NGI All News Access

Short-term mitigation measures implemented by FERC in U.S. power markets have resulted in the elimination of price signals in certain parts of the country and have set in motion the “ultimate death spiral” by mitigating below the price of entry, Julie Simon, vice president for policy at the Electric Power Supply Association (EPSA), told a power industry conference last Thursday.

Allegheny Energy Inc.’s marketing and trading subsidiary is joining its peers and will drop speculative energy trading. Instead, the Allegheny Energy (AE) Supply will market its energy to the corporation’s “legacy assets,” a spokeswoman said Friday.

U.S. District Judge Melinda Harmon handed Arthur Andersen LLP the maximum sentence in Houston on Wednesday — five years probation and a $500,000 fine — for obstructing justice in its handling of Enron Corp.-related documents that stymied a federal investigation of the company’s finances. Although it seemed minuscule when compared to the substantial market damage caused by the Enron scandal, the punishment was the harshest allowed under law. Andersen attorneys said they would appeal.

While surplus capacity in the Midwest is likely to continue the trend of low wholesale power prices in the region for the next several years, those prices will likely see a sharp upward turn by 2007 as excess capacity starts to be worked off, a new report issued last Tuesday by Henwood concludes.

With investors and analysts questioning how the U.S. power and natural gas sector can ever recover its credit quality, Fitch Ratings published a special report on Thursday outlining its views and recommendations on the impact and usefulness of mark-to-market (MTM) accounting, as well as how it uses supplemental disclosures on risk management activities, contingent claims and off-balance sheet obligations.

What a difference a year makes. As if anyone wanted to be reminded, it was Oct. 16, 2001 when Enron Corp. released its third-quarter earnings, boasting of continued growth, despite a billion-dollar write-off. Within weeks, that incidental write-off that was barely discussed during a conference call with analysts by then-CEO Ken Lay, eventually would erase the entire company (see NGI, Oct. 22, 2001). Fast forward to one year later, and despite its disappearance, Enron’s once mighty shadow continues to darken the marketplace.

Officials overseeing Mexico’s multiple-service contract (MSC) project took comments from the government, outside consultants and potential contractors before agreeing to move their first natural gas contract bidding dates to February instead of December. The extra time, they said, will be used by Petroleos Mexicanos (Pemex) to add new public works laws into the contracts, as well as give bidders the opportunity to include possible exploration and development costs in next year’s budgets.

The Federal Energy Regulatory Commission has awarded certificates to Gulf South Pipeline Co. LP to expand lateral facilities to accommodate the growing demand for natural gas in Florida, and to Northwest Pipeline to relocate and replace pipeline facilities to make way for the construction of a planned dam in Colorado.

Washington, DC-based WGL Holdings, Inc. said last week that its Washington Gas Light Co. subsidiary has received a payment of $14.8 million from a weather insurance policy purchased to reduce the impact of warm weather on financial results. The utility, which serves more than 930,000 customers throughout Washington, DC, said it generates the majority of its revenues and profits from the delivery of gas during the winter heating season and is the beneficiary under the policy.