Took

A mild European winter with accompanying low heating oil priceswas the saving grace for U.S. industrials that took advantage ofthe flood of heating oil imports to switch off high-priced naturalgas. Revised estimates by Raymond James Associates show industrialsswitching at 5 Bcf/d during the coldest part of the winter, ratherthan the 3 Bcf/d originally estimated.

After gapping dramatically lower on the open, natural gasfutures took on the trajectory of a safe pushed out of a ten-storywindow yesterday as the market dropped to its lowest level sinceNov. 29. The expiring February contract was the hardest hit by theselling, crashing 96.3 cents lower to close at $6.293. The outmonths did not fair much better, as the 12-month strip tumbled$0.49 lower to close at $5.563.

Commissioner William Massey, who took over as FERC chairmanFriday, is likely to have the shortest term as FERC chairman onrecord, with the Bush administration looking to replace him withCommissioner Curt Hebert Jr. as acting chairman possibly as earlyas this week, according to a member of the Bush energy transitionteam.

Energy stocks took a pounding yesterday mainly in reaction tocontinuing uncertainty over the financial health of California’stwo largest utilities, Southern California Edison and Pacific Gasand Electric, which got a weak short-term prescription by stateregulators (see related story this issue).

Southern Energy Inc. took a giant leap into the Mid-Atlanticpower market yesterday by completing the purchase of 5,154 MW ofpower generation from Potomac Electric Power Company (Pepco) for anet price of $2.65 billion.

Mirroring similar action he took last summer in the face ofskyrocketing wholesale power prices, California Gov. Gray Davis onFriday asked his state attorney general to investigate the recentsevere spike in wholesale natural gas prices at the Californiaborder, where prices are among the highest in the nation. In aseparate action, two class action lawsuits were filed Monday inCalifornia Superior Court, alleging that gas and electricity pricespikes are the result of a four-year-old “conspiracy” by SouthernCalifornia Gas, San Diego Gas and Electric and El Paso Natural Gas.(see separate story)

Southern Crossing Pipeline, first proposed in April 1998, took the long way home, but made it in time for 2000 winter service. BC Gas, the owner and operator of the Canadian line, announced that its 188-mile natural gas pipeline began service in Southern British Columbia.

Several consumer groups last week took steps toward pushing forre-regulation nationally and in several states, denouncing effortsto deregulate the electricity industry as flawed.

Several consumer groups last week took steps toward pushing forre-regulation nationally and in states, denouncing efforts toderegulate the electricity industry as flawed.