Wholesale

Wholesale power prices helped propel Southern Co.’s earnings up 5% in the second quarter, and company officials said the Southeast’s largest utility remains on target to meet its financial and operational goals for the year. Earnings were $270 million, or 40 cents a share, at the top of the analysts’ predictions for the quarter, up from $256 million, or 39 cents a share for the same period of 2000. Operations earnings from the quarter excluded Mirant, the company that completed its spin off to Southern’s shareholders April 2 (see NGI, Feb. 26).

The reaction to Monday’s failure to obtain a federal mediated wholesale electricity settlement from a California state legislative leader and the state’s largest investor-owned utility were mixed, but both resolved that the state’s stakeholders will move on, seeking relief from what are alleged to be excessive charges from merchant generators/suppliers over the past months.

Confusion over the new FERC formula for pricing wholesale power during emergency situations in the West may have caused some generators to withhold supply from the California and Nevada markets early last week, aggravating the already-existing tight supplies in both states, power officials said.

Despite decreased earnings from its wholesale operations and the impact of normal weather, Entergy Corp. indicated last Thursday that it is confident its second quarter 2001 earnings will be at least 5% higher than the current published First Call earnings consensus of $0.91 per share. The company attributed the strong results to “excellent performance” in its competitive businesses.

Despite decreased earnings from its wholesale operations and the impact of normal weather, Entergy Corp. indicated on Thursday that it is confident its second quarter 2001 earnings will be at least 5% higher than the current published First Call earnings consensus of $0.91 per share. The company attributed the strong results to “excellent performance” in its competitive businesses.

Pacific Gas and Electric Co. Tuesday announced that due to a decrease in wholesale natural gas prices, and a decline in usage, the average residential gas bill in May is expected to decrease as much as 42% from April bills, to $47. The new rates will take effect May 7. The average residential customer uses 30 therms a month in the summer season (May-October) and 70 therms a month in winter (November-April). The anticipated drop in usage accounts for most of the significant decrease expected in monthly bills. However, the actual cost of gas is also declining in May. The procurement cost will be $0.78 per therm, compared with $0.84 per therm in April, a decrease of more than 9%. The delivery charge that customers pay the PG&E utility has not increased, and will not change.

The California Independent System Operator’s (Cal-ISO) claim that market power has inflated wholesale energy costs in the state by more than $6.2 billion since last May (see NGI, March 26) should be rejected because the figure came from a report that was approved by the organization’s illegally formed governing board, contends Williams Energy Marketing and Trading.

The California Independent System Operator’s (Cal-ISO) claim that market power has inflated wholesale energy costs in the state by more than $6.2 billion since last May (see Daily GPI, March 23) should be rejected because the organization is run by an illegally formed governing board, contends Williams Energy Marketing and Trading.

Tucson Electric Power Co. (TEP) has signed a five-year wholesalecontract to supply 60 MW of electricity to Phelps Dodge EnergyServices. The contract calls for TEP to supply the power at alltimes except during the company’s peak customer energy demandperiods from July through September of each year. TEP ChairmanJames S. Pignatelli said the contract is an important one for bothcompanies. “This agreement provides a comfort factor for PhelpsDodge as it plans ahead for its energy needs,” Pignatelli said.”And for TEP, the contract provides a stable, profitable margin forfive years and a solid boost to our financial outlook in a volatileenergy market.” Pignatelli said TEP expects the agreement togenerate revenues of about $30 million annually.