Supply

Natural gas futures spiraled lower into the close Wednesday afternoon, following the announcement that a whopping 102 Bcf was added to underground storage facilities last week. At the close, the prompt June contract was 15.8 cents lower at $4.483, more than 22% percent down from the $5.78 notched a little over a month ago.

Williams announced plans to develop a 1,230 MW gas-fired power plant near Fairburn, GA, to support a power supply deal the company signed with customers in the state. The plant is scheduled for completion in 2004. “This new facility will assist us in developing our growing portfolio of power agreements in Georgia,” said Bill Hobbs, president of Williams energy marketing. “We recently announced full-requirements power agreement with several Georgia Electric Membership Corporations and this new facility will strategically fit our plan to expand our power portfolio in this market, as well as all of the southeast.” The permitting is expected to take approximately one year to complete before construction of the plant will begin.

Citing “lack of supply from CMS Energy” (Panhandle Eastern) at the Gas City (IN) Compressor Station interconnect on the Lebanon Lateral, Texas Eastern said it restricted scheduled volumes there for Wednesday’s gas day. Should conditions at the meter remain unchanged, the restrictions will remain in place today, Texas Eastern said. However, a Panhandle Eastern spokesman said the shortfall resulted from customers in the frigid Upper Midwest taking extra supplies from the pipeline and causing a pressure drop at Gas City. The pressure was back to normal by Wednesday afternoon and the shortfall resolved, he said.

Power suppliers need flexibility in securing supply arrangements and should be allowed to use risk management tools, including long-term contracts, other hedging tools and, if need be, ownership of generation, against the backdrop of state-level efforts to craft and successfully implement retail electricity restructuring plans, said the Edison Electric Insititute (EEI) in recent comments filed with the Federal Trade Commission.

Power suppliers need flexibility in securing supply arrangements and should be allowed to use risk management tools, including long-term contracts, other hedging tools and, if need be, ownership of generation, against the backdrop of state-level efforts to craft and succesfully implement retail electricity restructuring plans, said the Edison Electric Insititute (EEI) in recent comments filed with the Federal Trade Commission.

Unplanned maintenance at the SOE (Sable Offshore Energy) GasPlant has caused physical supply into Maritimes & Northeast todecrease temporarily, the pipeline said. Due to this, shippers areexpected to match physical volumes to nominated receipts, it added.However, the reduced throughputs have allowed M&N to lift ITrestrictions at the Baileyville (ME) Compressor Station.

Leading Senate Democrats yesterday introduced two major bills -one addresses supply and demand policy shifts, while the otherproposes a mix of tax incentives – to tackle the escalatingproblems in the nation’s energy sectors.

Calpine Corp. subsidiary SkyGen Energy LLC has entered into a10-year agreement to supply Xcel Energy, formerly Public ServiceCo. of Colorado, with 336 MW of peaking capacity.

Mexican officials are working to add 10 new power generationprojects this year alone to guarantee the country has an adequatesupply of electric power through 2006. Energy Minister ErnestoMartens said that based on current capacity and ongoing projects,the country only has sufficient power to meet its growth demandthrough 2004.