Weigh

After carving out a wide, 57-cent trading range over the previous two sessions, natural gas futures stayed close to home Friday as many traders choose to wait on the sidelines until a clearer fundamental picture develops. The September contract finished at $3.303, down 6.4 cents for the day, but up 26.3 cents for the week.

As a clear signal that the state legislature still wants to weigh in with a broad-based settlement to California’s electricity crisis, state regulators Tuesday canceled a special meeting to vote on suspending direct access retail competition at the urging of state officials, including the Department of Water Resources (DWR), which is buying all of the power for financially crippled private sector utilities. The California Public Utilities Commission will reconsider the issue in mid-August, the drop-dead deadline for a legislative solution that will prevent a second major utility from falling into bankruptcy.

While one part of California’s regulatory structure was giving an expedited okay to 95 more megawatts of power to come on line in late summer, California Public Utilities Commission President Loretta Lynch Thursday was taking a slower, more detailed approach to determine how to spread the 3-cent/kW rate increase that was approved last month for the state’s two largest investor-owned utilities. In separate action, Moody’s Investor Service removed Southern California Edison Co. from further possible downgrades because the deal it struck with the governor last Monday.

Although he praised FERC as a “fine group of people,” CaliforniaGov. Gray Davis last week made very clear that he doesn’t like whatthat group has prescribed to mend his state’s seriously flawed bulkpower market. Power executives and state market officials said theyfavored the general direction in which the Commission seemed to beheaded, but they had problems with specific proposed reforms aswell.

As the Federal Energy Regulatory Commission prepared to weigh inthis morning with the federal government’s answer to California’sbe-deviled power market, free market advocates issued last minutewarnings against taking the price cap route espoused by theCal-ISO. FERC’s meeting is scheduled to start at 9 AM EST. (Checkhttp://intelligencepress.com this morning for updates)

In the wake of a summer-long lamenting of the dysfunction, ifnot outright death, of California’s attempt at creating competitiveretail electricity markets, the state’s small remaining band ofnonutility retailers, or “energy service providers” (ESPs), isweighing in with state officials and utilities trying to breathenew life into the state’s once-optimistic drive for moremarket-based energy solutions.