NGI The Weekly Gas Market Report

Seeking to flesh out several key points of a sweeping market monitoring and mitigation plan for California’s ailing energy markets, FERC recently said that it expects California’s Independent System Operator (Cal-ISO) to ensure the presence of a creditworthy buyer for all transactions made with any generator that offers power in compliance with a must-offer requirement included in the monitoring and mitigation plan.

As the debate over President Bush’s energy plan continues to unfold, ways in which to bolster the nation’s sagging power transmission infrastructure are getting increased scrutiny. The White House energy blueprint has helped to bring the issue front and center by proposing to give the Federal Energy Regulatory Commission (FERC) eminent domain authority over transmission siting.

Divisions emerged last Wednesday at the Federal Energy Regulatory Commission over whether tools used by the Commission in analyzing market power issues are antiquated and in need of an overhaul or are sufficient. Commissioner William Massey believes FERC should initiate a generic inquiry into improving those standards, while Chairman Curt Hebert and Commissioner Linda Breathitt see the regulatory agency’s current approach as more than adequate to meet market power issues.

Positioning itself to become a major regional energy player, DTE Energy last Thursday announced the closing of its approximately $3.9 billion merger with MCN Energy Group. The completion of the merger finishes a process that kicked off in October 1999 (see NGI, October 11, 1999).

Sen. Dianne Feinstein (D-CA) has asked the Senate Committee on Governmental Affairs to investigate the possibility of an improper relationship between the energy industry and the Federal Energy Regulatory Commission based on an exchange between FERC Chairman Curtis Hebert and Enron Chairman Ken Lay as reported recently in The New York Times.

Sens. Joseph Lieberman (D-CT) and James Jeffords (I-VT) last week called on EPA Administrator Christine Todd Whitman to resist pressure to delay implementation of air pollution controls required by the Clean Air Act.

Customer choice and so-called direct access retail power deals between end-use customers and supplier/marketers may be an ultimate casualty of California’s year-old energy wars. State energy regulators indicated last week they are divided over the issue along political lines.

The Ohio Power Siting Board (OPSB) recently approved construction of two new gas-fired electric generation facilities within the state in an effort to keep ahead of the region’s growing demand. The projects include an enormous 2,700 MW plant in Summit County and a 704 MW facility in Sandusky County.

After years of planning and regulatory hurdles, PG&E Corp.’s National Energy Group (PG&E NEG) began construction last week on the Harquahala Generating Plant, a 1,048 MW natural gas-fired generating facility located approximately 70 miles west of Phoenix in the town of Tonopah, AZ (see NGI, Aug. 21, 2000).