Urge

A group of major energy purchasers formed as a result of last month’s historic blackout urged Sen. Pete Domenici (R-NM) last week to reconsider a deal backed by Sen. Richard Shelby (R-AL) that would delay implementation of FERC’s pending standard market design (SMD) proposal for U.S. wholesale power markets for several years.

Senate Democrats Tom Daschle (D-SD), Jeff Bingman (D-NM) and John Breaux (D-LA) are urging the Bush administration to reconsider its opposition to the natural gas price-floor tax subsidy provision for Alaska producers in the Senate energy bill and the mandated southern route for the Alaska pipeline. Without these measures the Alaska pipeline will not be built, the Democrats said in a letter to Bush.

The nation’s chief economic guru Alan Greenspan signaled a growing alarm over high natural gas prices and tight supplies during an appearance before a joint congressional panel last Wednesday.

State utility regulators from five Mid-Atlantic/Northeast states and the District of Columbia last week urged the U.S. Congress to “resist efforts” to delay implementation of FERC’s pending standard market design (SMD) rulemaking.

The nation’s chief economic guru, Alan Greenspan, signaled a growing alarm over high natural gas prices and tight supplies during an appearance before a joint congressional panel Wednesday.

Despite clear evidence of western spot power and gas market manipulation, FERC made no decision last week on whether billions of dollars in long-term western wholesale power contracts negotiated in 2000 and early 2001 should be scrapped or altered. The Commission vaguely indicated that the contracts would be upheld and sent back to a settlement judge, and that suggestion angered western senators, who said the Commission is not meeting its responsibility under the Federal Power Act.

The drumbeat has begun in the campaign to demolish roadblocks on the way to developing more domestic natural gas supplies. The American Chemistry Council (ACC), representing America’s largest industrial users of natural gas, Tuesday were joined by members of Congress and key allied trade associations in a press conference calling for comprehensive energy legislation that addresses the long-term structural problems facing energy markets.

Unlike pipes and shippers who appear to favor continuing negotiated rates, the California Public Utilities Commission (CPUC) called on FERC this week to halt the negotiated-rate program for pipelines, claiming it has turned jurisdictional pipes into profit-takers and has resulted in abuses that were unforeseen by the Commission when it instituted the practice six years ago.

The Federal Energy Regulatory Commission should continue to allow interstate gas pipelines to offer their customers customized negotiated rates as an alternative to maximum recourse rates, both shippers and pipelines said Monday. But they were divided on the issue of whether the Commission ought to make some nips and tucks to its negotiated-rate program.