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In an attempt to put a lid on price volatility this summer, FERCyesterday approved temporary bid caps of $1,000/MWh for the NewEngland and New York power generation markets, bringing the bidceilings for the entire Northeast and Mid-Atlantic regions intosync.

While some might say it’s long overdue, FERC yesterdayauthorized its staff to undertake a “fact-finding investigation”into conditions in the bulk power markets to determine the reasonsfor the wild price volatility and reliability problems that havegripped the market during the past couple of summers.

The chairman of the gas demand task force of the NationalPetroleum Council (NPC) said yesterday his projections of a 30 Tcfmarket by 2010 in the December NPC study on natural gas “might havegrossly underestimated inherent demand.” The growth of gas firedpower generation has caught everyone by surprise and could have theunexpected effect of causing net gas withdrawals from storageduring the summertime as early as next year, said Matthew R.Simmons, president of Simmons & Company International.

FERC slapped the proposed Trans-Union Interstate Pipeline withsomething of a double-edged sword yesterday. While it issued acertificate for the 42-mile, 430,000 Dth/d pipeline project, itdenied its request to operate it as a single-use line.

Utilities are playing “switching games” with consumers whoattempt to use lower-cost competitors or who attempt to use onlineenergy companies, charged the nonprofit United HomeownersAssociation yesterday. The watchdog group, which based its analysisof natural gas deregulation on two major U.S. markets —Washington, D.C. and Atlanta, GA — said the cost savingsavailable under energy deregulation actually may be denied toconsumers, or take so long that the consumers finally give up.

Enron Energy Services inked another commodity managementagreement yesterday with Rich Products Corp. for 11 years. Underthe $130 million-plus agreement, the Enron Corp. subsidiary willmanage electricity and natural gas services.

The battle lines are forming as competition for recognition asthe top online energy trading platform heats up. The Energy TradingPlatform Holding Company (ETPHCo.), comprised of six of the leadingpower and natural gas trading companies, has entered into a deal topurchase an interest in Atlanta-based IntercontinentalExchange,which claims to be the world’s largest Internet-based,over-the-counter (OTC) marketplace for energy and metals.

Having lost out in the U.S. Senate’s Energy and NaturalResources Committee, coal-bed methane producers have taken theirbattle against a bill to formalize the dispute resolution processwith coal producers before a House subcommittee, pointing to apotential loss of natural gas resources.

On behalf of the Natural Gas Supply Association, Conoco GeneralManager Mike Johnson is scheduled today to recommend that thegovernment maintain a hands-off approach to the natural gas marketdespite concerns about a potential crisis from Senate Energy andNatural Resources Committee Chairman Frank Murkowski, Sen. CharlesE. Schumer (D-NY) and other lawmakers. Several congressmen andsenators have voiced concern recently about high prices, low storagelevels and rising demand (see Daily GPI, July 11).