![](media/image1.jpeg){width="8.75in" height="3.6055555555555556in"}U.S.
DEPARTMENT OF ENERGY

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### May 17, 2004

**Electricity**

**Associated Electric's Thomas Hill Center in Missouri Tripped Offline
Over Weekend** The coal-fired generator that tripped Saturday has since
recovered and all three units are now running near 1030 MW early Monday.

Genscape Weekend Update, May 17, 2004

<http://www.aeci.org/generation/thomashill/thill.html>

**Nuclear Units Change in Status Over Weekend**

  ----------- -------------- ----------------- ------ ----------------------
  Operating   Nuclear Unit   Utility           MW     Reason for Outage

  0%          Turkey Point 4 Florida P&L       693    Feedwater regulator
                                                      valve failed

  0%          Point Beach 2  Wisconsin Energy  517    Diver in intake system

  30%         Vogtle 2       Southern Co       1215   Refueling

  45%         Clinton 1      Amergen           930    Restart from
                                                      maintenance

  100%        Arkansas       Entergy           836    Refueling
              Nuclear 1                               

  100%                                                

  100%        Surry 1        Dominion          800    Completed transformer
                                                      maintenance

  100%        Braidwood 2    Exelon            1150   Unknown

  100%        Peach Bottom 3 Exelon            836    Adjust rod position
  ----------- -------------- ----------------- ------ ----------------------

Sources: Bloomberg, Reuters

<http://biz.yahoo.com/rc/040517/utilities_wisconsinenergy_pointbeach_2.html>

<http://biz.yahoo.com/rm/040517/utilities_fpl_turkeypoint_3.html>

**NERC to Identify 20 More Violations that Led to Aug 14 Blackout**

The North American Electric Reliability Council will identify twenty
additional violations of its power transmission standards that took
place leading up to the Aug 14, 2003, blackout in an upcoming report,
said Michehl Gent, president and CEO of the group. The industry-led
group sets electric reliability standards for North America, and depends
on the voluntary compliance of its members. NERC is nearing completion
of its own technical report on the blackout to compliment the final
report issued by the US-Canada task force, which found several
violations of NERC standards. At a workshop Friday at the US Federal
Energy Regulatory Commission on reliability standards, attended by three
of the four FERC members\--Chairman Pat Wood, Joe Kelliher and Suedeen
Kelly\--Gent gave an update of NERC\'s effort to enhance its reliability
standards, which have been criticized for being too vague.
[http://www.platts.com/Electric%20Power/News/2491621.xml?S=n](http://www.platts.com/Electric Power/News/2491621.xml?S=n)

**Wind Energy Picks Up Steam** Colorado wants to get on the fast track
with wind energy starting Friday with the dedication of the 162-megawatt
Colorado Green wind farm, capable of supplying power to 75,000 homes.
Gov. Bill Owens has proclaimed Friday \"Colorado Wind Energy Day\" to
commemorate the dedication. Xcel also has plans to add another 500
megawatts of wind energy in Colorado by 2006 - catapulting the state to
No. 3 among wind energy states in the nation. Currently, it ranks No. 8
with a total of 240 megawatts of wind power. Although the Lamar wind
farm will be dedicated today, it has been operating commercially since
the last week of December 2003 to take advantage of a production tax
credit that expired Dec. 31. On Tuesday, the U.S. Senate overwhelmingly
passed a bill to extend the credit for three years. The House is likely
to pass the provisions next month, paving the way for the credit to be
implemented by summer. Including the tax credit of 1.8 cents per
kilowatt/hour, electricity from wind at 2.8 cents to 3.5 cents per kWh
is cheaper than either natural gas at 5 cents to 6 cents per kWh or coal
at 4 cents to 5 cents per kWh.
<http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_2884950,00.html>

**Progress Begins on 400 MW Wind Farm**

The Western Wind Energy Corporation announced the formal launch of the
400 MW Kingman wind power project located 42 line miles southeast of the
Hoover Dam in Arizona. The company began formal engineering, feasibility
and environmental assessment of the Kingman Project and will be making a
formal presentation to the Phoenix office of the Western Area Power
Administration (\"WAPA\") on June 2, 2004.
<http://www.intellisearchnow.com/branding/188/contentreader.html?http://www.solaraccess.com/news/story?storyid=6738>

**Michigan Utility Officials Address Blackout Possibility with Cautious
Optimism** The possibility of another blackout this summer exists, but
those who oversee Michigan\'s electric supply say they are \"cautiously
optimistic\" the lights will stay on this summer. A variety of
improvements in monitoring and operating the state\'s electrical grid
have been implemented since a blackout, which started in Ohio, left 50
million people, including 2.3 million Michigan residents, sitting in the
dark on Aug. 14, 2003. But there are concerns on two fronts: The federal
government has not issued mandatory standards for the nation\'s
electrical grid, and Detroit Edison can\'t yet guarantee it can deliver
all the electricity it needs to meet peak load demands during the
summer.
[http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp%5EZikoqprmRTif%216C%29bfej%5B%21](http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8knpp^ZikoqprmRTif!6C)bfej%5B!)

# Great Plains Energy Considers Building Two Power Plants along Missouri River Great Plains Energy says electricity from two power plants it wants to build along the Missouri River would be used mainly in the Kansas City area. Great Plains, the holding company of Kansas City Power & Light, has applied for permits to build the power plants north of Weston. In 2001, it signed a preliminary agreement with a contractor to construct the plants, one in Kansas and the other in Missouri. Soon after, the company said the plants were on the back burner, so opponents say they were shocked last year when it leaked out of a closed U.S. Army Corps of Engineers meeting that Great Plains was moving ahead with both plants. The two plants, at 850 megawatts each, could generate enough electricity for at least 1.2 million homes. Most of that electricity would be sold on the wholesale market \-- outside the Kansas City area \-- officials said last year. [**http://www.energycentral.com/centers/news/daily/article.cfm?aid=4859945**](http://www.energycentral.com/centers/news/daily/article.cfm?aid=4859945)

# High Coal Price Could Bring Summer Energy Crunch With the price of coal chasing oil and natural gas upwards, some energy industry analysts and experts believe there could be a crunch this summer when there is high demand for electricity. Average spot prices for northern and central Appalachian coal on Friday were around \$58 per ton, more than twice the price last August. "The price now is very high, at or near record levels,\" said Jim Thompson, editor of Coal and Energy, an industry newsletter based in Knoxville, Tennessee. Reuters, [**http://www.energycentral.com/centers/news/daily/article.cfm?aid=4860931**](http://www.energycentral.com/centers/news/daily/article.cfm?aid=4860931)

####### 

####### Petroleum

**Murphy\'s Louisiana Crude Unit Out Until Next Week**

Murphy Oil Corp. said on Monday a crude unit that was damaged by a fire
on Friday at its refinery in Louisiana would be down until next week.
The fire was caused by a failed seal on a crude unit pump at the 125,000
barrels per day refinery. There were no injuries from the fire. \"It
won\'t be up until next week,\" said Murphy spokeswoman Mindy West. She
declined to say what day next week the unit would return. Reuters, 1404
May 17, 2004

**Gasoline Unit Up as Planned at N.J. Hess Refinery**\
The gasoline making unit at the Amerada Hess refinery in Port Reading,
New Jersey, came back as planned over the weekend, a company spokesman
said Monday. The fluid catalytic cracker, which has a capacity of 62,000
barrels per day, went into emergency shutdown on Friday after a brief
power outage. \"The unit went back up on Saturday,\" said Hess spokesman
Jay Wilson. <http://biz.yahoo.com/rc/040517/energy_refinery_hess_1.html>

**Oil Prices and Petroleum Products Remain High**\
Crude oil futures traded at \$41.47 a barrel, still near the overnight
record of \$41.85, the highest level crude has reached since the New
York Mercantile Exchange introduced oil futures in 1983. Gasoline prices
also jumped to another record, amid persistent concerns about gasoline
supply and Middle East unrest. Instability in the Mideast has fed fears
of possible disruptions of oil supplies from the region, traders said.
<http://biz.yahoo.com/rb/040517/markets_stocks_11.html>

#### Iraq to Resume Full Basra Oil Exports Soon Full Basra terminal oil exports are expected to resume in the next few days as repairs on a sabotaged pipeline near completion, officials and industry sources said on Monday. Flows from Basra, Iraq\'s main export point, were still running one-third below normal at around 1.1 million barrels per day, an international shipping agent said. Oil officials, who had expected to resume normal flows four days after the attack on May 8, are refraining from committing to a new date, but say work to clear the main 47-inch pipeline from dirt and sand is almost complete. [**http://biz.yahoo.com/rm/040517/energy_iraq_south_2.html**](http://biz.yahoo.com/rm/040517/energy_iraq_south_2.html)

#### 

#### 

#### Natural Gas 

**US Natural Gas Production on Steady Downward Path: Analyst**

US natural gas production \"is heading firmly downwards\" despite
\"massive\" increases in drilling activity, analyst Raymond James
reported Monday. Publicly-traded US exploration-and-production companies
\"are now showing a

4.2% \[year-over-year\] gas-production decline,\" Raymond James analyst
Marshall Adkins said. \"As before, we see no significant near-term
catalysts to alter the declining supply picture, and therefore price
rationing remains the only

viable option to bring the market into equilibrium.\" However, while the
rate of production decline appears to be accelerating, \"we would
caution that there appears to be substantial volatility in these
numbers,\" Adkins said.

[http://www.platts.com/Natural%20Gas/News/8079584.xml?S=n](http://www.platts.com/Natural Gas/News/8079584.xml?S=n)

**FERC\'s Kelliher says No LNG OKs Until Final Report**

Federal regulators will probably not approve any liquefied natural gas
terminal projects until a final safety report is completed, FERC
Commissioner Joseph Kelliher said on Monday. The Federal Energy
Regulatory Commission said in a report on Friday they have no scientific
models to accurately predict what would could happen if an accident or
an act of sabotage occurred involving a tanker carrying LNG. The
preparer of the report suggested FERC use another model to estimate what
would happen in an accident. The public has until May 28 to comment on
the report and Kelliher said he did not know when FERC would finalize
its report.

Reuters, 1435 May 17, 2004

####### 

####### Other

**Coal is Back, Cleaning Up its Act** With the price of oil and natural
gas climbing , the alternative fuel grabbing the most attention and the
bulk of federal research dollars is the same one that\'s been the
backbone of U.S. electricity needs for a century \-- coal. After a
decades-long slump, coal is once again a top priority among energy
producers who see it as an answer to the nation\'s long-term needs \--
this despite its nasty reputation as a major contributor to pollutants.
With about a quarter of the world\'s reserves, the United States is to
coal what Saudi Arabia is to oil. Industry analysts say there\'s enough
domestic coal to last at least 250 years at current production levels.
[http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BB2DCEAC2%2DE996%2D4AF3%2DBA1E%2D1C16589FEEC5%7D](http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid={B2DCEAC2-E996-4AF3-BA1E-1C16589FEEC5})

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (5        | Ago**     | Ago**      |
|                               | /17/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 41.55     | 38.98     | 29.07      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 6.41      | 6.14      | 5.96       |
|                               |           |           |            |
| **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