Daily GPI

Rockies prices continued to plunge Friday, in some cases to the $1.00s, while California/Pacific Northwest/intra-Alberta numbers saw sizeable, but smaller declines. Flatness ruled in the East, where few points varied by more than about a nickel up or down from unchanged.

After notching a lower low and a lower high in light volume, natural gas futures finished modestly lower Friday in a session that featured very little in the way of fresh fundamental or technical news. With mild weather across much of the nation and little movement in the nearby crude oil pit, June natural gas was left to limp lazily sideways ahead of the weekend. The prompt month finished at $3.598, down 1.1 cents for the session and well off its $3.749 close from the prior Friday.

Facing a possible double downgrade in its credit ratings that would test the $310 million worth of triggers in two credit financings, Dynegy Inc. Chairman Chuck Watson assured shareholders Friday in the annual meeting that the company would still have enough liquidity to operate. Even so, the board of directors approved Dynegy’s plan to sell some assets and look for ways to pump up its cash box by as much as $1 billion in the next year. No proposals were announced, but Watson insisted any sales will be well thought out. “There will be no knee jerk reaction,” he said.

Marketer rankings by volume clearly do matter; otherwise energy companies wouldn’t go out of their way to deceive investors and counterparties by doing “round-trip” or “wash” trades, which are purely designed to boost volumes and trading revenues. Reliant, Dynegy and CMS last week all admitted to round-trip trading, in which two companies buy and sell back a given volume of gas or power at the same price to give the appearance of larger trading operations.

Within less than 24 hours after Northwest Natural Gas and Enron Corp. decided to terminate their $2.98 billion stock/debt-assumption deal for the gas utility to buy bankruptcy-mired Enron’s Portland General Electric (PGE) subsidiary, Moody’s Investors Service Friday downgraded PGE and affirmed the gas company’s “stable” rating. The two companies said Thursday they had mutually agreed to cancel the deal because of the increasing complexity of the transaction given Enron’s bankruptcy status (see Daily GPI, May 17).

Fuming over the White House’s continuing refusal to turn over information related to its contacts with Enron Corp., Senate Governmental Affairs Committee Chairman Joseph Lieberman (D-CT) said he plans to seek authority to subpoena the information from officers or staff within the Executive Office of the President.

Connecticut’s Department of Environmental Protection (DEP) has formally asked FERC to defer final action on the Connecticut-to-New York Islander East Pipeline project and any other proposed gas pipeline in Long Island Sound until the spring of 2003.

The Oklahoma Corporation Commission (OCC) on Thursday approved nearly $12 million in consumer credits under a plan for customers of Oklahoma Natural Gas Co. (ONG) The commission voted 2-1 to adopt the order, which would give ONG’s customers credits and about $36 million in natural gas-cost savings.

Development of federal leases in the Powder River Basin of Wyoming and Montana will have to await a revised plan to mitigate the impact of brine brought to the surface in coalbed methane drilling on rivers in the area, according to a review published by the Environmental Protection Agency (EPA) last week.