Warning

Standard & Poor’s (S&P) Rating Services placed the credit rating of Southern Union Co. on CreditWatch with “negative implications” Monday after the distribution company announced that it and AIG HighStar Capital LP had reached a definitive deal to buy CMS Energy’s Panhandle natural gas pipelines and liquefied natural gas (LNG) facilities for an estimated $1.83 billion.

MRT posted a System Protection Warning that becomes effective with the start of Tuesday’s gas day. It is subject to these conditions: MRT will not schedule any Main Line IT, AOR or imbalance volumes for delivery north of Glendale, AR; firm volumes will be limited to their primary direction of flow; MRT is not accepting short imbalance positions; and shippers may not nominate supply from existing long imbalance positions. Saying it has capacity available on the East Line, MRT urged shippers who were relying on Main Line IT, AOR and/or imbalance volumes to re-source supply to the East Line or reduce applicable delivery volumes in order to avoid customer-specific OFOs.

Effective with the start of Tuesday’s gas day, MRT is posting a System Protection Warning subject to these conditions: (1) MRT will not schedule any Main Line IT, AOR (authorized overrun) or imbalance volumes for delivery north of Glendale, AR; (2) firm volumes will be limited to their primary direction of flow; (3) MRT is not accepting short imbalance positions; and (4) shippers may not nominate supply from existing long imbalance positions. Saying it has capacity available on the East Line, MRT urged shippers who were relying on Main Line IT, AOR and/or imbalance volumes to re-source supply to the East Line or reduce applicable delivery volumes in order to avoid OFOs.

Standard & Poor’s issued a warning Thursday that more credit rating declines and possible defaults “loom on the horizon” even though the industry already has experienced its sharpest credit slide in decades.

Depending on the severity of the coming winter, Raymond James energy analysts are warning that the U.S. natural gas supply may be “rapidly careening” toward a gas shortage, anywhere from 3-10 Bcf/d short of demand. Analysts revised their gas price estimates upward through 2003, and expect prices to reach at least $4.50/Mcf by the first quarter of next year.

Depending on the severity of the coming winter, Raymond James energy analysts are warning that the U.S. natural gas supply may be “rapidly careening” toward a gas shortage, anywhere from 3-10 Bcf/d short of demand. Analysts revised their gas price estimates upward through 2003, and expect prices to reach at least $4.50/Mcf by the first quarter of next year.

Public Service Co. of New Mexico (PNM) is warning its customers of potentially higher natural gas prices this winter, anticipating a continued steady rise in wholesale costs that the Albuquerque, NM-based combination utility has seen since last spring. Compared to last winter when prices never exceeded 28 cents/therm, PNM said they could range between 35 and 50 cents/therm this winter. The utility said it has hedged against gas price spikes by buying most of its supplies on a longer term, fixed-price basis. The supply portfolio saved its customers about $27 million in the price-spike period of winter 2000-2001, a PNM spokesperson said. Energy prices generally could rise considerably if the winter is colder-than-normal, the utility spokesperson said. And another factor bidding to influence price is the situation in the Middle East. If the U.S. is at war there, prices could be increased substantially. In preparation, PNM is urging it customers to take various energy-saving steps to mitigate against winter price spikes.

Dominion Resources, which up until now has largely avoided the collapse in energy stocks, saw its shares tumble 10% Monday to $52.33 in response to a reduced earnings outlook for 2003. The prospective reduction will come mainly from a pending equity sale that is designed to strengthen Dominion’s balance sheet and debt coverage ratios to meet stricter standards from the credit ratings agencies, which are concerned with the heightened risk in the energy industry.

The Energy Information Administration (EIA) is attempting to post warning signs to help prevent the gas industry from entering what might be considered the Bermuda Triangle of weekly gas storage levels. Ever since the EIA took over the weekly storage survey from the American Gas Association (AGA) in May, the industry has been lost in a sea of revisions, struggling to find its way through weekly changes that have strayed so far from the historical norm.