NGI The Weekly Gas Market Report

California doesn’t have the patent on an overburdened natural gas pipeline infrastructure. The problems facing neighboring Arizona are equally, if not more, critical, state regulators contend.

Looking to establish a foothold in the PJM market, NRG Energy last Monday announced that it has acquired 1,081 MW of baseload electric generating plants from Delmarva Power and Light, a subsidiary of Conectiv. As part of the agreement, NRG entered into both short- and long-term purchase power contracts with Delmarva Power to provide energy and capacity for the Delmarva Peninsula.

Westcoast CEO Michael Phelps said last week the company is planning to double the capacity of the Maritimes & Northeast Pipeline system to transport more than 1.2 Bcf/d in five years but expects an additional expansion to 2 Bcf/d by the end of the decade.

Houston-based Cabot Oil & Gas Corp. doubled its Gulf Coast proved reserve base Thursday, agreeing to a $230 million cash and stock merger with Cody Co., the parent of Cody Energy LLC. All of Denver-based Cody’s reserves are in Texas and Louisiana and will add 116 Bcfe to Cabot’s proved reserves, of which 58% will be natural gas, and 50 MMcfe/d of equivalent production, with 84% in natural gas.

Jumping into the rush to expand the Rocky Mountain region’s natural gas infrastructure, Duke Energy Field Services (DEFS) and BP America Inc. have signed a 12-year agreement to expand gathering and processing infrastructure and services to accommodate BP’s Greater Green River Basin drilling program in Wamsutter, WY.

Even with more federal regulatory intervention and a return to closer-to-normal hydroelectric supplies in the future, California is facing at least two more years of electricity supply-demand imbalance and the prospect for higher wholesale power prices as a result, according to Andre Meade, utility analyst at Commerzbank Securities.

SCANA’s South Carolina Pipeline Corp. (SCPC) is fundamentally changing the way it does business in an effort to better market its pipeline capacity and expand its service territory. The company announced plans last week to voluntarily open its pipeline system to transportation-only service and discontinue gas sales service. It intends to file an application for the switch with the Public Service Commission of South Carolina (SCPSC) next month.

The Public Utilities Commission of Ohio (PUCO) last week issued for comment staff-proposed new rules for competitive retail natural gas service and providers of the service. As a result of amended Ohio Substitute House Bill 9, which was signed into law by Gov. Bob Taft in March, the commission’s authority over gas providers in the state has been significantly expanded (see NGI, May 21).

The Federal Energy Regulatory Commission by a 5-0 vote last Monday extended its power market mitigation program across the western states 24 hours a day, seven days a week through September, 2002, with a two-part cost-based formula addressing spot prices during emergency and non-emergency periods (EL00-95-031). The new mitigation program went into effect June 20.