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In anticipation of a hot summer, the California IndependentSystem Operator (ISO) this week will kick off its Power Watch 2000awareness campaign during which it will issue media alerts advisingthe public when electricity demand is nearing peak levels and ofthe need to use conservation measures.

The calls for FERC to make changes to Order 497’s pipelineaffiliate abuse regulations got louder late last week, as Dynegyand Amoco filed some suggested remedies in response to the resultsof an April technical conference on four negotiated parking andlending (PAL) agreements between Koch Gateway and its affiliateKoch Energy Trading (KET).

FERC ruled last week the six-month suspension of Destin PipelineCo. L.L.C.’s blanket certificate authority does not apply to theconstruction of interconnects for two projects currently beingbuilt in Mississippi.

Developers of what at one time was California’s first merchantpower plant proposal are gearing up for more concentrated effortsto develop natural gas deals and power marketing efforts, assumingthey get final federal government environmental okays for their$350 million, 700 MW High Desert generation plant by mid-summer.Although delayed more than two years, the project last week (May 3)gained its long-sought state approval for the plant from theCalifornia Energy Commission (CEC).

Merrill Lynch has been hired to serve as Avista Labs’ investmentbank and strategic adviser to evaluate the best ways to maximizethe shareholder value of its fuel cell technology. Avista Corp. ofSpokane, WA made the announcement yesterday, and said that MerrillLynch will “consider all possible options, including financialrestructuring and an initial public offering.” Avista Labs recentlyreceived a comprehensive patent securing the exclusive modulardesign of its PEM fuel cell system, a “plug and play” feature thatallows fuel cell cartridges to be easily removed and replacedwithout interrupting power. The Labs arm of Avista Corp. is a jointdevelopment agreement with UOP to integrate its fuel cell with thenatural gas and propane fuel processor systems of UOP. Later thisyear, field testing will begin for the integrated units of UOP.Currently, Avista Labs is testing its fuel cell subracks in severallocations across the country, including Arizona Public Service inPhoenix, the Fuel Cell Test and Evaluation Center in Johnstown,PA., Tyndall Air Force Base in Panama City, FL, and as back-uppower within the Avista Utilities service territory in the PacificNorthwest.

Citing “increasing soil and ambient temperature” that requires adecrease in its target linepack, NOVA is offering to sell up to190,000 gigajoules to customers. The pipeline will accept purchasetenders tied to a Canadian index through 1 p.m. MDT Thursday. Thegas will be sold through inventory transfers in approximately evenincrements over a period of up to 14 days starting around May 15,NOVA said. Call Jeff Stoffregen at (403) 541-4726 or Donna Taillonat -4802 for more information.

Friday trading completed a pattern of last week’s cash market,substantially mimicking the price movement during the precedingweek: strong at first, leveling off and then softening aroundmidweek, and capped off by a mild rebound for most weekend numbers.

FERC’s marketing affiliate rule, which hinges on the hope thatpipeline owners will police themselves, has been about as effectiveas a wolf guarding a henhouse, says a Washington D.C. lawyer whorepresents producers and independent marketers. Because ofescalating abuses in the market, he believes overhauling Order 497should be the first priority of the Commission in its post-Order637 dialogue with the natural gas industry.

Opening near its daily high and closing just off its low, themarket took on the trajectory of a safe pushed out a 10-storybuilding Friday, as traders pressured prices to their lowest levelsince April 12. The June contract was hardest hit late in thesession, when a wave of sell-stops exacerbated the price slide. Theprompt month closed down 8.2 cents at $3.025.