NGI The Weekly Gas Market Report

Billing them as “two new whistleblowers,” California political officials responded last week to heavy counterattacks in the news media by Duke Energy North America, which strongly argues it has done nothing wrong. The state politicians brought forth two additional former power plant workers who allege wrongdoing by Duke in the operation of a San Diego County generation plant.

The power is still off on Texas’ deregulation pilot, which was scheduled to finally begin last Friday after its June 1 ramp-up was shut down in late May (see NGI, May 28). Pilot customers now won’t have service from their new retail electric providers until at least July 20, and maybe even later, according to the Texas Public Utility Commission.

Pacific Gas and Electric Co. took two significant steps in its ongoing federal bankruptcy proceedings last week, while its holding company, PG&E Corp., was being targeted by the California Attorney General for federal investigation of possible misappropriations of funds between the parent company and the financially troubled utility.

American Electric Power and Mexican conglomerate Alfa S.A. de C.V. are selling off their jointly owned Enertek Cogeneration Facility located in the northern part of Mexico in Altamira, Tamaulipas to frequent Mexican investor Iberdrola of Madrid, Spain for an undisclosed amount. Iberdrola, which has announced plans to pump up its Mexican energy investments, closed the deal June 30.

Sen. Dianne Feinstein (D-CA) has called on FERC to initiate a new investigation into allegations that generators manipulated California power prices in the wake of a new General Accounting Office (GAO) report, which found the Commission’s initial probe to be faulty.

Citing recent events such as California’s generation shortages and a nationwide jump in natural gas prices, the Kentucky Public Service Commission (PSC) last week said that it would take a closer look at the adequacy of the Bluegrass State’s generation capacity and transmission system.

The expected roll-out of the Texas pilot deregulation program, originally scheduled for June 1, has been moved to mid-July so that the state’s grid operator, the Electric Reliability Council of Texas (ERCOT), can work out computer glitches. Retail competition begins across the state Jan. 1, 2002.

In yet another irony to the California energy foibles, while state officials are scrambling to expand natural gas transmission and storage capabilities in the state, one of Southern California Gas Co.’s most urban-based underground storage facilities is under siege from opponents of a massive coastal mixed-use residential/commercial development between Marina del Rey, CA, and a 50-year-old gas storage operation.

Producers suffered a major setback when the Bush administration, in a concession to Florida, announced last week that it will radically scale back plans to allow exploration and production activity in the oil- and natural gas-rich eastern Gulf of Mexico.