Solution

In an open letter to the governor of California, Vincent Viola,the new chairman of the New York Mercantile Exchange suggested thestate could solve its power price problems if it “promptly” turnedloose large customers and let them buy power for themselves,eliminated any monopoly, “be it the PX, Department of WaterResources, or the Independent System Operator,” and started usingfinancial instruments to protect consumers, rather than lock inlong-term, high-priced contracts.

Merrill Lynch urged investors in energy marketing stocks to”proceed with caution” during this period of “finger pointing” inCalifornia. “Outrageous claims and ignorance appear to be thethemes of the day,” the Wall Street analysts said in a bulletintitled “Santa Claus, the Tooth Fairy and Leprechauns Do Exist -Just Ask California.”

Participants report there is definitely light at the end of thewinding tunnel that has encapsulated California’s troubledelectricity market, but the question Wednesday was whether it wasthe result of a temporary power surge or light from the opening ofbroader, longer term solutions that include fixing the market,persistent supply shortages, beleaguered generators andcash-starved utilities.

To resolve concerns raised by the Federal Trade Commission overthe proposed merger of DTE Energy and MCN Energy, MCN has agreed totransfer a property interest to a unit of Unicom Corp. that wouldallow for the use of up to 20 Bcf of natural gas transportationcapacity annually on MCN’s Michigan Consolidated Gas Co. system inthe relevant distribution area.

To resolve concerns raised by the Federal Trade Commission overthe proposed merger of DTE Energy and MCN Energy, MCN has agreed totransfer a property interest to a unit of Unicom Corp. that wouldallow for the use of up to 20 Bcf of natural gas transportationcapacity annually on MCN’s Michigan Consolidated Gas Co. system inthe relevant distribution area.

Chevron has launched its energy services business, Chevron Energy Solutions, building on its purchase of a block of contracts and related assets from the disbanding PG&E Energy Services (see NGI, June 5).

Chevron has launched its energy services business, Chevron EnergySolutions, building on its purchase of a block of contracts andrelated assets from the disbanding PG&E Energy Services (see DailyGPI, June 2).

Building more greenfield natural gas pipelines to the Northeastis not the answer. In fact, widespread switching from distillateoil to natural gas will not shield the region’s energy customersfrom a repeat of the heating oil price shocks that they experiencedearlier this year. If anything, it could aggravate prices not onlyfor distillate oil but for gas, the Energy InformationAdministration (EIA) said in a report issued last Wednesday.

Building more greenfield natural gas pipelines to the Northeastis not the answer. In fact, massive switching from distillate oilto natural gas will not protect the region’s energy customers froma repeat of the heating oil price shocks that they experiencedearlier this year. If anything, it could aggravate prices not onlyfor distillate oil but for gas, the Energy InformationAdministration (EIA) said in a report issued yesterday.