Stage

As California kept its string of Stage One and Two power alertsgoing through most of last week, the plot in its now six-month-olddrama thickened with an endless array of actors and subplots.Without a break for intermission, the spotlight shifted to federalofficials in Washington, DC, late in the week for the second act ofsteps that might bring some order to the chaotic western wholesaleelectricity market covering about a dozen states.

As California kept its string of Stage One and Two power alertsgoing Thursday, the plot in its now six-month-old drama thickenedwith an endless array of actors and subplots. Without a break forintermission, the spotlight shifts to FERC today and what itsaction might bring in settling the chaotic western wholesaleelectricity market.

Northern Natural Gas declared a System Overrun Limitation forall its market area zones Monday.

Northwest issued a Declared Stage II Entitlement for deliverypoints north of the Kemmerer (WY) Compressor Station, effectiveSaturday until further notice. The purpose was to prevent customerdrafting of the system and to preserve Northwest’s Jackson Prairiestorage inventory, the pipeline said. A Receiving Party is subjectto penalties for delivery point takes of more than 8% above itsconfirmed nominations.

Is the market in early meltdown stage? At least one traderthought so, saying, “Yep, it sure looks that way” after the screentacked on a second straight day of double-digit losses Wednesdayand was joined by the cash market recording price drops rangingbetween a dime and a little more than 20 cents.

Pacific Gas & Electric expanded Friday’s customer-specific OFO(see Daily GPI, Oct. 20) into asystemwide Stage 2 high-inventory OFO Saturday with $1/Dth penaltiesfor positive daily imbalances exceeding a 5% tolerance.

Northwest is lifting today the Stage III Declared EntitlementPeriod for the northern half of its system that went into effect lastFriday (see Daily GPI, Oct. 9). However,the pipeline gave warning of the potential for subsequent entitlement,which allows it to impose a new entitlement after the close of theconfirmation process for the coming gas day. In addition, Northwestsaid effective today it will be necessary to limit the Kemmerer (WY)and possibly the Meacham (OR) and/or Green River (WY) Stations toprimary nominations only in order to make space for Northwest to moveClay Basin storage gas to the Jackson Prairie storage facility. Thepipeline explained the situation this way: “Throughout SeptemberNorthwest experienced continuous customer drafting. To compound theproblem, the price difference between Canadian and Rockies gassupplies has been significant, causing Kemmerer throughput to remainat or above capacity. The price difference threatens to continueindefinitely. If the drafting and unprecedented use of maximumKemmerer capacity persists, depleting Jackson Prairie and making ClayBasin unavailable for use in Northwest’s market areas, customersshould be advised that Northwest must continue to use the toolsavailable to maintain system integrity, including entitlement,alternate gas allocation and operational flow orders.”

Citing “decisive customer response,” effective with Sunday’s gas day Northwest lifted a Stage I Overrun Entitlement Period that had begun Thursday (see Daily GPI, Sept. 29). A Deficiency Period associated with a compressor outage at the Soda Springs Station in Wyoming (see Daily GPI, Oct. 2) remains in effect until further notice.

The Democrats barely mentioned the word “energy” in theirplatform at the August convention, but President Clinton put thespotlight on energy issues last week in Washington with hisdecision to release 30 million barrels of crude oil from theStrategic Petroleum Reserve (SPR), as well as a record $400 millionof funding for energy assistance to low-income households for thiswinter.