Support

Canadian producers traveled to Ottawa last week to try shaking the Canadian capital out of its largely passive approach to the supply “crisis” threatening the continent, and “make energy resource development a national priority.”

The month of May is almost gone and support in the California legislature for the governor’s deal with Southern California Edison was still missing last week, so Republican members crafted an alternative that would not involve sale of the utility’s transmission assets to the state. In the meantime, Democratic state legislative leaders took aim at FERC as did most of the rest of the state government’s elected and appointed officials.

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.

Recognizing the need for more high-deliverability storage to support the rapid growth of gas-fired power generation in Texas, Falcon Gas Storage acquired a second storage facility in the state, with plans to increase cycling capabilities and connect the facility to the main Texas pipeline grid. The Hill-Lake natural gas storage facility is located about 100 miles west of Dallas/Fort Worth in Eastland County. Falcon purchased rights to the plant from TXU Lone Star Pipeline.

After flirting with key support at $5.00 throughout much of thesession, natural gas futures broke lower late yesterday after aprice-constructive storage withdrawal report failed to attract therequisite buying activity. The prompt April contract finished 9.5cents lower at $4.911. However, the real story was the out-months,many of which suffered double-digit setbacks. The 12-month stripclosed 10.3 cents lower at $5.091.

Firing a shot across the bow of local distribution companies(LDCs), INGAA Chairman Stanley C. Horton, CEO of Enron GasTransportation Services Co., said yesterday the LDCs are standingin the way of desperately needed interstate pipeline capacity.

As Gov. Gray Davis made the rounds in Washington and New Yorkseeking support for California’s plan to buy and run powertransmission lines, Moody’s sounded a warning that the plan couldfalter if consumers balk at the price tag at the same time powershortages hit this summer. “Absence of progress on the state’sproposed solutions to the California power crisis could worsen thepower crisis and begin to seriously threaten the health of theeconomy,” Moody’s said in a report issued after the market closedTuesday.

Western state governors included support for an Alaska naturalgas pipeline to bring in new supplies, along with expansion of gaspipelines and electric transmission lines in the lower 48 statesamong their long-term recommendations to deal with the energycrisis in the West.

Generally the cash market failed to find any support from eitherAGA’s big storage withdrawal report Wednesday afternoon or thescreen’s strong push upwards Thursday. With the exception ofupticks at a few scattered points, cash numbers ranged from flat todown nearly a dollar at Transco Zone 6 (NYC). Most of the declineswere between about a nickel and 30 cents.