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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: stevedhu who wrote (82612)	12/26/2000 1:52:48 AM
From: Douglas V. Fant	Read Replies (1) \| Respond to of 95453

Steve, Some really dumb moves by California-based companies have exacerbated California's energy situation too. It's not just bad planning and restrictive policies by California's Governmental entities. Southern California Edison pulled what I would call the "Bonehead Move of the Year" about 90 days ago. SCE possessed FTR's (Firm Transportation Rights) for up to 140mmcf natural gas/day on either the El Paso or Transwestern Interstate Pipelines for the period September to April for the next few years. Those two pipelines are the major east/west pipelines which move natural gas from west Texas to the West Coast. Now I have no idea what SCE was thinking- All I can surmise is that some internal audit showed this "underutilized" asset being carried on their books, and ordered their transportation division to get rid of it since SCE only needed its FTR's during peak summer generating season May-September, right?....Which they did....They sold the FTR's in September. Reliant jumped on those FTR's like a duck on a june bug when they were posted for sale. Well of course NG prices took off just one month later in October and the value of these FTR's skyrocketed too. I learned that Reliant paid off the entire cost of the transaction- with one month's revenues. Every dollar coming into Reliant from resale of these FTR's now is pure gravy, that could have, should have gone into SCE's pocket, thereby reducing their electrical rates.. I do not know if the California-based companies are panicking under the pressure, suffering from poor leadershp, maybe a bit of both, or something else... But gosh, the California Leadership needs to call an assembly and hammer out some short-and long-term energy plans or else they are going to continue to suffer from haphazard energy-related decisions like the one above, and drive industry away from their State...