www.platts.
com
Energy Trader
Goldman slices gas price forecast for 2010, 2011,
citing continued ‘revolution’ in shale gas production
Goldman Sachs on Friday sliced its US gas price forecasts for this year
and next, citing a continued rush of shale gas production.
The investment bank cut its NYMEX price outlook 17% for the sec-
ond half of 2010, to $4.63/MMBtu from $5.60/MMBtu, and its 2011 esti-
mate by about 12%, to $5.25/MMBtu from $6/MMBtu.
“US natural gas production continues to surge this year, driven by
the shale gas revolution,” Goldman said, noting that output has thus
far exceeded its 2010 forecast of by around 3 Bcf/d to 58.5 Bcf/d — put-
ting downward pressure on prices. “Although its impact on the supply-
demand balance has been somewhat obscured by the extreme move-
ments in weather and the tightening shifts motivated by lower prices, US
natural gas production growth has been impressive so far this year.”
The bank also raised its 2011 production forecast by 3.7 Bcf/d to
(continued on page 13)
Judge halts civil trial in credit default case involving
Tower Research affiliate activity in PJM FTR market
The judge in a jury trial involving the PJM Interconnection and
Tower Research companies halted proceedings two days after they began
last week, a PJM spokeswoman confirmed Friday.
The court on Friday made public an order by the judge saying that
the case was being placed on administrative suspension pending further
order of the court but did not detail how long the suspension would last.
The judge’s office declined to comment on the temporary trial sus-
pension, while PJM’s spokeswoman Paula DuPont-Kidd would only con-
firm that proceedings in the trial are currently suspended, as of Thursday.
The two companies are “in discussions” and the suspension could last
for up to 45 days, according to a source familiar with the matter who asked
not to be named. The case involves credit defaults in the PJM market.
Opening arguments in the trial were presented Tuesday after over two
years of paper litigation in different courts. The lawsuits were finally con-
solidated at the US District Court for the Eastern District of Pennsylvania
(continued on page 14)
Key indicators
National $64.24 National $54.23 NYMEX
Daily Forward Aug
Power Down Power NC Gas
Index $3.39 Assessment Contract
Platts national daily power index is the average of daily indexes for regionally significant power markets. The national forward power index is the average of the daily
prompt-month assessments at the same hubs. For a full description of price methodology, click here. The indices are based on wholesale prices collected by Platts in
eleven key regional markets that are among the most liquid in the U.S. -- the Northeast (New England, New York); the Mid-Atlantic (PJM West); the Midwest (Cinergy
Hub, Into ComEd); the South and South Central (Into TVA, Into Entergy, and ERCOT); and the West (Mid-Columbia, California, and Palo Verde). The national daily gas
index is a weighted volume average for all United States price points. For more information on price methodology, see page 9.
The McGraw-Hill Companies
Monday, July 19, 2010
National Commentary
NYMEX shaves off 6.7 cents after big rally;
cash continues higher; power mixed to lower
The August NYMEX gas futures contract lost 6.7 cents
Friday to settle at $4.519/MMBtu as traders booked
profits from Thursday’s run-up. The contract opened at
$4.614/MMBtu and traded between a high of $4.659/
MMBtu and a low of $4.472/MMBtu.
Citi Futures Perspective analyst Tim Evans said that
while the contract gave up some of Thursday’s gains, the
move did not signal a significant shift in the market’s overall
tenor. “I think we saw some profit-taking and book-squaring
ahead of the weekend and maybe a little bit of selling tied
to the broader economic worries, given the drop in the equi-
ties market and the consumer sentiment numbers,” he said.
But the contract continues to get support from forecasts
for above-normal temperatures across key gas-consuming
regions and the height of the hurricane season is yet to
come, Evans added. “We know the distribution of storms and
historically we have fewer storms in June and July - it is not
that busy a period. But as we move into August, the condi-
tions are more favorable for storm development.”
Cash prices rose again in most regions on lingering
heat and Thursday’s NYMEX rally.
With expectations for cooler weather, East power
dailies turned lower; forwards were mostly lower as well.
Central power were mixed, with Midwest prices losing
steam but South Central prices rising; forwards were mixed
to lower. West power dailies were mixed, with those in the
Southwest easing; forwards sat still.
Key daily power and gas indexes
Hub/Delivery point Index Change
Power ($/MWh)
PJM West 93.25 -12.50
Cinergy Hub 58.50 -2.25
Palo Verde 50.64 -1.56
Gas ($/MMBtu)
Transco zone 6 N.Y. 5.125 0.145
Chicago city-gates 4.630 0.215
SoCal Gas 4.350 0.175
$4.519 National $4.50
Daily
Down Gas Up
6.7 cents Index 18 cents
 Energy Trader
East Power Markets
Dailies retreat; forwards mostly lower
With expectations for cooler weather in much of the region,
power prices for Monday delivery in the East turned lower
Friday; forwards were mostly lower as the August NYMEX gas
futures contract lost 6.7 cents to settle at $4.519/MMBtu.
Northeast daily markets stumbled amid cooler weather fore-
casts and falling projections for peak load today. New York City
was forecast to hit 90 degrees today after a weekend expected
to reach highs in the mid-90s. Albany and Rochester were
expected to stay in the 80s Saturday through today. Spot natural
gas at Transco zone 6 New York traded around $5.14/MMBtu on
IntercontinentalExchange, up 16 cents from the Platts for-Friday
index. The New York ISO projected peak load at 28,850 MW
today, down 3% from Friday. New York Zone-A day-ahead peak
packages were bid at $62 and offered at $65/MWh, compared
with the Platts index of $72/MWh. Bal-week was bid at $63 and
offered at $65/MWh. Next-week was bid at $61.50 and offered
at $63.25/MWh, compared with deals around $64.25/MWh seen
Thursday on ICE.
New York Zone-G day-ahead peak was bid at $93.50 and
offered at $102.50/MWh, compared with the Platts index of
$108/MWh. Bal-week traded around $92/MWh. Next-week was
bid at $83.25 and offered at $94/MWh, compared with deals
around $94/MWh seen Thursday on ICE. In New England, spot
gas at Tennessee Zone 6 delivered traded around $5.17/MMBtu
on ICE, up about 18 cents from the Platts index. Boston was
expecting high temperatures in the 90s over the weekend before
dropping into the upper 80s today. The ISO New England fore-
cast peak load at 23,550 MW on Monday, down about 4% from
Friday.
Mass Hub day-ahead peak packages traded around $90.25/MWh
on ICE, off $9.25 from the for-Friday index. Off-peak was bid at $37
and offered at $38.75/MWh, compared with the index of $44/MWh.
Weekend peak traded around $62.75/MWh, while off-peak traded
around $38.75/MWh, down from prices seen Thursday on ICE.
Mass Hub bal-week traded around $84.75/MWh. Next-week traded
around $79.75/MWh, compared with deals around $90/MWh seen
Thursday on ICE.
Northeast terms dropped slightly in reaction to lower
NYMEX gas futures. On ICE, power trading volume increased
for the Mass Hub and New York Zone-A compared with previ-
ous days. Mass Hub August was down $1 to $67.25/MWh and
September dropped 50 cents to $50/MWh. New York Zone-G
August added 25 cents to $75.25/MWh and the same contract
for Zone-A was down $1 to $53/MWh.
Mid-Atlantic dailies fell as temperatures are expected to
creep down over the weekend and today. Weather outlooks
called for highs in the 80s and 90s today. Meanwhile, spot
gas at Texas Eastern climbed about 20 cents, trading around
$5.10/MMBtu on ICE. West Hub day-ahead lost about $12,
2 Copyright © 2010 The McGraw-Hill Companies
Monday, July 19, 2010
Day-ahead markets for delivery Jul 19 ($/MWh)
East Index Change Range Deals Volume Avg $/Mo
On-Peak
Mass Hub 91.00 -8.50 91.00-91.00 N.A. N.A. 84.83
N.Y. Zone-G 99.50 -8.50 99.50-99.50 N.A. N.A. 89.52
N.Y. Zone-J 107.50 -8.50 107.50-107.50 N.A. N.A. 102.00
N.Y. Zone-A 64.00 -8.00 64.00-64.00 N.A. N.A. 63.25
Ontario* 53.25 -14.25 53.25-53.25 N.A. N.A. 56.60
PJM West 93.25 -12.50 93.25-93.25 N.A. N.A. 84.21
Dominion Hub 84.25 -27.25 84.25-84.25 N.A. N.A. 81.15
VACAR 54.50 0.25 54.50-54.50 N.A. N.A. 49.60
Southern, into 55.23 0.23 54.00-57.00 8 650 50.13
Florida 86.75 0.25 86.75-86.75 N.A. N.A. 77.10
TVA, into 60.00 2.75 60.00-60.00 N.A. N.A. 52.46
Off-Peak
Mass Hub 39.50 -4.50 39.50-39.50 N.A. N.A. 41.19
N.Y. Zone-G 46.00 -2.00 46.00-46.00 N.A. N.A. 44.90
N.Y. Zone-J 50.75 0.25 50.75-50.75 N.A. N.A. 48.52
N.Y. Zone-A 40.25 -2.00 40.25-40.25 N.A. N.A. 39.52
Ontario* 37.50 -0.75 37.50-37.50 N.A. N.A. 33.35
PJM West 40.50 -1.00 40.50-40.50 N.A. N.A. 38.19
Dominion Hub 44.00 -1.50 44.00-44.00 N.A. N.A. 42.35
VACAR 29.50 -1.00 29.50-29.50 N.A. N.A. 28.04
Southern, into 29.00 -1.00 29.00-29.00 N.A. N.A. 27.56
Florida 37.00 -1.00 37.00-37.00 N.A. N.A. 35.52
TVA, into 30.50 1.00 30.50-30.50 N.A. N.A. 27.23
*Ontario prices are in Canadian dollars
Near-term markets ($/MWh)
Contract Transacted Range
PJM West
Bal-week 07/14 94.00-94.50
Bal-week 07/13 99.25-101.00
Bal-week 07/12 84.25-87.00
Bal-month 07/12 82.00-82.50
Next-week 07/16 81.75-83.50
Next-week 07/15 89.25-89.75
Next-week 07/14 83.50-84.75
Next-week 07/12 82.00-83.00
Southern, Into
Bal-week 07/12 52.25-52.75
Next-week 07/14 52.75-53.25
*Ontario prices are in Canadian dollars
Generation unit outage report
Plant/Operator Cap Fuel State Status Return Shut
BruceB-6/Bruce Power 872 n Ont. PMO Unk. 05/14/10
Crystal River-3/Progress 838 n Fla. RF Unk. 09/26/09
North Anna-1/Dominion 925 n Va. MO Unk. 07/14/10
PickeringA-1/OPG 525 n Ont. PMO Unk. 04/12/10
Robinson-2/Progress 700 n S.C. MO Unk. 03/28/10
Salem-1/PSEG 1,115 n N.J. MO Unk. 07/07/10
Surry-2/Dominion 840 n Va. MO Unk. 07/13/10
trading around $93.75/MWh on ICE. Off-peak traded around
$42.75/MWh on ICE, about $1 more than Platts’ for-Friday
index. Weekend peak traded around $79.25/MWh on ICE,
while weekend off-peak traded around $38.25/MWh. Bal-
week packages were trading around $91/MWh on ICE, a $4
premium to July 19-23 packages seen Thursday. July 26-30
(continued on page 9)
 Energy Trader Monday, July 19, 2010

Daily spot gas prices, Jul 16 ($/MMBtu)

East Gas Markets
Midpoint +/- Absolute Common Vol. Deals

Northeast cash gains as much as 25 cents Northeast

Spot gas prices in the Northeast tacked on as much as 25
cents Friday after the August NYMEX gas futures contract jumped
28 cents Thursday. High demand from some steamy temperatures
forecast for over the weekend added to the move up for cash,
with highs above 90 expected in New York until today.
Transcontinental Gas Pipe Line zone 6 New York gained
more than 15 cents to average in the mid-$5.10s/MMBtu on
IntercontinentalExchange, though volumes fell back almost
100,000 Mcf to more than 300,000 Mcf for the generally lower
Algonquin, receipts 5.090 +0.180 5.03-5.27 5.03-5.15 43 6
Algonquin, city-gates 5.175 +0.175 5.10-5.22 5.15-5.21 448 69
Columbia Gas, App. 4.830 +0.220 4.68-4.88 4.78-4.88 676 122
Dominion, North Point --- --- ------- ------- --- ---
Dominion, South Point 4.895 +0.245 4.81-4.94 4.86-4.93 823 114
Dracut, Mass. 5.055 +0.150 5.06-5.06 5.06-5.06 1 1
Iroquois, receipts 5.145 +0.180 5.09-5.18 5.12-5.17 186 35
Iroquois, zone 2 5.205 +0.140 5.12-5.25 5.17-5.24 290 39
Lebanon Hub 4.820 +0.220 4.78-4.85 4.80-4.84 151 40
Leidy Hub 5.045 +0.215 4.98-5.07 5.02-5.07 47 7
Niagara 4.975 +0.200 4.90-5.02 4.95-5.01 241 20
Tennessee, zone 6 del. 5.170 +0.185 5.07-5.19 5.14-5.19 324 58
Tx. Eastern, M-3 5.105 +0.165 5.04-5.20 5.07-5.15 903 139
Transco, zone 6 non-N.Y. 5.105 +0.170 5.03-5.18 5.07-5.14 293 50
Transco, zone 6 N.Y. 5.125 +0.145 5.06-5.20 5.09-5.16 419 69

gas use during the weekend. Gulf Coast

Most other points in the Mid-Atlantic and New England
moved in tandem with the New York city-gate, largely holding
regional spreads in place. The heat-related demand kept border
point Niagara strong as it moved up almost 20 cents in a third
straight day of transaction after a long spell of illiquidity.
In Appalachia, Dominion Transmission took the largest
gain of nearly 25 cents amid restrictions placed on incoming
Rockies supplies. Kinder Morgan Energy Partners said on its web
site that beginning Friday and until further notice, the Rockies
Express Pipeline is at capacity for deliveries to the Dominion
Clarington interconnect in eastern Ohio, putting interruptible
and secondary nominations at risk.
Liquidity for Dominion fell in the process, as volumes
dropped almost 150,000 Mcf from Thursday to more than
550,000 Mcf on ICE.
The Lebanon, Ohio, hub and Columbia Gas Transmission
put up gains of about 20 cents, more fitting to the upswing seen
in the Gulf Coast supply area, which the points generally follow
more closely.
The August NYMEX gas futures contract lost 6.7 cents to set-
tle at $4.519/MMBtu as traders booked profits from Thursday’s
run-up. The contract opened at $4.614/MMBtu and traded
between a high of $4.659/MMBtu and a low of $4.472/MMBtu.
Gulf Coast spot gas prices surged more than 20 cents higher
on a spike in August NYMEX gas futures prices Thursday. Cash
prices opened the day with a significant jump before tailing
off to intraday lows at the end of the trading session following
August NYMEX gas futures contract weakness Friday.
The sharp run-up for August had been due to a bullish stor-
Columbia Gulf, La. 4.620 +0.215 4.52-4.67 4.58-4.66 138 26
Columbia Gulf, mainline 4.635 +0.240 4.53-4.69 4.60-4.68 494 85
Florida Gas, zone 1 4.680 +0.270 4.67-4.70 4.67-4.69 26 3
Florida Gas, zone 2 4.715 +0.265 4.65-4.75 4.69-4.74 26 6
Florida Gas, zone 3 4.645 +0.180 4.49-4.76 4.58-4.71 107 20
Florida city-gates 5.595 -0.665 5.20-6.30 5.32-5.87 60 9
Southern Natural, La. 4.650 +0.200 4.57-4.70 4.62-4.68 464 48
Stingray Pool --- --- ------- ------- --- ---
Tennessee, zone 0 4.585 +0.240 4.53-4.62 4.56-4.61 225 46
Tennessee, 500 leg 4.610 +0.225 4.50-4.68 4.57-4.66 741 115
Tennessee, 800 leg 4.605 +0.215 4.50-4.67 4.56-4.65 333 59
Tx. Eastern, ETX 4.550 +0.280 4.53-4.60 4.53-4.57 81 17
Tx. Eastern, STX 4.540 +0.255 4.51-4.55 4.53-4.55 38 8
Tx. Eastern, WLA 4.590 +0.230 4.55-4.60 4.58-4.60 257 30
Tx. Eastern, ELA 4.620 +0.205 4.57-4.66 4.60-4.64 241 50
Tx. Eastern, M-1 24-in. 4.640 +0.245 4.60-4.66 4.63-4.66 90 13
Tx. Eastern, M-1 30-in. 4.710 +0.230 4.67-4.75 4.69-4.73 425 77
Transco, zone 1 4.595 +0.225 4.48-4.63 4.56-4.63 86 20
Transco, zone 2 4.645 +0.270 4.60-4.66 4.63-4.66 70 10
Transco, zone 3 4.665 +0.240 4.50-4.73 4.61-4.72 446 70
Transco, zone 4 4.675 +0.220 4.55-4.72 4.63-4.72 908 126
Transco, zone 5 del. 4.945 +0.240 4.85-4.97 4.92-4.97 309 24
Platts oil prices, Jul 16
($/b) ($/MMBtu)
Gulf Coast spot
1% Resid (1) 68.75-68.85 10.94
3% Resid (1) 66.55-66.65 10.59
Crude spot
WTI (Aug) (2) 75.87-75.89 13.03
New York spot
No.2 (1) 83.22-83.43 14.30
0.3% Resid LP (3) 73.85-73.90 11.75
0.3% Resid HP (3) 71.80-71.85 11.42
0.7% Resid (3) 70.75-70.80 11.26
1% Resid (3) 69.75-69.80 11.10
1= barge delivery; 2= pipeline delivery; 3= cargo delivery

(continued on page 9)

Platts Energy Trader spark spreads, Jul 16 ($/MWh)

New England PJM Southern, into
Median Change Peak Change Median Change Peak Change Median Change Peak Change
Gas 36.21 -10.26 31.22 -10.42 32.42 -14.99 20.75 -15.47 -17.53 -3.12 -44.42 -4.36
Oil -13.29 -8.50 -40.44 -8.50 -49.07 -12.50 -73.23 -12.50 -105.44 0.23 -139.81 0.23
Coal 54.98 -8.78 59.10 -12.79 56.13 -12.82 24.69 -0.04
Nuclear 86.27 -8.50 88.23 -12.50 50.07 0.23

Platts Energy Trader spark spreads are the differences between on-peak spot electricity prices and spot fuel prices in a region calculated at two heat rates. A posi-
tive number shows the cost advantage (in $/MWh) of using that fuel to generate electricity; a negative number shows it is more economical to purchase power. The
median heat rate is a composite of generating units using that fuel in each region. The peak heat rate is based on the least efficient 25% of generating plants.

3 Copyright © 2010 The McGraw-Hill Companies

 Energy Trader
Central Power Markets
Dailies finish mixed; forwards mixed to lower
Central power dailies at the end of the week finished mixed, with
prices in the Midwest losing steam but rising in the South Central
region on Friday. Forwards were mixed to lower as the August
NYMEX gas futures contract lost 6.7 cents to settle at $4.519/MMBtu.
Midwest dailies slipped as forecasts for today called for lower
temperatures despite higher spot gas prices. Weather outlooks
called for highs in the 80s and 90s. Meanwhile, Chicago city-
gates spot gas gained about 20 cents, trading around $4.63/
MMBtu on IntercontinentalExchange. Cinergy Hub day-ahead
traded around $58.25/MWh on ICE, about $2.50 less than Platts’
for-Friday index. Off-peak was bid at $23.50 and offered 50 cents
less than Platts’ index at $25/MWh. Weekend peak traded around
$45.60/MWh on ICE, while off-peak traded around $19.75/MWh
on ICE. Minnesota Hub day-ahead offered at $48/MWh on ICE,
compared with Platts’ for-Friday index of $41.50/MWh.
In the Midwestern portion of the PJM Interconnection,
dailies were generally lower than Platts’ for-Friday indexes.
AEP-Dayton Hub day-ahead was bid $1.50 less than Platts’ for-
Friday index at $63 and offered at $70/MWh on ICE. Off-peak
was bid at $27.25/MWh on ICE, about $4 less than Platts’ for-
Friday index. Weekend peak traded around $51.25/MWh on
ICE. Weekend off-peak was bid at $26 and offered at $30/MWh.
Northern Illinois Hub day-ahead traded around $60.50/MWh
on ICE, about $6 less than Platts’ for-Friday index. Weekend
peak packages were bid at $46 and offered at $54/MWh, while
weekend off-peak was bid at $25.50 and offered at $30/MWh.
Midwest terms also declined marginally, following a day of strong
gains Thursday. On ICE, trading was much more active compared
with previous days and volume was higher. Cinergy Hub August
dropped 75 cents to $51.50/MWh and September remained flat at
$39.50/MWh. Northern Illinois August rose $1.25 to $53/MWh in
thin market Friday, while September declined 41 to $39.75/MWh.
AEP-Dayton Hub August added $1.50 to $55.50/MWh.
Above normal temperatures and a spot gas price jump sent South
Central dailies up in trading on ICE to their highest levels in sev-
eral weeks. Temperatures in Dallas were expected to stay above 100
through Tuesday, while elsewhere in the state highs were forecast in
the mid-to-upper 90s. Lows were projected in the high 70s. Houston
Ship Channel spot gas gained about 25 cents to $4.59/MMBtu on
ICE. The Electric Reliability Council of Texas projected a 2.6% peak
load drop to about 58,500 MW for today. ERCOT Houston soared
about $4.25 to trade at about $59.25/MWh on ICE. North gained $4
to about $56.75/MWh while South traded at about $57.25/MWh, up
about $3. West traded at about $53.75/MWh, up $1.
Houston weekend 2x16 packages traded at about $56.25/MWh,
the highest of the ERCOT zones. South weekend 2x16 was at
about $55/MWh while North traded at about $53.50/MWh. West
weekend 2x16 packages traded at $51/MWh. Weekend off-peak
packages were up, with Houston the highest at about $32/MWh.
North and South traded around $31.25/MWh. West was bid at $28
4 Copyright © 2010 The McGraw-Hill Companies
Monday, July 19, 2010
Day-ahead markets for delivery Jul 19 ($/MWh)
Index Change Range Deals Volume Avg $/Mo
On-Peak
Michigan Hub 62.00 -1.75 62.00-62.00 N.A. N.A. 55.56
AD Hub 66.50 2.00 66.50-66.50 N.A. N.A. 57.44
First Energy 61.00 -1.75 61.00-61.00 N.A. N.A. 54.58
Cinergy Hub 58.50 -2.25 58.50-58.50 N.A. N.A. 53.38
Illinois Hub 62.00 -1.50 62.00-62.00 N.A. N.A. 55.85
NI Hub 60.50 -6.00 60.50-60.50 N.A. N.A. 53.96
Minnesota Hub 47.00 5.50 47.00-47.00 N.A. N.A. 39.63
MAPP, South 54.25 1.50 54.25-54.25 N.A. N.A. 47.38
SPP, North 55.00 1.50 55.00-55.00 N.A. N.A. 46.94
Entergy, into 54.75 1.50 54.75-54.75 N.A. N.A. 47.62
ERCOT, North 56.83 4.06 56.50-58.05 35 1,800 47.18
ERCOT, Houston 58.96 4.01 58.75-59.25 5 350 48.33
ERCOT, West 53.25 0.50 53.25-53.25 N.A. N.A. 45.80
ERCOT, South 57.89 3.58 57.00-58.25 14 950 47.92
Off-Peak
Michigan Hub 26.25 -1.50 26.25-26.25 N.A. N.A. 26.35
AD Hub 29.00 -2.00 29.00-29.00 N.A. N.A. 27.40
First Energy 24.75 -1.50 24.75-24.75 N.A. N.A. 23.65
Cinergy Hub 24.25 -1.25 24.25-24.25 N.A. N.A. 22.73
Illinois Hub 22.00 -0.50 22.00-22.00 N.A. N.A. 20.50
NI Hub 28.75 -1.25 28.75-28.75 N.A. N.A. 22.92
Minnesota Hub 15.75 1.25 15.75-15.75 N.A. N.A. 15.35
MAPP, South 18.75 1.00 18.75-18.75 N.A. N.A. 16.85
SPP, North 17.25 1.00 17.25-17.25 N.A. N.A. 15.35
Entergy, into 25.00 1.00 25.00-25.00 N.A. N.A. 23.10
ERCOT, North** 31.36 2.19 31.00-31.75 8 350 29.20
ERCOT, Houston** 32.00 2.27 32.00-32.00 N.A. N.A. 29.63
ERCOT, West** 29.00 1.00 29.00-29.00 N.A. N.A. 28.25
ERCOT, South** 32.00 2.85 32.00-32.00 N.A. N.A. 29.37
**Off peak in ERCOT markets traded as a Saturday-Monday package.
Near-term markets ($/MWh)
Contract Transacted Deal
Cinergy Hub
Next-week 07/16 59.75-60.25
Next-week 07/15 64.75-65.25
Entergy, Into
Bal-week 07/16 55.75-56.25
Bal-week 07/14 50.75-51.25
Next-week 07/15 55.75-56.25
Next-week 07/14 50.75-51.25
ERCOT, North
Bal-week 07/13 52.25-52.75
Bal-week 07/12 50.25-50.75
Bal-month 07/16 53.50-54.00
Bal-month 07/15 53.75-54.25
Generation unit outage report
Plant/Operator Cap Fuel State Status Return Shut
No outages reported
and offered at $30/MWh. Entergy next-day gained $1.50 to about
$54.75/MWh on ICE. Balance-of-the-week was bid at $54 and
offered at $58.50/MWh. Next-week packages were bid at $49/MWh
without offers.
South Central August forwards were mixed. ERCOT Houston
zone August fell 50 cents to about $53.25/MWh, September lost
75 cents to about $44.50/MWh, and the fourth quarter shed 70
cents to about $39.15/MWh. Most heat rate markets on ICE were
up at about 2:30 pm EDT. ERCOT North August dropped $1 to
about $51.75/MWh, and the fourth quarter fell 65 cents to about
$37.75/MWh. Into Entergy August rose 25 cents to about $47/MWh,
but the fourth quarter fell 10 cents to about $34.65/MWh.
 Energy Trader Monday, July 19, 2010

Daily spot gas prices, Jul 16 ($/MMBtu)

Central Gas Markets
Midpoint +/- Absolute Common Vol. Deals

Midcontinent cash up by as much as 20 cents Upper Midwest

Upper Midwest spot gas prices rose by as much as 20 cents Alliance, into interstates 4.650 +0.220 4.60-4.68 4.63-4.67 377 37
ANR, ML7 4.815 +0.210 4.80-4.85 4.80-4.83 48 6
Friday on warmer-than-normal weather. August NYMEX gas Chicago city-gates 4.630 +0.215 4.54-4.67 4.60-4.66 668 109
futures contract strength on Thursday also supported cash prices. Consumers city-gate 4.745 +0.250 4.68-4.78 4.72-4.77 189 45
Dawn, Ontario 4.870 +0.200 4.79-4.92 4.84-4.90 1,292 156
The Chicago city-gates rose more than 20 cents, but the Emerson, Viking GL 4.055 +0.150 4.03-4.11 4.04-4.08 618 49
supply regions saw smaller gains. Those gains slowed demand Mich Con city-gate 4.800 +0.225 4.71-4.83 4.77-4.83 270 50
in spite of the hot weather across the region, with volumes on Northern Bdr., Ventura TP 4.560 +0.205 4.45-4.60 4.52-4.60 85 10

IntercontinentalExchange dipping sharply. Gulf Coast

“I can’t see too many buyers; not at these prices,” one trader Agua Dulce Hub 4.615 +0.285 4.59-4.63 4.61-4.63 28 3
ANR, La. 4.615 +0.235 4.50-4.66 4.58-4.66 276 54
said, adding that he expects prices to retrench in the coming week. Carthage Hub 4.555 +0.255 4.51-4.59 4.54-4.58 211 32
Chicago prices remained broadly in a $4.60/MMBtu to Henry Hub 4.675 +0.250 4.53-4.72 4.63-4.72 882 102
Houston Ship Channel 4.590 +0.260 4.54-4.62 4.57-4.61 496 53
$4.65/MMBtu range on ICE, while volumes there fell to
Katy 4.580 +0.250 4.50-4.62 4.55-4.61 967 122
440,100/MMBtu, from 637,200/MMBtu Thursday. Consumers NGPL, STX 4.590 +0.240 4.47-4.61 4.56-4.61 172 23
Energy and Michigan Consolidated Gas also saw similar NGPL, Texok zone 4.490 +0.230 4.40-4.53 4.46-4.52 727 74
NGPL, La. --- --- ------- ------- --- ---
20-cent gains. Tx. Gas, zone 1 4.630 +0.240 4.53-4.67 4.60-4.67 471 70
Supply-area points such as Northern Natural Gas’ demarca- Tx. Gas, zone SL 4.605 +0.210 4.53-4.65 4.58-4.64 119 20
Trunkline, WLA 4.595 +0.250 4.57-4.62 4.58-4.61 13 6
tion point, Northern Natural Gas’ pipeline at Ventura, Iowa, and
Trunkline, ELA 4.605 +0.255 4.48-4.67 4.56-4.65 111 19
Northern Border Pipeline at Ventura, Iowa, saw more modest gains Trunkline, zone 1A 4.610 +0.240 4.55-4.65 4.59-4.64 76 19
of around 15 cents for averages in the low $4.50s/MMBtu. Midcontinent
On average, that saw the Chicago premium over demarc, ANR, Okla. 4.350 +0.180 4.29-4.39 4.33-4.38 43 12
Northern Natural at Ventura and Northern Border at Ventura CenterPoint, East 4.450 +0.210 4.39-4.50 4.42-4.48 258 47
NGPL, Amarillo receipt 4.435 +0.185 4.41-4.48 4.42-4.45 12 6
move out to almost 10 cents, more than double what it was NGPL, Midcontinent 4.360 +0.200 4.27-4.40 4.33-4.39 341 55
Thursday. Temperatures remain above the seasonal average Northern, demarc 4.535 +0.155 4.47-4.60 4.50-4.57 203 44
in the Chicago area, although the National Weather Service Northern, Ventura 4.520 +0.155 4.43-4.60 4.48-4.56 173 23
Oneok, Okla. 4.420 +0.235 4.40-4.48 4.40-4.44 263 41
expects slightly cooler weather toward the middle of this week. Panhandle, Tx.-Okla. 4.390 +0.220 4.29-4.46 4.35-4.43 488 89
Meanwhile, ANR Pipeline-Oklahoma continued with engine Southern Star 4.325 +0.190 4.26-4.45 4.28-4.37 96 13
repairs at its Joliet Compressor Station in Illinois, which has
reduced the total NGPL-Joliet Interconnect capacity to 100,000
Henry Hub/NYMEX spread
Dt/d, from 125,700 Dt/d usually.
A strong showing from the August NYMEX gas futures con- ($/MMBtu)
tract in the wake of the latest Energy Information Administration 4.8
storage data lifted prices across the Midcontinent region, with Henry Hub cash price
4.7 NYMEX front month close
most points showing gains of more than 20 cents. Having already
added 28 cents Thursday, the NYMEX continued to rally in
4.6
morning trading to take the contract through $4.50/MMBtu.
Persistent heat provided a second level of support for 4.5
Midcontinent prices, with the National Weather Service fore-
casting Oklahoma temperatures would continue to climb into 4.4
this week to remain above seasonal averages. Oklahoma Gas
Transmission’s Oneok zone was among the bigger movers, aver- 4.3
12-Jul 13-Jul 14-Jul 15-Jul 16-Jul
(continued on page 9)

Platts Energy Trader spark spreads, Jul 16 ($/MWh)

Cinergy ComEd Entergy ERCOT East
Median Change Peak Change Median Change Peak Change Median Change Peak Change Median Change Peak Change
Gas -8.41 -5.16 -26.51 -5.95 -0.23 -8.82 -13.40 -9.43 1.43 -1.00 -6.28 -1.36 7.26 1.08 0.63 0.71
Oil -103.92 -0.68 -163.73 -0.11 -95.30 -4.50 -137.22 -4.10 -71.04 2.74 -89.70 2.92 -60.15 5.17 -69.73 5.27
Coal 29.26 -2.54 25.76 -2.58 26.48 -5.89 20.35 1.60 24.40 4.11
Nuclear 53.75 -2.25 56.02 -6.00 49.67 1.50 54.27 4.01

Platts Energy Trader spark spreads are the differences between on-peak spot electricity prices and spot fuel prices in a region calculated at two heat rates. A posi-
tive number shows the cost advantage (in $/MWh) of using that fuel to generate electricity; a negative number shows it is more economical to purchase power. The
median heat rate is a composite of generating units using that fuel in each region. The peak heat rate is based on the least efficient 25% of generating plants.

5 Copyright © 2010 The McGraw-Hill Companies

 Energy Trader Monday, July 19, 2010

Day-ahead markets for delivery Jul 19 ($/MWh)

West Power Markets
Index Change Range Deals Volume Avg $/Mo

Dailies mixed, with SW easing; forwards static On-Peak

COB 43.31 0.60 43.00-44.25 36 900 37.78
Western day-ahead power prices were mixed Friday: those Mid-C 39.05 1.42 38.00-40.50 224 7,025 33.94
in the Southwest eased despite hot weather outlooks, while Palo Verde 50.64 -1.56 49.00-53.00 25 650 43.06
Mead 54.50 -0.75 54.50-54.50 N.A. N.A. 44.93
California prices softened with lower expected demand and Mona 57.00 5.00 57.00-57.00 N.A. N.A. 43.50
Northwest deals edged up, receiving the normal for-Monday pre- Four Corners 58.50 1.25 58.50-58.50 N.A. N.A. 46.32
NP15 45.00 -1.00 45.00-45.00 N.A. N.A. 39.25
mium. Forwards were essentially stagnant as the August NYMEX SP15 46.50 -1.25 46.50-46.50 N.A. N.A. 39.72
gas futures contract trimmed big gains it made Thursday.
Off-Peak
In the Southwest, Palo Verde on-peak dailies for Monday COB 33.77 7.52 33.25-34.25 27 725 21.61
delivery slipped about $1.75, with trades around $50/MWh on Mid-C 30.78 6.36 26.00-31.50 125 3,475 18.78
Palo Verde 37.35 9.91 34.00-38.00 21 575 27.47
IntercontinentalExchange. Palo Verde financial on-peak bal- Mead 40.50 9.00 40.50-40.50 N.A. N.A. 29.84
ance-of-the-month packages were close to where they were the Mona 33.00 7.50 33.00-33.00 N.A. N.A. 23.72
Four Corners 37.00 9.00 37.00-37.00 N.A. N.A. 24.25
previous day, with bids at $43.75 and offers at $45/MWh. The NP15 36.50 9.00 36.50-36.50 N.A. N.A. 25.89
Western Electricity Coordinating Council listed peak demand SP15 35.75 8.50 35.75-35.75 N.A. N.A. 25.78
on Friday for the Southwest at around 28,293 MW, more than †West off-peak includes all day Sunday
800 MW above the previous day.
In California, NP15 and SP15 financial on-peak day-ahead
Near-term markets ($/MWh)
packages traded in the mid-$40s/MWh, a drop of as much as
about $1.50. SP15 financial on-peak bal-month packages were Contract Transacted Deal
nearly steady, with bids at $42.50 and offers at $42.75/MWh on Mid-C
ICE. The California Independent System Operator forecast peak Bal-month 07/16 38.00-38.50
Bal-month 07/15 37.25-42.75
demand for Friday at 47,142 MW; peak demand at 39,710 MW
Bal-month 07/14 35.50-36.25
for today; and peak demand at 37,607 MW for Tuesday. Bal-month 07/13 34.50-35.00
In the Northwest, Mid-Columbia on-peak daily packages Bal-month 07/12 34.50-35.25
Bal-month (off-peak) 07/14 25.75-26.25
edged up almost $1.50, with deals in the upper $30s/MWh on
SP15
ICE. Mid-Columbia financial on-peak bal-month packages on
Bal-week 07/16 40.00-41.00
ICE were nearly unchanged, with bids at $37.75 and offers at Bal-week 07/14 42.75-43.25
$38.50/MWh. The WECC listed the Northwest’s peak demand Bal-week 07/12 39.75-40.25
on Friday at around 53,750 MW, nearly 2,000 MW more than Bal-month 07/16 42.50-43.00
Bal-month 07/15 42.50-43.00
peak demand for Thursday. Bal-month 07/14 40.00-41.00
Forward markets barely moved, with NYMEX gas futures Bal-month 07/13 40.00-40.50
Next-week 07/15 41.50-42.00
trimming back some of the gains made Thursday after the
Energy Information Administration released the gas stor-
age report for the week ended July 9. The August NYMEX gas Generation unit outage report
futures contract was down 6.5 cents to $4.521/MMBtu in elec-
Plant/Operator Cap Fuel State Status Return Shut
tronic trading, then settled down 6.7 cents at $4.519/MMBtu in
Alamitos-6/AES 495 g Calif. MO Unk 07/15/10
profit-taking action. Encina-3/NRG 110 g Calif. MO Unk 07/14/10
In California, SP15 on-peak August financial swaps rose 50 High Desert/HDP 830 g Calif. PMO/MO Unk 06/14/10
Inland Empire-2/Inland 366 g Calif. PMO Unk 07/11/10
cents, with bids at $44 and offers at $44.45/MWh on ICE at Mandalay-1/Reliant 215 g Calif. MO Unk 07/15/10
around 2:30 pm EDT. SP15 September was flat at $42.25/MWh.
SP15 fourth quarter edged up 25 cents to $44.35/MWh. NP15
August was lifted 50 cents to $43.75/MWh. to $43.35/MWh.
In the Northwest, Mid-Columbia on-peak August was lifted In the Southwest, Palo Verde on-peak August increased 50
25 cents to $40.75/MWh, and Mid-C September was unchanged cents to $43/MWh. Palo Verde fourth quarter tacked on 15
at $40/MWh. Mid-C on-peak fourth quarter tacked on 10 cents cents, going to $38.90/MWh.

6 Copyright © 2010 The McGraw-Hill Companies

 Energy Trader Monday, July 19, 2010

Daily spot gas prices, Jul 16 ($/MMBtu)

West Gas Markets
Midpoint +/- Absolute Common Vol. Deals

Northwest cash rises by as much as 20 cents California

Spot gas prices in the Northwest rose as much as 20 cents PG&E, Malin 4.150 +0.195 4.10-4.19 4.13-4.17 371 48
PG&E, South 4.305 +0.110 4.27-4.34 4.29-4.32 86 13
Friday on the back of unusually warm weather in parts of the PG&E, city-gates 4.375 +0.200 4.32-4.40 4.36-4.40 678 86
region. Highs in the mid-to upper 90s were expected in Salt Lake SoCal Gas 4.350 +0.175 4.29-4.40 4.32-4.38 427 51
SoCal Gas, city-gate 4.340 +0.165 4.25-4.38 4.31-4.37 465 53
City and Denver over the weekend and into this week, about 10
degrees above normal, according to the National Weather Service. Rockies/Northwest

Cash prices were also buoyed by a 28-cent jump Thursday on Cheyenne Hub 3.950 +0.025 3.80-3.98 3.91-3.98 212 40
CIG, Rockies 3.875 +0.120 3.76-3.90 3.84-3.90 216 40
the August NYMEX gas futures contract, which soared after the El Paso, Bondad 4.020 +0.080 3.97-4.05 4.00-4.04 100 19
Energy Information Administration reported a rise in storage inven- El Paso, San Juan 4.185 +0.145 4.12-4.22 4.16-4.21 537 71
El Paso, South Mainline 4.515 +0.185 4.45-4.53 4.50-4.53 79 11
tories at the low end of expectations for the week that ended July 9. GTN, Kingsgate 3.895 +0.180 3.86-3.93 3.88-3.91 320 38
Colorado Interstate Gas prices rose more than 10 cents to an aver- Kern River, Opal 3.900 +0.130 3.77-3.92 3.86-3.92 372 56
Kern River, delivered 4.360 +0.195 4.33-4.38 4.35-4.37 131 19
age in the high $3.80s/MMBtu on IntercontinentalExchange. Other
NW, Wyo. pool 3.855 +0.105 3.77-3.92 3.82-3.89 118 18
Rockies points saw similar increases. NW, south of Green River 3.840 +0.100 3.80-3.89 3.82-3.86 61 14
At the US-Canada border, Kingsgate prices rose about 20 NW, Can. border (Sumas) 3.855 +0.150 3.80-3.87 3.84-3.87 406 61
Questar, Rockies 3.790 +0.060 3.78-3.80 3.79-3.80 4 4
cents to average near $3.90/MMBtu on ICE. A similar jump for Stanfield, Ore. 3.955 +0.190 3.92-4.00 3.94-3.98 214 20
prices at Stanfield, Oregon, pushed prices there into the mid- TCPL Alberta, AECO-C* 3.490 +0.175 3.45-3.54 3.47-3.51 1,947 163
Westcoast, station 2* 3.315 +0.080 3.24-3.36 3.29-3.35 292 46
$3.90s/MMBtu on ICE.
Cheyenne Hub saw the least impact from the heat with prices West Texas

there increasing only a couple of cents to an average in the mid-
$3.90s/MMBtu. A regional trader said that constraints on the
Trailblazer Pipeline caused the Cheyenne weakness. “Trailblazer
is down which is keeping a lid on gas flows out of the region,
which in turn is keeping prices down,” a trader said. Trailblazer
announced that it was at capacity for gas going eastbound through
compressor station 602 for Friday’s gas day until further notice.
Spot gas prices in the Southwest rose 15 to 20 cents at most
points, following strength in the August NYMEX gas futures
contract and extreme heat in some areas. The front-month con-
tract jumped Thursday after the EIA storage report, then contin-
ued to rally in Friday morning trading.
At the Pacific Gas and Electric city-gates, cash jumped about 20
cents to average in the high $4.30s/MMBtu on ICE. Heat through-
out California boosted prices there. Highs around 100 were expected
in Sacramento, California, over the past weekend, before dropping
to the high 80s early this week, according to the National Weather
Service. Los Angeles was also seeing unusual heat, with a high of 93
degrees expected Saturday, about 10 degrees above normal.
Cash at the SoCal Gas city-gates rose nearly 20 cents on ICE,
while volumes plummeted — from more than 1 Bcf on Thursday,
to about 386,000 Mcf. Other California points saw similar gains,
(continued on page 9)
El Paso, Permian 4.325 +0.155 4.30-4.37 4.31-4.34 623 85
Transwestern, Permian 4.240 +0.190 4.20-4.25 4.23-4.25 9 6
Waha 4.415 +0.185 4.33-4.46 4.38-4.45 901 102
* TCPL Alberta, AECO-C and Westcoast station 2 prices are in Canadian dollars
per gigajoule.
NYMEX Henry Hub futures contract closings, Jul 16
Month High Low Close Change
Aug 2010 4.659 4.472 4.519 -0.067
Sep 2010 4.658 4.471 4.518 -0.074
Oct 2010 4.717 4.527 4.575 -0.075
Nov 2010 4.940 4.780 4.830 -0.063
Dec 2010 5.178 5.045 5.090 -0.051
Jan 2011 5.360 5.225 5.268 -0.054
Feb 2011 5.327 5.204 5.241 -0.053
Mar 2011 5.243 5.109 5.150 -0.052
Apr 2011 5.055 4.926 4.965 -0.052
May 2011 5.057 4.949 4.981 -0.056
Jun 2011 5.105 4.994 5.026 -0.060
Jul 2011 5.154 5.055 5.081 -0.062
Aug 2011 5.194 5.097 5.124 -0.064
Sep 2011 5.185 5.117 5.152 -0.064
Oct 2011 5.309 5.198 5.235 -0.066
Nov 2011 5.496 5.448 5.465 -0.066
Dec 2011 5.790 5.686 5.725 -0.066
Jan 2012 5.935 5.855 5.893 -0.066
Open int., Jul 15: 215003; Total volume, Jul 15: 786655.

Platts Energy Trader spark spreads, Jul 16 ($/MWh)

Mid-C Northern California Southern California
Median Change Peak Change Median Change Peak Change Median Change Peak Change
Gas 4.86 0.09 -6.28 -0.34 -2.31 -3.19 -18.41 -3.93 1.60 -3.06 -19.38 -3.90
Coal 33.14 1.37
Nuclear 34.50 1.42 40.51 -1.00 41.63 -1.25

Platts Energy Trader spark spreads are the differences between on-peak spot electricity prices and spot fuel prices in a region calculated at two heat rates. A posi-
tive number shows the cost advantage (in $/MWh) of using that fuel to generate electricity; a negative number shows it is more economical to purchase power. The
median heat rate is a composite of generating units using that fuel in each region. The peak heat rate is based on the least efficient 25% of generating plants.

7 Copyright © 2010 The McGraw-Hill Companies

 Energy Trader Monday, July 19, 2010

Platts-ICE Forward Curve -- Electricity, Jul 16 ($/MWh)

Prompt month: Aug 10 Mass Hub: Key packages, last 30 days Mass Hub: Forward curve
Mass Hub 67.25 $/MWh $/MWh
70 120
N.Y. Zone G 75.25 Prompt month CY11 spot price, last 30 days
N.Y. Zone J 87.50 67 July/Aug11 Jan/Feb11
N.Y. Zone A 53.00
64
Ontario* 55.00 96
PJM West 71.25 61
AD Hub 55.50
58
NI Hub 53.00 72
Cinergy Hub 51.50 55
Jun-14 Jun-22 Jun-30 Jul-8 Jul-16
Southern Into 49.50
Entergy Into 47.00 Mass Hub: Marginal heat rate
48
ERCOT North 51.75 Btu/kWh
14000
Houston 53.25
Month 1
ERCOT West 50.00 13060 Month 2
ERCOT South 52.50 24
12120
Mid-C 40.75
Palo Verde 43.00 11180
NP15 43.75
10240 0

Sep12
Aug10

Q411

Cal12

Cal12
Jan/Feb12
Jun12

Cal13
Sep10

Q410

Jun11
Sep11

Mar/Apr11
Jul/Aug11

July/Aug12
May12

Cal11
Oct10

Mar/Apr12

Cal14
May11

Jan/Feb11

Q412
Cal11
SP15 44.25
Mead 44.50 9300
Jun-14 Jun-22 Jun-30 Jul-8 Jul-16
*Ontario prices are in Canadian dollars

Table and graphs are created using Platts–ICE Forward Curve — Electricity (North America) data. Both on-peak and off-peak electricity forward assessments are available for periods spanning four years. To see a sample
and find information on how to subscribe to the full data set go to www.risk.platts.com. For more information about Platts services, please call +1-800-PLATTS8. For editorial questions call Mike Wilczek +202-383-2246 or
Eric Wieser +202-383-2092

Platts-ICE Forward Curve -- Natural Gas, Jul 16 (¢/MMBtu)

Prompt month:Aug 10 Northwest, Rockies: Key packages, last 30 days Northwest, Rockies: Forward curve
Algonquin, city-gates 44.50 $/MMBtu $/MMBtu
6 6
Transco, zone 6-NY 42.75 spot price, last 30 days
Texas Eastern, M-3 39.75
Columbia Gas, Appalachia 13.25
5
Transco, zone 3 2.00
Transco, zone 4 2.50
Florida Gas, zone 3 10.00 4 4
Trunkline, LA -4.75
Aug Winter 10-11
Houston Ship Channel -8.25 Summer 10* Cal 2011
Chicago city-gates -4.75 3
Jun-14 Jun-22 Jun-30 Jul-8 Jul-16
MichCon city-gate 12.75
Panhandle, TX-Okla. -34.50 Northwest, Rockies: Basis market vs NYMEX
Waha -23.75 $/MMBtu 2
6
El Paso, Permian Basin -36.50
El Paso, San Juan Basin -54.25
PG&E city-gate -24.75
5
SoCal Gas -35.00
Northwest, Rockies -75.00
Northwest, Sumas -77.25 0
4
Summer 10*

Winter 10-11

Summer 11

Winter 11-12

Summer 12

Cal 11

Cal 12

Cal 13
Aug 10

Sep 10

Oct 10

Dawn, Ontario 23.00 Prompt month basis

AECO, Alberta -103.00 Prompt month NYMEX

Summer season is April-October. Winter is 3

Jun-14 Jun-22 Jun-30 Jul-8 Jul-16
November-March. *Balance of the season.

Table and graphs are created using Platts–ICE Forward Curve — Natural Gas (North America) data. Forward assessments as basis to the Henry Hub and full values are available for
periods spanning three years. To see a sample and find information on how to subscribe to the full data set go to www.risk.platts.com. For more information on Platts services, please
call +1-800-PLATTS8. For editorial questions call Samantha Santa Maria +713-658-3271 or Joshua Starnes, 713-658-3265.

8 Copyright © 2010 The McGraw-Hill Companies

 Energy Trader Monday, July 19, 2010

East Power ... from page 2
packages gained $5, trading around $84/MWh.
Mid-Atlantic terms shed about 25 cents at the front of the
curve led by the decline in NYMEX gas futures. Power trad-
ing on ICE was active compared with previous days. PJM West
August remained flat at $71.25/MWh and September declined
25 cents to $51.50/MWh. The fourth quarter dropped 25 cents
to $46.40/MWh, ICE showed.
Southeast dailies were down in ICE trades with weather
forecasts calling for highs in the mid-to-upper 90s and lows
in the 70s, both above normal. Transco zone 3 spot gas
traded at $4.68/MMBtu on ICE, up 25 cents. Into Southern
next-day lost $1 to $54/MWh. Weekend on-peak packages
traded at $47/MWh. Weekend off-peak was bid at $25 and
offered at $28/MWh. Into Southern bal-week was bid at $54
and offered at $59/MWh, while next week packages were bid
at $53 and offered at $57/MWh. Into TVA next-day was bid
at $60, up $2.75 from Platts’ for-Friday index, and offered at
$70/MWh.
Southeast August forwards moved up, even as NYMEX
gas futures moved down. Into Southern August rose 25 cents
to about $49.50/MWh, September shed 25 cents to about
$39.50/MWh, and the fourth quarter fell 10 cents to about
$36.40/MWh.
Daily generation outage references
MO unplanned maintenance outage RF refueling outage
PMO planned maintenance outage Unk unknown
OA offline/available
Fuels: Nuclear=n; Coal=c; Natural gas=g; Hydro=h ; Wind=w
Sources: Generation owners, public information and other market sources.
Market coverage
Platts provides a detailed Data Submission Guide specifying the
information it collects in its North American gas and electricity price surveys. weekend and into this week. Production basin points also saw
The guide is available at www.platts.com. From the home page, follow links to gains. Cash at El Paso Natural Gas in the Permian basin tacked
either Electricity or Natural Gas and then to Methodology & Specifications.
East Gas ... from page 3
age report that excited the market Thursday, but there was no
follow-through Friday.
Benchmark Henry Hub prices rose by about 25 cents to an aver-
age in the upper $4.60s/MMBtu on ICE, but slid to a $4.57/MMBtu
low around 10 am CDT after trading in a tighter range in earlier
action.
Much of the rest of the Gulf Coast region followed that pat-
tern to retain most of Thursday’s spreads. Cooler temperatures
in some parts of the region shook up that balance. With fore-
casts for Atlanta calling for temperatures lower than seasonal
levels in the upper 80s, demand in that part of the world fell
slightly and sapped Southern Natural Gas prices.
SoNat claimed an average that was about 20 cents higher
than that posted Thursday for a 2-cent discount to Henry Hub
after it had carried a moderate premium earlier in the week.
Central Gas ... from page 5
aging in the mid-$4.40/MMBtu level, while the Carthage Hub
reached the mid-$4.50s/MMBtu, up from Thursday averages of
about $4.18/MMBtu and $4.30/MMBtu, respectively.
Southern Star Central failed to keep up with gains seen at most
other points, climbing to an average in the upper $4.20s/MMBtu,
around 15 cents above Thursday levels. Across most points in the
Midcontinent, traded volumes retreated sharply from Thursday’s
levels, with the Natural Gas Pipeline Co. of America’s Texok zone
falling about 131,400 Mcf to 536,300 Mcf as the cash price average
stopped just shy of the $4.50s/MMBtu on ICE.
Volumes rose about 30,000 Mcf at Panhandle Eastern Pipe
Line to 558,200 Mcf. Panhandle also saw its average rise to close
to $4.40/MMBtu on ICE, shrugging off a $4.29/MMBtu low seen
West Gas ... from page 7
including prices at Southern California Gas-Ehrenberg in Arizona,
where temperatures near 110 degrees were expected over the
on about 15 cents to average in the low $4.30s/MMBtu on ICE.
Prices at EP-San Juan saw about the same increase.

CFTC Commitment of Traders Report for week ended July 13

long short net position net position change in % market % market
positions positions last week overall positions share share last week
Producers/merchants/processors/users 106,050 119,005 52.88% short 54.75% short 1.31% 28.05% 29.02%
Swap dealers 169,086 32,748 83.77% long 84.88% long 6.31% 25.15% 24.8%
Money managers 83,983 213,827 71.8% short 69.5% short 5.05% 37.11% 37.03%
Other reportables 25,812 51,935 66.8% short 75.51% short 11.11% 9.69% 9.14%

Source: CFTC. For detailed information regarding the categories of traders listed in this table, please see the CFTCs explanatory note at:

www.cftc.gov/ucm/groups/public/<\@>newsroom/documents/file/disaggregatedcotexplanatorynot.pdf

9 Copyright © 2010 The McGraw-Hill Companies

 Energy Trader
In The News
NYMEX August crude slips 61 cents on equities
NYMEX August crude settled 61 cents lower at $76.01/bar-
rel Friday in reaction to negative economic news and lower
equity values.
ICE September Brent settled 72 cents lower at $75.37/b, and
the notional NYMEX September crude-ICE September Brent
spread was pegged at plus $1.01/b, up sharply from Thursday’s
settlement at plus 71 cents/b.
NYMEX August RBOB settled at $2.0486/gal, down 1.21
cents, while August heating oil settled 70 points lower at
$2.0113/gal.
The petroleum complex opened lower in follow-through
trading from the overnight session as burgeoning crude oil and
refined product stocks weighed down on futures market prices.
Additionally, lower equities markets in Asia and Europe pres-
sured US markets lower from the opening bell.
August crude futures traded down to their lows for the day
at $75.25/b, down $1.34/b, at midday, establishing a daily
$1.55/b trading range.
At about the same time, August RBOB futures tumbled to
their lows for the day at $2.0258/gal and heating oil also slid to
its low of $1.994/gal.
A minor short-covering rally pared much of these losses head-
ing into the close, leading to each contract’s settlement price.
The Dow Jones Industrial Average opened lower and con-
tinued to fall throughout the day, hitting 10,123, down 237
points, when the NYMEX futures market settled. At the same
time, the S&P 500 lost 28 points in value to hit 1,068 at the
NYMEX settlement.
The equities markets were hit by a slew of weaker-than-
expected earnings reports and economic news all week, but the
big mover Friday was the release of the University of Michigan’s
Consumer Sentiment Index for July at a one year low of 66.5,
when expectations were of 74.5. The previous month’s index
had been 76.
“Equity market swings continue to dictate market sentiment
for crude oil, as the economic story remains central to both
markets, with no indication that the tight correlation estab-
lished over the past two years is about to break down,” said Citi
Futures analyst Tim Evans in a report.
The August-September crude spread was pegged at minus 37
cents/b, tighter than Thursday’s settlement at minus 43 cents/b.
— Jeff Kerr
Late-week NYMEX rally sparks basis activity
A steep climb by the August NYMEX gas futures contract
late last week gave a kick to basis markets after a stagnant few
days, prompting buyers to take advantage of low prices amid
weak fundamentals.
Thursday’s 28-cent run-up helped lift the NYMEX to an
10
Monday, July 19, 2010
11.7-cent gain for the week, spurring a sharp downward turn in
western basis markets. Pacific Gas & Electric’s city-gate August
basis fell 11.25 cents, while Southern California Gas fell 8 cents.
A rise in the Baker Hughes rig count kept the front of
the curve under bearish pressure, a western basis trader said.
However, low prices prompted buyers to come out and bargain-
hunt for winter packages late in the week.
Northwest Pipeline-Rockies prompt-winter dropped just a
half-cent, vs. the Rockies August basis’ 10.25-cent loss. El Paso-
San Juan prompt-winter was also down a half-cent.
AECO-NIT in Alberta continued to reflect NYMEX move-
ment, dropping 14 cents on the week.
Winter packages also got a leg up as in the Northeast as
Eastern gas storage stockpiles fell below year-ago levels, leading
to Thursday’s NYMEX spike. With unseasonable heat expected
at least through the end of the month and near-term cash
strength slowing the pace of injections, front-of-the-curve val-
ues got a boost.
Transcontinental Gas Pipe Line’s zone 6-New York August
rose 2 cents last week.
In the Upper Midwest, forwards markets were able to ignore
the net gain on the August contract as significant cash strength
supported front-month basis. Bullish weather forecasts and rela-
tively modest storage levels provided further upside support.
The Chicago city-gates August rose three-quarters of a cent
last week, while the Michigan Consolidated city-gates August
gained 1.25 cents.
Midcontinent basis remained largely immune to the NYMEX
movement as similar cash strength to the Midwest prompted
curves to remain slightly positive. Houston Ship Channel
August basis rose three-quarters of a cent and Panhandle Eastern
Pipe Line August picked up 1.5 cents.
Downstream weakness in the Southwest did drag on West
Texas basis somewhat, pulling El Paso-Permian Basin August
down 1.75 cents. — Samantha Santa Maria and Joshua Starnes
EIA: GHG bill would boost power prices 4%-9%
The Energy Information Administration on Friday said that
while imposing economywide limits on greenhouse gas emis-
sions would raise energy prices, providing utilities with free
emission allowances would limit the effect on electric and natu-
ral gas consumers’ bills.
In its analysis of The American Power Act, a proposal to
impose a carbon dioxide cap-and-trade system on most of the
US economy, EIA said the plan, which was unveiled in May
by senators John Kerry, a Massachusetts Democrat, and Joseph
Lieberman, a Connecticut Independent Democrat, would increase
the need for new electricity capacity over the next 25 years.
Electricity prices in most cases under the Kerry-Lieberman
proposal would range from 9.4 to 9.8 cents/kWh in 2020, or 4%
to 9% above current projections, EIA said.
The draft bill would cap the power sector emissions starting
in 2013 and would create an emissions allowance market to aid
Copyright © 2010 The McGraw-Hill Companies
 Energy Trader
utilities’ compliance. It sets reductions of 17% below 2005 levels
by 2020, 42% by 2030 and 83% by 2050.
Other industrial emission sources would also be subject to
emission caps.
Regulated utilities or local distribution companies would
receive a large share of free tradable emissions allowances while
oil refineries would buy allowances linked to the market price.
“The analysis shows that the free allocation of allowances
to electricity and natural gas distributors significantly dampens
impacts on consumer electricity and natural gas prices prior to
2025, after which it starts to be phased out,” EIA said.
By 2025, electricity prices under the Kerry-Lieberman approach
could range from 12.1 cents to 14.5 cents -- 18% to 42% above
current forecasts -- in most scenarios analyzed, EIA said.
“Average impacts on electricity prices in 2035 are substan-
tially greater, reflecting both higher allowance prices and the
phase-out of the free allocation of allowances to distributors
between 2025 and 2030,” EIA said.
The Kerry-Lieberman plan would not only force a change
in the nation’s electricity mix to lower-emission generation but
also “significantly increase the total amount of new electric
capacity that must be added between now and 2035,” EIA said.
“This is due to the retirement of many existing coal-fired
power plants that would otherwise continue to operate beyond
2035,” the agency said.
But the Kerry-Lieberman plan may never be considered
by lawmakers. Senate Majority Leader Harry Reid, a Nevada
Democrat, said last week that he plans to bring a narrower ener-
gy and climate change bill— one that only targets power sector
carbon emissions — to the full Senate at the end of July.
Carbon allowance prices would stay below price ceiling
In terms of CO2 allowance prices under the cap-and-trade
system, the study found that prices would remain below the
price ceiling, reaching $32 per metric ton in 2020 and $66 per
metric ton in 2035. That calculation assumes the availability of
low-cost emissions offsets, as well as low- and zero-carbon elec-
tricity generation technologies.
Prices could be higher or lower, the study stated, depending
on more extreme scenarios involving offsets and technology
costs. The Kerry-Lieberman bill allows entities to purchase a
total of 2 billion metric tons of CO2 equivalent of offset credits
annually, generated from GHG reduction projects at home and
abroad, to meet compliance obligations.
Offset credits should put downward pressure on CO2 allow-
ance prices, the study noted, as would technological break-
throughs for key low-emissions technologies, including nuclear,
fossil fuels with carbon capture and sequestration, and renew-
able energy.
Regulated entities must hold allowances or offset credits to
cover their past year’s GHG emissions. Like in any cap-and-trade
system, a carbon price is the key incentive for polluters to cut
their emissions.
Estimates vary on the actual price level above which entities
begin to reduce their pollution by reducing output or investing in
11
Monday, July 19, 2010
cleaner technologies. The EIA study did not address this matter.
A recent study by two Rice University researchers looked at
the impact of carbon prices on coal-fired power plants, a major
source of GHG emissions. The Rice study found that a carbon
price of about $30 per metric ton will close 10% of coal gen-
erator capacity, while $45 per metric ton results in a shutdown
of 90%. — Cathy Cash and Geoffrey Craig
Drilling cuts, weather trim Canada storage levels
A reduction in gas drilling activity and unusual weather pat-
terns across Canada so far this year are largely to blame for gas
storage levels that have dropped below year-ago levels, accord-
ing to industry officials and analysts.
But despite the sluggish pace of injections and no rebound
expected anytime soon, sources insist there is no cause for con-
cern and are confident that storage will be back at full capacity
this fall, ahead of the peak winter demand season.
“Gas storage tends to fill early each year, and that requires
operators to consider shutting in gas supply in the fall due to a
lack of market,” said Bill Gwozd, Ziff Energy’s vice president of
gas services. “Consequently, it is not a big deal whether opera-
tors are slightly ahead or behind the past year as they’ll be full
prior to Halloween.”
During the first quarter of this year, storage inventories consis-
tently outpaced year-ago levels by double-digit percentages, accord-
ing to the Canadian Enerdata Gas Survey. Once the refill season
began, that surplus began to erode due to smaller weekly injections
than in the comparable year-ago period. The surplus flipped to
a deficit during the week of June 18, when Enerdata estimated
nationwide inventories of 430.4 Bcf — 1.4 Bcf below 2009 levels.
The trend has continued in recent weeks, with storage stocks
for the week ending July 9 totaling 470.4 Bcf, compared with
484.9 Bcf for the same week of 2009.
“It has been really warm in eastern Canada, which has a lot
of the same weather as the northeastern US,” said Ralph Glass,
vice president of operations and chief economist with Calgary-
based AJM Petroleum Consultants. As a result, gas demand for
power generation has increased.
In addition, Glass said a decline in conventional drilling
activity has made less gas available for storage this spring and
summer. “Most of the drilling focus in western Canada is for oil
because of the price,” he said. “The economics for gas are tough.”
But Glass stressed that weekly storage additions in Canada
“aren’t that significant” to the market like they are in the US,
when the Energy Information Administration’s Thursday report
often moves gas prices immediately. And he said the downturn
in Canadian injections could be due to a “glitch in the timing
in what [capacity] is available and what is being used.”
A regional gas market source agreed, saying lower storage
injections “don’t seem to be impacting anything ... prices are
still horrible.”
Another market source said storage levels in some areas were
higher than normal coming out of the past winter because the
Copyright © 2010 The McGraw-Hill Companies
 Energy Trader
weather was so mild, leaving less room for gas to be injected
once the refill season kicked off. “So from a western basis, there
was a lot less to fill up,” the source said. “We aim to keep injec-
tions steady throughout the year.”
Meanwhile, higher storage injections are not expected any-
time soon. “And if it happens to get hot in the West, then defi-
nitely not,” the source said. — Leticia Vasquez
Spectra to buy Bobcat storage, up capacity
Spectra Energy has agreed to buy the Bobcat Gas Storage
salt-dome facility in Louisiana from Haddington Energy Partners
and GE Financial Services for $540 million, Houston-based
Spectra said last week.
Spectra said it also plans to invest another $400 million to
$450 million in the facility through 2015 to expand its total
working gas capacity to 46 Bcf.
Bobcat’s current owners in December filed with the Federal
Energy Regulatory Commission for authorization to increase the
capacity by 9.3 Bcf to 48.9 Bcf.
“Bobcat’s strategic location in the Gulf Coast and its inter-
connection with five major interstate pipelines, including our
Texas Eastern Transmission pipeline, provides customers with the
advantage and flexibility to access all the major markets in the
US,” Spectra President and CEO Greg Ebel said in a statement,
adding that the project is part of Spectra’s plan to spend about $1
billion annually in growth capital through at least 2014.
Once expanded, Bobcat will increase Spectra Energy’s total
North American storage capacity to about 340 Bcf. Assuming
regulatory approvals, the transaction is expected to close before
year’s end. — Carla Bass
FERC OKs pipe expansions to serve LNG site
Two pipeline projects designed to feed the Southeast market
with regasified supplies from the Gulf LNG Clean Energy ter-
minal near Pascagoula, Mississippi, secured approval from the
Federal Energy Regulatory Commission on Thursday.
In a joint application, Florida Gas Transmission and
Transcontinental Gas Pipe Line proposed the Pascagoula
Expansion Project to connect the liquefied natural gas termi-
nal with their jointly-owned Mobile Bay Lateral via a 16-mile,
26-inch-diameter pipeline. The new pipe would increase capac-
ity by 810,000 Dt/d and cost $59 million — with Transco on
the hook for $34 million and Florida Gas for $25 million.
Both the terminal and pipeline are expected to be in service
in the fall of 2011.
In a separate application, Florida Gas proposed extending
the Mobile Bay Lateral by about 9 miles to Grand Bay, Alabama,
where it would connect with the Pascagoula line. The new sec-
tion would provide about 342,00 Dt/d in new capacity and cost
$34 million.
Angola LNG, the sole supplier to the import terminal, signed
20-year precedent agreements at negotiated rates for all of the
12
Monday, July 19, 2010
firm capacity on the pair of expansions.
Transco proposed incremental rates that incorporate the cap-
ital structure and rate of return underlying an earlier approved
settlement.
Florida Gas proposed using its existing Western Division
system rates as recourse rates for its share of capacity. The com-
pany told FERC it would roll the costs of both projects into its
existing rates in its next general rate proceeding.
Seminole Electric Cooperative expressed concern about
Florida Gas’ rolled-in rate proposal, fearing construction overruns
would lead to higher costs for shippers on the system. FERC said
the concerns were unfounded based on 10-year projections for
$121 million in revenue and $92 million in cost of service.
The Gulf LNG Clean Energy terminal, currently under
construction, will have a peak sendout capacity of 1.5 Bcf/d.
Operator El Paso will hold a 50% stake, while Houston-based
investment firm Crest Group will own 30% and Angola’s state-
owned Sanangol will own 20%. — Meghan Gordon
Gas industry groups blast energy oversight bill
A bill approved Thursday by the House Natural Resources
Committee that would reform government oversight of onshore
and offshore energy development is drawing criticism from
industry officials who say it will increase their costs and create
uncertainty in the leasing process.
The Consolidated Land, Energy and Aquatic Resources Act,
would be “a significant overreach” if the legislation were to
become law, Dan Naatz, vice president of federal resources for
the Independent Petroleum Association of America, said Friday.
Naatz said the bill, which calls for a major reorganization in
the management of both federal offshore and onshore energy
policy, “will create new layers of bureaucracy” for energy pro-
ducers. “Broadly, the legislation is going to make both onshore
and offshore leasing more expensive, increase uncertainty in the
leasing process and implement a Washington-down approach to
federal land management,” he said.
“The biggest objection is that in the name of trying to
address the situation in the Gulf of Mexico with the Deepwater
Horizon incident, they passed legislation on a variety of issues
for the onshore and offshore,” Naatz maintained.
He said the bill, which was introduced last year, attracted
little attention until the April 20 explosion of the BP-operated
Deepwater Horizon rig and the resulting oil spill.
The bill, which now makes its way to the full House,
includes an amendment offered by Representative George
Miller, Democrat-California, that — while not mentioning BP
by name — is clearly structured to punish the company for the
Macondo well blowout as well as safety violations at refineries
and other facilities.
In addition, the measure would remove onshore oil and gas
leasing decisions from the Bureau of Land Management and cre-
ate a Bureau of Energy and Resource Management to oversee oil
and gas leasing on the Outer Continental Shelf and on federal
Copyright © 2010 The McGraw-Hill Companies
 Energy Trader
onshore lands. The bill also would establish a Bureau of Safety
and Environmental Enforcement, which would police oil and gas
operations, and the Office of Natural Resource Revenue, which
would collect royalties from both onshore and offshore activities.
The legislation “seeks to penalize the entire oil industry for
the Deepwater Horizon spill,” according to a statement issued
Thursday by American Petroleum Institute President and CEO
Jack Gerard. If passed, the bill “would threaten American jobs,
the nation’s economy and its energy security,” he added.
“The numerous provisions that discourage US oil and natu-
ral gas development have the potential to drive investment out
of the United States, killing US jobs and harming our econo-
my,” Gerard asserted.
Representative Cynthia Lummis, a Republican from
Wyoming who as a member of the Natural Resources
Committee voted against the CLEAR Act, said the bill “uses the
tragedy in the Gulf as a misguided opportunity to impose job-
killing energy policies on Americans.”
Lummis, who offered an unsuccessful amendment to strip
out the onshore provisions of the bill, said “now is not the time
to make dramatic policy changes that make American energy
more difficult to produce, on and offshore, from traditional and
nontraditional sources.”
But Representative Diana DeGette, a Colorado Democrat who
also sits on the committee, praised the legislation, especially a
provision to require the disclosure of chemicals used in hydraulic
fracturing of drill sites on federal lands. DeGette is co-sponsor of
the Fracturing Responsibility and Awareness of Chemicals Act,
which calls for the federal regulation of fracking and the disclo-
sure of the chemical content of fracking fluid in all US wells.
Dave Alberswerth, senior policy adviser of The Wilderness
Society, said the legislation is “a comprehensive bill that con-
tains numerous provisions that we are strongly supportive of.”
The legislation goes beyond reforms to the federal bureaucra-
cy overseeing energy development instituted by Interior Secretary
Ken Salazar, who recently announced the reorganization of the
Minerals Management Service into the newly renamed Bureau of
Ocean Energy Management, Regulation and Enforcement.
“Salazar went as far as he could go administratively,”
Alberswerth said. “The MMS was never created by statute. Other
federal mineral management agencies, such as BLM, were cre-
ated by statute and therefore can only be reformed through the
passage of new federal legislation,” he added. — Jim Magill
API: Reform provision will hurt US energy firms
Lobbyists for US-based multinational energy companies plan to
fight a provision in the Congress-passed financial reform bill requir-
ing them to publicly disclose how much they pay foreign govern-
ments for access to their oil, gas and other mineral resources.
The measure will require the firms to disclose in an annual
report any payments made to global governments for com-
mercial projects, including exploration, extraction and export,
within that government’s jurisdiction. Those payments include
13
Monday, July 19, 2010
taxes, royalties, fees, production entitlements and bonuses.
The measure is opposed by the American Petroleum
Institute, the US Chamber of Commerce and the National
Association of Manufacturers. “We feel like this will really
put US oil and natural gas companies at a competitive disad-
vantage,” said Misty McGowen, director of federal relations
with API.
In a May 4 letter to Senate Banking Committee Chairman
Chris Dodd, a Democrat from Connecticut, and Ranking
Member Richard Shelby, a Republican from Alabama, API
President and CEO Jack Gerard wrote that the association “sup-
ports the goals” of the provision but is opposed to the “unilat-
eral approach to revenue disclosure.”
“API feels that requiring only US-listed extractive compa-
nies to disclose revenues creates a competitive disadvantage for
these companies in the global energy marketplace, undermines
transparency efforts and represents a significant departure from
historic SEC reporting requirements,” Gerard wrote.
Despite those protests, Senators Benjamin Cardin, a
Maryland Democrat, and Richard Lugar, an Indiana Republican,
included the disclosure measure in the financial reform legisla-
tion, which passed the Senate Thursday and which President
Barack Obama is expected to sign into law soon.
In a statement Thursday, Cardin said the provision “will
add stability to markets through greater information and pre-
dictability and help protect investors from undue risks associ-
ated with corrupt or unstable governments in oil-rich or min-
eral-wealthy countries.” Cardin said “secrecy fosters instability,
corruption and greater risk,” and that the measure would be a
boost to energy security.
“We now have the tools to help people in resource-rich
countries hold their leaders accountable for the money made
from the oil, gas and minerals,” he said.
The measure, which is Section 1502 within the miscel-
laneous provisions section of the sweeping reform legisla-
tion, contains key elements of the Energy Security Through
Transparency bill, which Cardin and Lugar previously intro-
duced in September 2009.
The Cardin-Lugar measure was endorsed by a number of
human rights and global development organizations, including the
Revenue Watch Institute and the Publish What You Pay coalition.
In a statement Thursday, Karin Lissakers, RWI’s director, said
the provision should become universalized standards adopted
by the International Accounting Standards Board. Lissakers
said the Hong Kong Stock Exchange this year adopted a similar
reporting standard. — Brian Scheid
Goldman scales back gas forecast ... from page 1
58.1 Bcf/d based on robust drilling activity in shale plays.
“We still factor in a slightly declining production path over
the rest of 2010, as we continue to expect some response to
production from the lower conventional rig counts,” Goldman
noted. “However, as prices begin to move higher, we expect
Copyright © 2010 The McGraw-Hill Companies
 Energy Trader Monday, July 19, 2010

production to respond accordingly and return to an increasing
long-term trend.”
With that domestic output growth, “we now expect US
liquefied natural gas imports will need to remain restrained
in order to keep the US natural gas market balanced” through
2011, Goldman said. “With the European markets markedly
higher than the US market this spring, we believe a substantial
amount of this LNG can be absorbed.”
The UK August futures contract — a key indicator of wheth-
er LNG cargoes are likely to be directed to the UK — showed a
$2.483/MMBtu premium to the equivalent Henry Hub contract
on Friday, which backs up the economic case for sending car-
goes to Europe.
However, “Europe and Asia will likely not be able to absorb
the entire surplus created by the increased production in the
US,” Goldman predicted. “Consequently, we expect that global
liquefaction capacity utilization rates will likely need to remain
subdued going forward. ... Further, we believe that as global natu-
ral gas prices fell in Q2 ‘10, LNG producers responded in a similar
fashion and reduced liquefaction activity.” — Staff Reports
Judge suspends PJM, Tower trial ... from page 1
with Judge Norma Shapiro presiding over the case. The parties
expect the trial to last up to three weeks.
The claim arose out of the default of one of Tower Research’s
affiliated companies -- Power Edge -- in the PJM financial trans-
mission rights market in 2007. The company failed to cover its
losses and owes PJM about $51 million. PJM alleges that Power
Edge’s affiliates, as well as parent company Tower Research and
its managing director Mark Gorton, should be held liable for the
loss. PJM also alleges that Power Edge fraudulently transferred
money to its affiliated companies to avoid paying PJM. In addi-
tion, PJM claims that the managing director of the companies,
Gorton, engaged in activities violating the Racketeer Influenced
and Corrupt Organizations Act, or RICO.
The judge had separated the trial into two parts, with the first
dealing with PJM’s first two claims and the second dealing with
the RICO claim against Gorton. PJM contends that the question of
liability of the affiliated companies should be decided by the jury,
while Tower Research wants this question to be decided by the
judge, according to court documents. — Milena Yordanova-Kline

Monday, July 19, 2010

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