellhead deliverability this yearcompared to last and the growing need for producers to increasedrilling just to maintain production because of steep declinerates, Natural Gas Supply Association President Skip Horvathinsisted yesterday there will be no gas supply “shortfalls” thiswinter. As long as buyers are willing to pay the price, the gaswill be there.

A preliminary look at the Canadian supply situation prior to thewinter heating season shows a greater amount of field gas availablethis year compared to last but less gas in storage and less gas onthe way, according to officials at TransCanada Pipelines.Meanwhile, market demand continues to be strong. The bottom line,said Al Jamal, manager of TransCanada’s Western CanadianSedimentary Basin Strategic Assessment, is “the supply-demandbalance is still tightening up” and will continue to do so given anormal or colder than normal winter and a continuation of flatdrilling activity.

The possibility of a market-based solution to California’snatural gas industry restructuring stayed alive yesterday when moretime was allowed by state regulators for about 75 parties to hammerout a settlement. Without a deadline extension from the CPUC, hopesof a market-based solution to the state’s future gas unbundlingwould have been abandoned in favor of another round of regulatoryhearings. The settlement process now has until Oct. 27 to come upwith a broad-based agreement. The previous deadline was Sept. 6.

A preliminary look at the Canadian supply situation prior to thewinter heating season shows a greater amount of field gas availablethis year compared to last, but less gas in storage and less gas onthe way, according to officials at TransCanada Pipelines.Meanwhile, market demand continues to be strong. The bottom line,said Al Jamal, manager of TransCanada’s Western CanadianSedimentary Basin Strategic Assessment, is “the supply-demandbalance is still tightening up” and will continue to do so given anormal or colder than normal winter and a continuation of flatdrilling activity.

Slightly more than one year after Midwest power prices spiked to$7,500/MWh from $25/MWh, causing suppliers to default on contracts,companies to go out of business and federal regulators to concludeit was a one-time anomaly, the power market did it again.

Slightly more than one year after Midwest power prices spiked to$7,500/MWh from $25/MWh, causing suppliers to default on contracts,companies to go out of business and federal regulators to concludeit was a one-time anomaly, the power market did it again.