NGI The Weekly Gas Market Report

A threatened shut-in of 250 MMcf/d or more of deep-water gasproduction connected to Southern Natural Gas Co.’s system wasaverted — at least temporarily — as the owners of keyprocessing facilities in Louisiana last Thursday re-started some oftheir operations to satisfy the long-line pipeline, which claimedthe production fell short of its specifications for delivery. Theproducers, however, said their gas more than met Southern Natural’squality specs, and that they were being unfairly held to a higherstandard than other shippers on the pipeline’s system.

Governors of nine western states announced last week an emergency energy conservation strategy to avert a California-type energy crisis and to mitigate future higher energy prices.

FERC Chairman James J. Hoecker announced last week during theCommission’s regular meeting that he will step down on Thursday(Jan. 18), ending his three-year-plus stint as chairman and morethan seven years on the panel. Before those words were evenuttered, the White House notified Commissioner William Massey thathe would take the baton from Hoecker beginning Jan. 19.

The California Public Utilities Commission (CPUC) thinks DynegyPower Marketing Inc. doth protest too much.

After halting its fourth quarter dividend and requestingemergency help from the state for gas purchases last week, PacificGas & Electric Co. revealed that it also will lay off 325employees immediately and another 675 over the next several monthsto save $180 million.

FERC last week ordered El Paso Merchant Energy and El PasoMerchant Energy-Gas L.P. to stop stonewalling and turn overprotected materials to parties involved in a complaint case thatalleges the affiliates received preferential treatment when theyacquired 1.2 Bcf/d of California-bound firm capacity on El PasoNatural Gas.

Sen. Dianne Feinstein (D-CA) is preparing legislation that wouldcall for a price cap to be imposed on wholesale electricitytransactions in the western region during emergency situations, anaide to the senator said.

Later this month, a Nebraska district court will hear arguments from Kinder Morgan subsidiary KN Energy, which has charged several municipalities in the western part of the state with attempting to regulate the gas company’s rates by requiring it to pay into a state loan fund, and when it refused to pay the charge, enacting ordinances to not allow a surcharge on gas purchases.

As soaring December bills for natural gas use hit the home frontin Illinois last week, city and state officials opened a broadinvestigation into the causes of skyrocketing prices and madeattempts to increase assistance to low-income households.