![](media/image1.jpeg){width="8.5in" height="3.5027777777777778in"}U.S.
DEPARTMENT OF ENERGY

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### July 14, 2004

**Highlights / Major Developments**

**Several Hundred Thousand Out of Power After Midwest Storms**

Thousands of homes and businesses had no electricity Wednesday in the
path of a long line of thunderstorms that stretched from Tennessee to
the Great Lakes.

Utilities around Kentucky reported about 254,000 homes and businesses
lost power during the storms, including 115,000 in the Louisville
metropolitan area, the most there since a 1974 tornado. Traffic lights
remained out Wednesday in much of Louisville. Chip Keeling, a spokesman
for Louisville Gas & Electric, said power had been restored to about
40,000 customers by Wednesday morning but some might remain in the dark
for an extended period. About 60,000 customers were blacked out in
central Tennessee, but service had been restored to about half of them
by dawn Wednesday, Nashville Electric Service reported. Some 51,000
customers were still without power Wednesday morning in Indiana, down
from a high of up to 136,000 during the storms, said Cinergy-PSI
spokeswoman Angeline Protogere. Some might have to wait until Thursday
for the lights to go on again, she said. Utilities said at least 10,000
customers lost power in Michigan.
<http://www.nj.com/newsflash/weather/index.ssf?/base/national-27/1089818663159570.xml&storylist=njweather>

**Electricity**

**Pinnacle West\'s Palo Verde 2 Reactor in Arizona Shuts**

Pinnacle West Capital Corp.\'s Palo Verde unit 2 reactor, part of the
largest U.S. nuclear power plant, shut unexpectedly this morning, said
Sheri Foote, a plant spokeswoman. Palo Verde\'s two other reactors were
operating at capacity, Foote said. Plant operators were investigating
the cause of the shutdown, which probably was not related to the problem
that closed all three units last month, Foote said. No estimate was
available for when unit 2 will resume operating. The 1,270-megawatt
reactor in Wintersburg, Arizona, normally generates enough electricity
to supply about 1 million homes.

Bloomberg, July 14, 2004

**PSEG\'s N.J. Salem 2 Nuclear Unit Shut**\
Public Service Enterprise Group Inc. said Wednesday its 1,150 megawatt
Salem 2 nuclear unit in New Jersey automatically tripped off at about 1
p.m. EDT (1700 GMT) on Tuesday due to low steam generator water level. A
spokesman for PSEG, Chic Cannon, said he could not say when the unit
would likely return to service.
<http://biz.yahoo.com/rc/040714/utilities_pseg_salem_3.html>

**Weather May Have Caused Ill. Clinton Nuke to Trip**\
AmerGen Energy Co. said its 950 megawatt Clinton nuclear unit in
Illinois automatically tripped on Tuesday possibly due to adverse
weather, the company told the U.S. Nuclear Regulatory Commission in an
event report. The company said two of the station\'s output breakers
opened at about 4 p.m. CDT resulting in the trip. At that time, a
tornado warning was in effect and storms were present in the area
surrounding the plant. Following the shutdown, the company reported a
couple of problems, including a reactor recirculation pump that did not
function properly and the activation of the reactor\'s containment
isolation about 1 a.m. CDT on Wednesday.
<http://biz.yahoo.com/rc/040714/utilities_exelon_clinton_1.html>

**Power Outage Delays Flights in Minnesota** A power outage at a
Northwest Airlines facility caused delays and cancellations for flights
Wednesday morning at Minneapolis-St. Paul International Airport.
Northwest spokeswoman Mary Stanik said there was a power failure at a
facility in suburban Eagan about 8:15 a.m. that delayed outbound flights
until around 9:30 a.m. Flights that already had taken off were not
affected, and power was restored in about 45 minutes, she said.\
<http://www.newsday.com/news/nationworld/wire/sns-ap-airport-delays,0,3065817.story?coll=sns-ap-nationworld-headlines>

**Update -- Storms in NJ Destroy Dams, Bridges, Power Lines** More
storms today could bring damaging winds and bring down damaged trees
into more power lines. In Vincentown, floodwaters surrounded several
fuel oil tanks and four fuel trucks at Allen\'s Oil and Propane on Main
Street. Steve Riddle, a company employee, said the extent of damage will
not be known until the waters recede. Divers with the U.S. Coast Guard
were sent to shut off the valves at a Vincentown oil company where a
50,000-gallon tank had broken from its moorings. At least three bridges
were washed out, and eight dams failed, and more than two dozen major
roads were closed, causing the region\'s most severe flooding in 65
years.

[*http://www.courierpostonline.com/news/southjersey/m071404a.htm*](http://www.courierpostonline.com/news/southjersey/m071404a.htm)
[*http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjczN2Y3dnFlZUVFeXk2MDYmZmdiZWw3Zjd2cWVlRUV5eTY1NTUxODMmeXJpcnk3ZjcxN2Y3dnFlZUVFeXky*](http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjczN2Y3dnFlZUVFeXk2MDYmZmdiZWw3Zjd2cWVlRUV5eTY1NTUxODMmeXJpcnk3ZjcxN2Y3dnFlZUVFeXky)

[*http://www.nj.com/newsflash/jersey/index.ssf?/base/news-9/108972085933240.xml&storylist=njflood*](http://www.nj.com/newsflash/jersey/index.ssf?/base/news-9/108972085933240.xml&storylist=njflood)

**Officials Fortify Portland, Ore.-area Power Grid to Fend Off Summer
Threats**

As the Northwest moves into the hottest, driest time of year, its main
power distributor is fortifying the transmission grid against summer
threats such as heat waves and lightning strikes that can interrupt the
flow of electricity. Experts agree that unlike the energy crisis of 2000
and 2001 \-- when the West suffered from a shortage of electricity \--
the biggest concern lies in delivering, not creating, power. The two
major blackouts of the past decade \-- the West Coast\'s in 1996 and the
Northeast\'s last summer \-- highlighted the fragility of the grids of
transmission lines that supply the nation\'s electricity. In each,
overloaded lines sagged into trees on a hot day, triggering a cascade of
power failures over thousands of square miles. For the first time since
1987, the BPA is adding power lines to the 15,000-mile Northwest grid,
which crosses Oregon, Washington, Idaho and western Montana. At the same
time, BPA has increased its tree-trimming budget to \$10.1 million a
year, a nearly fourfold increase since 1996.
<http://www.energycentral.com/centers/news/daily/article.cfm?aid=4985172>

**NRC Suspects Big Bird Droppings In Arizona Nuclear Outage Last Month**

A short circuit a few weeks ago disrupted power service in Arizona,
California, New Mexico and even Alberta, Canada. The root cause of the
outage, a preliminary report suggests, was bird droppings. The nation\'s
largest nuclear power plant tripped offline June 14, causing momentary
panic for system operators and a brief loss of power to about 65,000
Arizonans. About 35,000 customers in scattered pockets of the Tucson
area were without power for about an hour as the state\'s utilities
scrambled to \"shed load\" and prevent a disastrous regional outage. It
took a few days for the plant, which can supply 3 million homes with
power, to restart. The Western Electricity Coordinating Council,
responsible for reliability issues on the Western electric grid, reports
that \"the event began when a bird contaminated an insulator\" in the
Phoenix area.

[*http://www.energycentral.com/centers/news/daily/article.cfm?aid=4984977*](http://www.energycentral.com/centers/news/daily/article.cfm?aid=4984977)

<http://pro.energycentral.com/professional/news/power/news_article.cfm?id=4985225>

**Power Plant "Earns" \$3.8 Million for Not Producing Electricity** The
trash-burning power plant in Columbus Ohio was shut down in 1995 - but
it recently earned \$3.8 million. A federal program allows power plants
that reduce pollution levels to sell \"credits\" for the pollution they
would have produced to other power companies. The program has been
credited with reducing acid rain. Officials at the Solid Waste Authority
of Central Ohio said they have been selling pollution credits since
2000. American Electric Power recently bought the four years\' worth of
pollution credits for \$3.8 million. It can now legally release 9,552
tons of sulfur dioxide into the air from its coal-fired power plants,
many of which are in Ohio. John Remy, a spokesman for the waste
authority, said it can sell the credits until at least 2030. \"It\'s a
nice windfall for us, and the city of Columbus,\" Remy said. \"This is
money we weren\'t expecting.\" U.S. EPA spokesman John Millet said power
plants that were awarded the credits don\'t lose them, even if they shut
down. \"By closing down and not operating, they are able to turn their
allotment of pollution into credits,\" Millet said. \"Those credits turn
into a commodity.\"
[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp%5EZjimtuwvYThe%7DGJ%7Bbfej%5B%21](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp^ZjimtuwvYThe}GJ{bfej%5B!)

**Petroleum**

# Second Oil Tanker Refuses to Load at Iraq\'s Basra

A supertanker owned by a South Korean oil company has refused to load at
Iraq\'s Basra oil terminal because of security concerns, the second
Asian-owned tanker that has refused to load there this week, shipping
brokers said on Wednesday. Brokers said the SK-Corp owned supertanker
the C Champion refused to load at the terminal and had to be replaced
with another tanker owned by Tankers International that was willing to
load there. Earlier this week a Hong-Kong registered supertanker refused
to dock at the terminal citing safety and security concerns, brokers
said.

Reuters, July 14, 2004, 1351

# Natural Gas

**US FERC Erred in Asserting Jurisdiction Over Gas Gatherer: Court**

The US Federal Energy Regulatory Commission exceeded its authority in a
2002 order asserting jurisdiction over a Transcontinental Gas Pipe
Line\'s gas-gathering affiliate in the US Gulf of Mexico, the US Court
of Appeals for the District of Columbia Circuit said Tuesday. The court
remanded the order to the agency, saying that in asserting jurisdiction
over the gathering affiliate, FERC violated the Natural Gas Act, which
explicitly exempts gathering firms from its oversight.
[http://www.platts.com/Natural%20Gas/News/2386820.xml?S=n](http://www.platts.com/Natural Gas/News/2386820.xml?S=n)

[**US LNG Imports Up Again Last
Quarter**](http://www.energyintel.com/DocumentDetail.asp?document_id=126123)\
US LNG imports were up in the second quarter by 26% from same period
last year and 6.2% from the first quarter, despite some disruption in
supply from Trinidad, WGI estimates show. An almost 9% decline from
first-quarter levels in imports from Trinidad, to 1.235 Bcf/d, reflected
a combination of planned maintenance, some unplanned outages, and a
strike by workers at Atlantic LNG. Lake Charles input continued to creep
up, with increases coming from Algeria, Qatar, Oman and Malaysia. World
Gas Intelligence, July 14, 2004

**Other**

[**Coal Gasification Project Planned for Southeastern
Wyoming**](http://www.energyintel.com/DocumentDetail.asp?document_id=126201)\
While the Mideast state of Qatar proceeds with multiple natural
gas-fueled projects to turn gas-to-liquids (GTL) on a mega-scale, coal
has become the feedstock of choice for ventures using similar versions
of the Fischer-Tropsch (FT) process to achieve the same product slate in
the US and China. Oil Daily, July 14, 2004

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (7        | Ago**     | Ago**      |
|                               | /14/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 40.98     | 39.18     | 31.20      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.91      | 6.27      | 5.15       |
|                               |           |           |            |
| **Henry Hub**                 |           |           |            |
|                               |           |           |            |
| \$/Million Btu                |           |           |            |
+-------------------------------+-----------+-----------+------------+

> Source: Reuters

**This Week in Petroleum** from the Energy Information Administration
(EIA)

[*http://tonto.eia.doe.gov/oog/info/twip/twip.asp*](http://tonto.eia.doe.gov/oog/info/twip/twip.asp)

Updated on Wednesdays

**Weekly Petroleum Status Report** from EIA**\
**[*http://www.eia.doe.gov/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/wpsr.html*](http://www.eia.doe.gov/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/wpsr.html)

Updated after 1:00pm (Eastern time) on Wednesdays

**Natural Gas Weekly Update** from EIA

[*http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp*](http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp)

Updated after 2:00 pm (Eastern time) on Thursdays