Message-ID: <24437203.1075863404238.JavaMail.evans@thyme> Date: Fri, 19 Oct 2001 10:52:42 -0700 (PDT) From: rebrooks@earthlink.net To: rebrooks@rbac.com Subject: GPCM News: 10/19/01: Cal to Renegotiate Power Deals?: New Path 15 Powerline: El Paso to Buy Arctic LNG: Colder Than Average Winter Predicted: Deep Gas Conference Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable X-From: "Robert E. Brooks" @ENRON X-To: 'GPCM Distribution' X-cc: X-bcc: X-Folder: \VKAMINS (Non-Privileged)\Kaminski, Vince J\Deleted Items X-Origin: Kaminski-V X-FileName: VKAMINS (Non-Privileged).pst =20 From http://www.enerfax.com : =20 CaliforniaWants to Renegotiate Power Contracts=20 =20 California's governor says he is working on proposals that could result in = negotiations with power suppliers to reduce the cost of power being purchas= ed by the state through long-term power purchase contracts signed earlier t= his year. However, none of the generators reportedly have heard anything co= ncerning renegotiations of the deals. While the state would gain lower rate= s for power from any renegotiations, the advantage to the power providers i= s not certain, other than the avoidance of future legal or regulatory chall= enges to the contracts. The governor has come under intense criticism from = critics charging that the contracts lock the state into prices that are way= too high. The California PUC wants the FERC to force the generators to low= er their prices. How FERC will act on the deals remains to be seen. Sempras= igned a 10-year, 1,900-MW deal with the state in May that could be worth $7= billion. Semprabegan 250 MW deliveries this summer and expects increase ou= tput under the deal over the next several years as it brings new power onli= ne. The contract includes variable prices based on the cost of natural gas.= With gas prices at about $2 per MMBtu, Semprais able to sell the state bas= eloadcapacity at $0.041 per kWh and peaking capacity at $0.051 per kWh.=20 =20 New Path 15 Power Line to Be Built=20 =20 PG&E and other power companies will build a new $300 million transmission l= ine along Path 15, an 84-mile stretch of power lines in the central part of= California. The outdated transmission lines in the area do not have enough= capacity to carry electricity between the northern and southern parts of t= he state during peak demand periods. Expanding Path 15 to include a 3rd pow= er line would boost transmission by about 1,500 MW. The project could be co= mpleted by summer 2004. Kinder Morgan, Williams, Trans-Elect, and the Weste= rn Area Power Administration are also involved in the project. =20 For more information, see the LA Times article at http://www.latimes.com/ne= ws/local/la-000083333oct19.story. =20 El Pasoand Iberdrolato Buy LNG from SnoehvitProject =20 The Snoehvitconsortium, led by NorwaysStatoilhas signed deals with El Pasoa= nd Spanish Iberdrolato supply LNG from the Arcticfor 17-20 years. El Pasowi= ll buy 2.4 Billion cubic meters of gas per year, while Iberdrolawill purcha= se 1.6 Bcmfor a total of $453.8 million per year. Snoehvitwill also sell vo= lumes totaling 1.7 Bcmto partners Gazde France and TotalFinaElf. Snoehvit, = estimated to hold 320 Bcmof gas will be developed as a subseatie-back to a = LNG plant near the world's northernmost city Hammerfest. The LNG will be tr= ansported by specialized carriers to the USand Europe. In the US, the LNG w= ill be sold at spot prices. Environmentalists oppose Snoehvit, the first de= velopment in the Arctic Barents Sea, because of potential ecological damage= . The deals were signed under a condition that the Norwegian parliament app= roves the project. A new political party is set to take over Norwaysgovernm= ent today and may postpone Snoehvitin order to make further environmental i= mpact studies. Otherwise, construction is scheduled to begin by spring 2002= and be operational by autumn of 2006. =20 NOAA Winter Weather Forecast =20 Colder than average temperatures will prevail this winter in the Northeast,= Upper Midwest, Great Lakesand Great Plainsstates, according to the Nationa= l Oceanic and Atmospheric Administration. NOAA says that the absence of El = Nino and La Nina could lead to heavy snow in the Midwestand along the East = Coast. The forecast does not expect a repeat of the record-breaking cold te= mperatures of November and December of last year, but winter should still b= e colder than normal. The Pacific Northwesthad near-record dry conditions l= ast winter that depleted hydropower severely, but will have more normal wea= ther this year. Texas, Oklahoma, and the western parts of Arkansasand Louis= ianawill receive above average rain while Florida, Georgia, South Carolinaa= nd the eastern part of North Carolinawill be dryer than usual.=20 =20 Deep Gas Conference in Houston =20 The Strategic Research Institute is holding a conference on deep gas techno= logy on November 27-28 in Houston. For more information, see the following= website http://www.srinstitute.com/cr214. =20 Bob Brooks GPCM Natural Gas Market Forecasting Systemhttp://gpcm.rbac.com=20 =20 =20