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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (14485)	6/15/2000 5:12:00 PM
From: Justa Werkenstiff	Read Replies (1) \| Respond to of 15132

Natural Gas Surges as Hot West Coast Weather Boosts Demand New York, June 15 (Bloomberg) -- Natural gas surged 5 percent to a 3 1/2-year high on expectations that record heat in the western U.S. will spur utilities to burn more fuel to generate power for air conditioning. Temperatures soared today in the West after readings yesterday reached a record 103 degrees in San Francisco, the Weather Channel said. High temperatures force utilities to increase the use of gas-fired power plants to produce electricity as demand and rates soar. ``Power prices have gone bonkers in the last two trading sessions,'' said Mark Easterbrook, an analyst at Dain Rauscher Wessels in Dallas. ``There is a lot of natural gas generation'' on the West Coast. Natural gas for July delivery rose 20.7 cents, or 4.9 percent, to $4.463 per million British thermal units on the New York Mercantile Exchange, the highest closing price since Dec. 20, 1996. Prices have almost doubled this year. Electricity prices surged more than 10-fold in some areas yesterday, topping $600 a megawatt-hour in northern California. PG&E Corp.'s Pacific Gas & Electric Co., the state's largest utility, cut power to some customers. ``The rolling brown-out yesterday highlights supply problems,'' said Curtis A. Hildebrand, vice president for project development at Calpine Corp., a San Jose, California-based power plant builder and operator. ``We have not had a major new plant in the (San Francisco) Bay area since 1972.'' Natural gas now provides 31 percent of the electricity consumed in California, according to the California Energy Commission in Sacramento. New Plants Needed Calpine aims to meet rising demand in California by ``very aggressively developing natural gas plants,'' Hildebrand said. ``About 100 percent of our new plants are gas fired.'' Air conditioners also will be running more often next week in most of the Midwest and Northeast, as above-normal temperatures were predicted in the National Weather Service's six-to-10-day forecast released yesterday. Higher temperatures in the Midwest, the biggest gas-consuming region in the U.S., could help keep prices high, even as temperatures in California are forecast to decline this weekend. Gas supplies normally rise this time of year as utilities prepare for the cold-weather months, when demand peaks. U.S. inventories rose 78 billion cubic feet, or 5.8 percent, last week, the American Gas Association said yesterday. The increase was below the average of 86 billion injected in the same week over the past five years. Supplies were down 23 percent from a year earlier. Inventories rose 63 billion cubic feet a year earlier. Last week was only the second time this year that inventories posted a bigger gain than in the same week last year. ``The two determinates of natural gas prices are weather and storage and they are bullish,'' Easterbrook said. ``Injections were a little bit above expectations but year to date, we are well below the norm.'' Jun/15/2000 16:42 ET