From http://www.enerfax.com :
 
CaliforniaWants to Renegotiate Power Contracts 
 
California's governor says he is working on proposals that could result in negotiations with power suppliers to reduce the cost of power being purchased by the state through long-term power purchase contracts signed earlier this year. However, none of the generators reportedly have heard anything concerning renegotiations of the deals. While the state would gain lower rates for power from any renegotiations, the advantage to the power providers is not certain, other than the avoidance of future legal or regulatory challenges to the contracts. The governor has come under intense criticism from critics charging that the contracts lock the state into prices that are way too high. The California PUC wants the FERC to force the generators to lower their prices. How FERC will act on the deals remains to be seen. Semprasigned a 10-year, 1,900-MW deal with the state in May that could be worth $7 billion. Semprabegan 250 MW deliveries this summer and expects increase output under the deal over the next several years as it brings new power online. The contract includes variable prices based on the cost of natural gas. With gas prices at about $2 per MMBtu, Semprais able to sell the state baseloadcapacity at $0.041 per kWh and peaking capacity at $0.051 per kWh. 
 
New Path 15 Power Line to Be Built 
 
PG&E and other power companies will build a new $300 million transmission line along Path 15, an 84-mile stretch of power lines in the central part of California. The outdated transmission lines in the area do not have enough capacity to carry electricity between the northern and southern parts of the state during peak demand periods. Expanding Path 15 to include a 3rd power line would boost transmission by about 1,500 MW. The project could be completed by summer 2004. Kinder Morgan, Williams, Trans-Elect, and the Western Area Power Administration are also involved in the project.
 
For more information, see the LA Times article at http://www.latimes.com/news/local/la-000083333oct19.story.
 
El Pasoand Iberdrolato Buy LNG from SnoehvitProject
 
The Snoehvitconsortium, led by NorwaysStatoilhas signed deals with El Pasoand Spanish Iberdrolato supply LNG from the Arcticfor 17-20 years. El Pasowill buy 2.4 Billion cubic meters of gas per year, while Iberdrolawill purchase 1.6 Bcmfor a total of $453.8 million per year. Snoehvitwill also sell volumes totaling 1.7 Bcmto partners Gazde France and TotalFinaElf. Snoehvit, estimated to hold 320 Bcmof gas will be developed as a subseatie-back to a LNG plant near the world's northernmost city Hammerfest. The LNG will be transported by specialized carriers to the USand Europe. In the US, the LNG will be sold at spot prices. Environmentalists oppose Snoehvit, the first development in the Arctic Barents Sea, because of potential ecological damage. The deals were signed under a condition that the Norwegian parliament approves the project. A new political party is set to take over Norwaysgovernment today and may postpone Snoehvitin order to make further environmental impact studies. Otherwise, construction is scheduled to begin by spring 2002 and be operational by autumn of 2006.
 
NOAA Winter Weather Forecast
 
Colder than average temperatures will prevail this winter in the Northeast, Upper Midwest, Great Lakesand Great Plainsstates, according to the National Oceanic and Atmospheric Administration. NOAA says that the absence of El Nino and La Nina could lead to heavy snow in the Midwestand along the East Coast. The forecast does not expect a repeat of the record-breaking cold temperatures of November and December of last year, but winter should still be colder than normal. The Pacific Northwesthad near-record dry conditions last winter that depleted hydropower severely, but will have more normal weather this year. Texas, Oklahoma, and the western parts of Arkansasand Louisianawill receive above average rain while Florida, Georgia, South Carolinaand the eastern part of North Carolinawill be dryer than usual. 
 
Deep Gas Conference in Houston
 
The Strategic Research Institute is holding a conference on deep gas technology on November 27-28 in Houston.  For more information, see the following website http://www.srinstitute.com/cr214.
 
Bob Brooks
GPCM Natural Gas Market Forecasting Systemhttp://gpcm.rbac.com