Showing some tiredness with the continuing round of “emergency”declarations swirling throughout California’s energy markets, stateregulators Thursday refused to consider an eleventh-hour request bySouthern California Edison Co. to modify a legislatively-setpricing formula for renewable energy and qualifying facilities (QF)from which it buys power in lieu of the current unprecedentednatural gas prices. The payment formula is based on price indicesfor gas at the California-Arizona border, which saw spot prices atthe $36 to $41/Mcf level earlier this week.
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California Border Nears $7 in Overall Bull Market
Southern California border quotes for swing gas peaked just shyof $7 Monday amid rising prices throughout the general market.Increases at non-border points ranged from about a nickel to 20cents, with most in the vicinity of a dime; however, the PG&Ecitygate went up a little more than 40 cents to around $5.90.
FERC Seeks to Quicken Pipe Project Processing
FERC’s Office of Energy Projects (OEP) plans to hold a series ofpublic meetings throughout the nation to encourage interstate gaspipelines to develop “strategies for constructive publicparticipation in the earliest stages” of their project planning.
Sub $4.00 Futures? Not So Fast..
Natural gas futures gapped lower on the open for the second dayin a row Tuesday, but unlike Monday’s session that saw pricescontinue lower, prices rebounded throughout the day yesterday tofinish in positive territory. After putting in a $3.92 low justminutes after the opening bell, the August contract was boosted bya round of short-covering which deposited the prompt month 4.2cents higher to close at $4.044.
Futures Rally 6.4 Cents, Retest Recent Highs
After gapping up an impressive 2.5 cents at the open yesterday,natural gas futures chopped higher throughout the session astraders grappled with the potential of prices climbing even higherthis summer. The May contract reached its $3.15 high for the dayshortly after 2:30 P.M. (EST), only to tumble lower to settle at$3.137 amid a flurry of market-on-close selling. Estimated volumewas light with only 57,253 contracts changing hands.
Fundamental Rally Gives Analysts Pause
Fueled by forecasts calling for cooler temperatures throughoutmuch of the country later this week, natural gas futures probedhigher in two distinct buying surges yesterday. The first push cameshortly after Monday’s lower open, when traders bid the Januarycontract to $2.50. However, those gains were erased almost entirelyby early afternoon, intra-day profit taking. But the bulls were notfinished, and after digging in their heels at $2.47, weresuccessful in pushing prices through $2.50 late in the session. TheJanuary contract finished up 6.3 at $2.509.
Weekend Softening Moderate Except in Southwest, California
Holiday weekend prices fell as expected throughout most of thecash market Wednesday, but it was hardly the meltdown that sometraders had thought possible late in the previous week. Except forthe Southwest basins and California, few points fell by any morethan a dime, and most of the Gulf Coast, Midcontinent and Rockiesdeclines were about a nickel or less.
Except for Rockies, Price Descent Slows
With freezing temperatures essentially a no-show throughout theU.S., cash prices continued to decline in most markets Wednesday,with the biggest declines occurring in the supply-engorged Rockies.However, except for western points most of the softness was mild,and some Northeast citygates registered moderate upticks.
Storage and Weather Reports Cause Choppy Trading
Price points throughout the country varied in their responses toweather forecasts, the American Gas Association storage reportexpectations, and a rising futures screen yesterday. Despite thelack of direction, many traders agreed that weather, which wasresponsible for significant increases in the East and Midcontinentearlier in the week, is set to regain its leadership role in themarket, and push prices down heading into the weekend.
NRG Builds Power Giant In Hungry Northeast
While power demand hit record levels throughout the Northeastand power prices rocketed to $850/MWh last week, NRG Energycontinued to position itself as a major generator in thepower-hungry region. The subsidiary of Northern States Power landeda major power generation deal with Connecticut Light & Power ofHartford. NRG is snatching up 2,235 MW of generating capacity fromCL&P for $460 million.