With microgrids in place, doomsday preppers wouldn't need to worry so much about a zombie plague.
Key to the Citygate
Have gas prices fallen victim to speculation?
competitive or just plain dysfunctional. In one case, the state of California and others are fighting for rehearing of FERC orders on how to allocate constrained delivery capacity at the Topock citygate interface between Southern California Gas and the El Paso pipeline. That's the most desirable delivery point-where the least-expensive Southwestern gas enters the highest-priced Southwestern market. (.)
El Paso Merchant says it didn't "oversell" the Topock delivery point or allocate Topock rights improperly. Instead, it says the SoCal Topock delivery point was only "over-nominated."
In the other case, the state of California filed suit against El Paso Natural Gas Co., alleging that the pipeline improperly awarded rights to some 1.2 Mcf per day of firm pipeline capacity to its own marketing affiliates, El Paso Merchant Energy-Gas L.P. and El Paso Merchant Energy Co. (EPMEC), which allowed them to hoard pipeline capacity to drive up the price of gas pipeline capacity.
On Dec. 7, the PUC urged the FERC to ignore all the infighting over confidentiality of data and just cut to the chase. It claimed that the skewed market in late November and early December had driven up basis differentials between upstream injection points and the SoCal citygate-so high that the value of EPMEC's pipeline capacity rights had risen by "almost 300 percent." The PUC says that value is "7,000 percent higher" than El Paso's firm filed transportation rate, based on a 100 percent load factor. This has happened, says the PUC, during a time that the San Juan Basin spot wholesale gas commodity price rose only from $3.585 to $9.150. ()
Nevertheless, EPMEC denies accusations by the PUC that it hoarded capacity to drive up basis differentials. Instead, El Paso Merchant argues that it had no incentive to withhold gas pipeline rights off the market, since in reality the company had chosen the wrong side of the market in its hedging strategy. According to the company, as explained in a Nov. 3 pleading, it took a short position on basis spread during the period in question, so that it could not profit by speculating on capacity rights:
"EPMEC's financial transactions reversed the position EPMEC was in when it first acquired the El Paso capacity. [We] became short the basis spread between the San Juan Basin and the California border. É [We] thus had an incentive to flow as much gas as possible to offset [our] financial trading losses from [our] hedging activities, and hoarding capacity would have been financially detrimental."
NOW IMAGINE TRYING TO SET A PRICE CAP FOR ELECTRICITY THAT REFLECTS THE "TRUE" COST OF POWER, INCLUDING GAS. As of Dec. 7, San Diego Gas & Electric was calling for a price cap on natural gas, set at 150 percent of the bundled sum of the commodity rate and the as-billed pipeline rate. And if you want more proof, take a look at the wonderful-yet-flawed analysis by Jan Schori, general manager and CEO of the Sacramento Municipal Utility District, and James A. Tracy, SMUD's director of business, planning and budget.
In papers filed at the FERC late last year,