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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (6995)	8/24/2001 3:43:41 PM
From: Second_Titan	Read Replies (1) \| Respond to of 23153

Now, a Coalition of Western Utilities Says Prices for Power Are Too Low By ROBERT GAVIN and REBECCA SMITH Staff Reporters of THE WALL STREET JOURNAL A coalition of Western utilities -- including some that pushed successfully for price caps on wholesale electricity earlier this year -- now is complaining that prices have fallen too low. At least three utilities are requesting retail rate increases to cover power costs from earlier in the year, in part, because low wholesale prices mean they are no longer able to completely offset those costs with power-sale revenue. Prices have been falling for months, and dropped even further after June 19 when the Federal Energy Regulatory Commission imposed regionwide wholesale price limits. Early this week, 14 Western utilities asked FERC to reconsider its order, complaining now that a "one-size-fits-all" approach may help California, but hurt utilities in neighboring states. Under the FERC order, Western power generators may charge no more than $92 per megawatt hour, currently, for power sold into the California market and slightly less outside the Golden State, unless they can prove their generating costs are higher. Traders, including utilities that bought too much power, are held to the capped level no matter what their costs. But the caps are somewhat moot since energy currently is trading at far less on the open market. Power prices in February, according to Platt's Energy Trader, a daily publication of McGraw-Hill Cos., for two important Northwest pricing points ranged between $220 and $400 per megawatt hour. By Thursday, midday electricity for delivery at the same points was selling for $33 per megawatt hour. Portland General Electric bought power last winter for late-summer deliveries at $200 to $250 per megawatt hour, says Robin Tompkins, assistant general counsel. "Now we're having a hard time unwinding those positions." Portland General, a unit of Enron Corp. of Houston, is asking for a record 30% increase in residential rates, which would take the price to roughly eight cents per kilowatt hour from about six cents, and a 45% to 60% increase in commercial rates. That is because the Portland, Ore., utility only is able to supply half the power its customers need from its own power plants. For the rest, it must go to the open market and make purchases. When it resells power it doesn't need, it now is forced to do so at a loss, says Ms. Tompkins. That isn't at all what it expected during the time of year when prices typically reach their zenith. It puts further pressure on rates, she adds. The drop in prices back to the 1999 level is prompting rate increase requests from other utilities. In May, for example, Avista Corp., Spokane, Wash., agreed to defer rate increases needed to recover more than $100 million in unanticipated power-purchase costs. The idea was the utility, with 313,000 customers in Idaho and Washington, would recover those costs over the next two years by selling excess power once drought-stricken hydroelectric generating conditions improved and its new 270-megawatt natural-gas-fired plant came on line next year. But Avista now is seeking a 36.9% rate increase in Washington and 15% increase in Idaho because the utility no longer believes wholesale prices will be high enough to pay off earlier power-purchase costs. This week, Puget Sound Energy, a unit of Puget Energy Inc., Bellevue, Wash., asked Washington regulators to grant an 18% residential rate increase to recover some $84 million in power costs, saying falling power-sale revenues mean ratepayers have to pick up a bigger share of costs. Washington Public Counsel Simon Ffitch, who represents ratepayers in utility cases, says the rate increases "appear to be an effort to shift the risks of power-cost fluctuations to ratepayers from stockholders."

To: Raymond Duray who wrote (6995)	8/24/2001 4:08:46 PM
From: jim_p	Read Replies (1) \| Respond to of 23153

Ray, I heard it was one member from someone, but I forget who? NG hit 2.67 today and closed at 2.706, down another 3.74%. $1.80 is not that far away now. Jim