Daily GPI

The California Public Utility Commission said it will host aroundtable on energy market and infrastructure issues Jan. 25 from9 a.m. to 5 p.m. at the Al Bahr Shrine Auditorium 5440 Kearny MesaRoad in San Diego. The commission currently is exploring issuesrelated to energy infrastructure, including rules for electric andgas competition and policies on distributed power. Discussions atthe roundtable will cover gas and power supply and demand,reliability and market structure. CPUC President Richard Bilas andCommissioners Josiah Neeper and Carl Wood are planning to attend.The CPUC plans to bring up issues such as the following: Are gasand electric supplies available to the San Diego area adequate tomeet consumers’ needs? What is the current level of gas and powersupply reliability? What new generation or energy conservationmeasures, or combination of both may be used in the future to meetsupply needs? Will electric prices decrease, stabilize or bepredictable now that the rate freeze has ended for San Diego Gas& Electric and the utility’s transition charges are paid off?What about the other utilities? Those interested may file writtencomments by Feb. 4. A written report on the roundtable will beissued.

Texas Eastern reinstated until further notice Monday afternoon anOFO requiring that all deliveries in its M-3 market zone be made at auniform hourly rate. As in last Friday’s OFO that was suspendedSaturday morning (see Daily GPI,Jan. 18), non-compliance penalties are $25/dth and all M-3Operational Balancing Agreements are suspended for the purposes ofhourly allocations only.

It was time to get out the smelling salts again Tuesday torevive traders swooning from the altitude of Northeast citygates.Quote averages zoomed higher by more than $2 at a few points, andone source reported hearing that intra-day numbers for deliveriesinto the Boston area via Tennessee and Algonquin peaked at $10.

Natural gas futures resumed trading Tuesday right where theyleft off last week as traders pressured the market higher in twodistinct buying surges. The first one came at 10:00 a.m. (EST),when February opened a penny above last Friday’s $2.35 high onreports of the coldest air of the season for the Northeast U.S. Thesecond wave of buying came near the close, in a local-led attemptto push the spot month above its 40-day moving average at $2.385.In the end that push was only half-successful; February was able topunch through its 40-day average, but was unable to settle aboveit. The contract closed up 6.1 cents at $2.383 amid light volume ofjust 43,581.

Fresh off its purchase of Sonat Inc., El Paso Energy Corp.re-entered the consolidation game by merging with Coastal Corp. ina $16 billion deal announced Tuesday. The potential union wouldcreate a pipeline empire capable of serving almost all of the majormarkets in the country. The companies expect the transaction,accounted for as a pooling of interest, to be completed by thefourth quarter of this year.

Significant changes to Enron’s corporate structure, includingthe sale of Enron Oil & Gas and planned divestiture of PortlandGeneral Electric, made the headlines in 1999, but its traditionaloperations more than carried the company flag. Enron posted awhopping 37% increase in net income to $957 million and an 18% risein earnings per share to $1.18 for the year. Its revenues rose 28%to $40 billion and its marketed volumes jumped 19% to 32 trillionBtue/d. North American gas sales volumes reached 13 Bcf/d up from10.6 Bcf/d while U.S. power sales fell slightly to 380.5 millionMWh from 401.8 million MWh in 1998.

Once again all of the “hot” price action Friday occurred in theNortheast, and that’s because it was downright bone-chilling there.This time it was the turn of Algonquin citygates to occupy the toprung of the pricing ladder as they ran up more than $1.00 into the$4.80s and peaked at $6.50. A large aggregator said she later heardintra-day citygates trading as high as $8. She and another sourcesaid Algonquin was curtailing all IT and 50% of Secondary Firmservice downstream of the Cromwell (CT) Compressor Station Fridayand cutting Secondary Firm to zero past Cromwell for Saturday. Thataffected all deliveries to Boston, Rhode Island and the easternhalf of Connecticut, one said.

Formed when one day’s high is lower than an adjoining day’s low,chart gaps are a technical feature that garner plenty of marketattention. And over the last two weeks, natural gas traders havedone just that; attempting to fill the more than dime void leftbetween the $2.305 low from Dec. 30 and the $2.20 high from Jan. 4.Each day since then, they have steadily chipped away at the gap bymaking higher highs in each of the last seven trading sessions.That set the stage last Friday. Would the futures market crumbleunder the weight of sagging holiday weekend demand, or continuehigher to plug the hole up to $2.305? That question was answeredsuccinctly Friday morning when buyers, armed with fresh weatherforecasts and propelled by stop-loss buying, bid the Februarycontract 7 cents higher to a $2.322 close.

Canadian natural gas exporters set their 12th consecutive annualsales record in the United States during the contract year thatended Oct. 31. Exports climbed to 3.26 Tcf last year, according toa scorecard kept by the National Energy Board. The new recordimproved by 5% on the previous high of 3.1 Tcf set in the 1997-98contract year.