http://biz.yahoo.com/rf/010206/n06250136.html

Tuesday February 6, 9:09 pm Eastern Time

PG&E faces 10 pct cut in natgas deliveries from Wed.

SAN FRANCISCO, Feb 6 (Reuters) - Pacific Gas and Electric Co. (NYSE:PCG - news) warned on Tuesday that the expiration at midnight of a federal order to sell natural gas to the troubled utility will cut off 10 percent of its supplies.

``We've received confirmation from two of our suppliers, one our single largest supplier, that they will stop delivery at midnight tonight,'' a spokesman for the San Francisco-based PG&E Corp. (NYSE:PCG - news) unit said.

He said the suppliers, J. Aron & Co., the commodities division of Goldman Sachs (NYSE:GS - news), and Denver-based Western Gas Resources (NYSE:WGR - news), were requesting payment in advance for their gas for fear of non-payment by the financially strapped utility.

J. Aron is the single largest gas supplier to PG&E, accounting for about 9 percent of the utility's daily gas needs, while WGR comprises less than 1 percent.

A federal order renewed two weeks ago by the Bush administration requiring gas and power companies to continue to supply California expires at midnight Tuesday.

The administration reiterated on Tuesday it will not extend either order, initially signed in January by the outgoing Clinton Administration.

Last week, the California Public Utilities Commission (CPUC) approved a plan allowing Pacific Gas and Electric -- which has amassed more than $7 billion in wholesale power costs it has not been able to recoup due to the state's retail price cap -- to use its customers' gas bills as collateral to assure gas suppliers they will get paid for shipping to the utility.

Despite that assurance, the two suppliers said they would stop shipments Tuesday night, the spokesman said.

As a result, PG&E will have to increase its use of gas storage reserves to meet the daily gas needs of its 3.8 million gas customers in northern and central California, the spokesman said, adding those supplies could be depleted in about a week.

The spokesman said five other gas suppliers have confirmed they will continue selling gas to the utility after the federal order expires, while 20 to 25 other suppliers have not yet indicated what their plans are.

PG&E has over the past two weeks secured additional gas from some of its usual suppliers in the day-ahead spot market to meet its daily demands but not enough to boost what it has in storage.

The utility has warned it might not be able to meet all of its customers' needs if its deliveries are not increased.

California is in the midst of an energy crisis marked by soaring prices for wholesale electricity and gas, strong demand for power to support a growing economy and population, and tight supplies of electricity caused by a lack of generating capacity.

-- (in@energy.news), February 07, 2001

Answers

http://biz.yahoo.com/rf/010206/n06201190.html

Tuesday February 6, 8:46 pm Eastern Time

Western Gas sues PG&E for natural gas payments

DENVER, Feb 6 (Reuters) - Western Gas Resources Inc. (NYSE:WGR - news), a Colorado natural gas supplier, on Tuesday sued California utility Pacific Gas & Electric Co. (NYSE:PCG - news), alleging it failed to pay for deliveries made in January.

California is in the midst of a power emergency, with its utilities scrambling to furnish residents' rising demands for power.

Some suppliers to the utilities have said they have not been paid by the utilities and others, fearing they will not be paid, have demanded cash payments up front.

In its lawsuit filed in federal district court in Denver, Western Gas said it wanted to be paid for natural gas delivered between Jan. 9 and Jan. 12 at the contract price of $81,550 per day and for damages it incurred when it delivered natural gas between Jan. 13 and Jan. 31 for ``the difference between contract value and market value discounted.''

The company did not specify a dollar figure for its estimated losses.

On Jan. 19 Western Gas, like other companies, was ordered by the U.S. energy secretary to supply gas to PG&E from that date to Feb. 6, when the order expires.

``Western Gas complied with the mandate, under protest, and supplied gas to PG&E, but has not received payment from PG&E for that gas,'' the lawsuit charged.

A PG&E spokeswoman said ordinarily the utility pays its natural gas supplies on the 25th of the month and it intended on Feb. 25 to make its January payments.

-- (in@energy.news), February 07, 2001.

Court orders supplier to keep power on

February 6, 2001 Web posted at: 9:40 PM EST (0240 GMT)

SACRAMENTO, California (AP) -- A U.S. judge Tuesday temporarily ordered an electricity supplier to continue selling power to the state, effectively extending an emergency federal directive. Two other suppliers agreed they would continue sales as well.

U.S. District Judge Frank Damrell, citing the possibility of "obvious irreparable harm to the public," said Tuesday his temporary order requires Reliant Energy Services Inc. to continue sales at least until a further hearing on Wednesday.

Wholesalers AES Pacific Inc. and Dynegy Power Corp., not covered under the temporary injunction, said they would continue sales until that hearing as well.

The suppliers provide enough electricity to serve 4 million homes. Electricity grid officials said losing that source could have produced rolling blackouts like the ones that hit the state twice last month.

The Independent System Operator, which maintains the state's power grid, sought the restraining order on an emergency basis as the federal directive neared its midnight PST Tuesday expiration.

President Bush had said his administration would not renew the orders, which were first issued by the Clinton administration and were extended by Spencer Abraham, Bush's energy secretary.

Reliant filed a lawsuit against the system operator last week after receiving a letter it sent to 140 power generators asking them to agree to continue selling power after the expiration. The Houston-based company said it should not have to bear the cost of California's energy crisis.

Reliant representatives did not immediately return calls for comment Tuesday.

Gov. Gray Davis' administration is spending $40 million to $50 million a day to buy power for energy-strapped parts of the state while lawmakers try to reach a long-term solution to the crisis.

The state is buying power for the utilities because energy producers have refused to sell to them directly, fearing they won't be paid.

Davis said Tuesday the state Department of Water Resources has reached its first agreement on long-term electricity contracts, expected to provide cheaper power to Southern California Edison and Pacific Gas and Electric Co. customers than the day-to-day buys.

The contracts provide enough power for about 5 million homes and range from three years to a decade, water resources power adviser David Freeman said.

He did not disclose the purchase price or the suppliers. Legislation signed by the governor last week lets the state spend an estimated $10 billion on the power buys.

PG&E and SoCal Edison say they have suffered $12.7 billion in losses from spiraling wholesale electricity costs. They have been unable to pass on their costs to customers because of the state's 1996 deregulation law.

They hope a federal court judge at a hearing Monday will grant SoCal Edison's request to raise rates and pass costs to customers. PG&E has also filed a suit seeking to raise rates.

Lawmakers opposed to rate hikes hope to devise a utility bailout plan before the Monday hearing.

-- (new@update.now), February 07, 2001.

Have any updates on California's natural gas situation, (new@update.now)?

-- (in@energy.news), February 07, 2001.

Yes (in@energy.news), I have an update on that too.

Natural gas supply will continue to be reduced to California and prices will skyrocket until the people start yelling and screaming to finally let the greedy bastards come in and tear up the wilderness in search of more gas. Most of Alaska will be destroyed in the near future as well.

-- (new@update.now), February 07, 2001.

I was referring to whether natural gas suppliers will keep doing business with the two nearly bankrupt California utilities.

-- (in@energy.news), February 07, 2001.

dumbshit wrote: "Natural gas supply will continue to be reduced to California and prices will skyrocket until the people start yelling and screaming to finally let the greedy bastards come in and tear up the wilderness in search of more gas. Most of Alaska will be destroyed in the near future as well."

Dumbshit's solution: force suppliers by government nazi fiat to supply gas at pennies-to-the-dollar so other dumbshit californians can continue to live in their haze of gluttony

-- hahahaha (haha@haha.org), February 07, 2001.

Hahaha is right ya freaking MORON.

Go research what the day-to-day auction scheme is doing. See if you can detect a scam. See if the Bush Administration's hands-off dribble makes any sense once ya understand what these rigged auctions are all about. This btw is the MAIN problem affecting the well-meaning deregulation and people working their fannys off to resolve and improve the current situation, even if Dunbo spews they will let California sink into the Pacific.

Please MEMES do some research, try the Clai ISO, PX or even the head of all this the FERC. Ya ya its all funny, hahaha.

-- Doc Paulie (fannybubbles@usa.net), February 07, 2001.

Doc Paulie,

If the auctions are rigged, as you say, then why wouldn't the two utilities that are losing billions of dollars file a lawsuit for relief?

MEMES, indeed.

-- J (Y2J@home.comm), February 07, 2001.

In 1970 when natural gas prices plummeted and gas companies went bankrupt, hundreds of gas wells were capped. I would imagine those natural gas wells will be uncapped before too long.

-- noenergy (noenergy@pooped.poop), February 07, 2001.

Here's an excellent site for "natural gas" info. You have to subscribe and you get 4 weeks for free.

http://intelligencepress.com/

-- noenergy (noenergy@pooped.poop), February 07, 2001.

They have J. Here please give this a read.

-- Doc Paulie (fannybubbles@usa.net), February 08, 2001.