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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### July 9, 2004

**Highlight / Major Developments**

**Update \-- Phoenix Escapes Threatened Blackouts** Phoenix looked set
to escape without rolling blackouts on Thursday aided by slightly cooler
than expected temperatures and the partial return to service of a key
power substation, a utility spokeswoman said. \"We\'re OK. So far so
good,\" Sheri Foote, a spokesman for utility Arizona Public Service
said, noting the partial return of one of the four key substations
serving the metropolitan Phoenix area was \"a big help.\" The city was
earlier faced with the threat of rolling blackouts with the outage at
the Westwing substation severely limiting the utility\'s ability to
bring power into the city while a forest fire burned close to a major
power line. The crisis was triggered partly by a fire at the Westwing
substation in metropolitan Phoenix area on Sunday, which resulted in the
loss of about 20 percent of the city\'s capacity to import power. The
substation was completely down on Thursday morning but one of three
damaged transformer banks was re-energized during the afternoon with
repairs completed ahead of schedule. The repairs gained back about 5
percent of the city\'s import capacity, Foote said. Foote noted that
while Thursday was typically the day when demand for power in the city
was at its greatest there was still the possibility of problems on
Friday. A forest fire near a key transmission line poses a further
threat to the utility\'s bid to keep the lights on. The Willow fire is
burning close to a key transmission line just south of Payson, around 85
miles northeast of Phoenix. Foote said the transmission line was
temporarily shut for several hours on Thursday morning while
firefighters lit controlled blazes nearby in a bid to prevent the main
fire from reaching it. The utility has received support from its
business customers with some agreeing to switch the bulk of their
manufacturing from day to night shifts, reducing demand during peak
periods, she said.
<http://biz.yahoo.com/rc/040709/utilities_apso_phoenix_2.html>
<http://kvoa.com/Global/story.asp?S=2014339>

**Electricity**

**DC Pacific Intertie Shut for Weekend**

Electricity dealers said prices in the Northwest continue to suffer some
adverse impact from the planned shutdown of the DC Pacific Intertie,
limiting the scope for exporting supplies from the region to California.
The line, which had been operating with a southbound capacity of 1,690
MW, was set to be shut on Friday morning. It will reopen with a reduced
capacity of 592 MW very late Monday and then shut again the following
Friday.

Reuters, 1446 July 9, 2004

**CA Power Plant has Unplanned Outage** The gas-fired 741 MW Unit 1 at
Ormond Beach is has had an unplanned outage. Reuters, 1446 July 9, 2004

**TVA's Browns Ferry Nuke Tripped Off Line Late Thursday**

TVA\'s Browns Ferry 2 reactor in Alabama automatically tripped off line
about 10:30 pm Thursday from full power. A spokesman at TVA said they
were looking into the reason for the shutdown. Some traders guessed
Browns Ferry 2, which they said was not really needed since the
region\'s generation supplies were already healthy, would likely return
to service within the next week.

Reuters, 1338 July 9, 2004

Bloomberg News, 1108 July 9, 2004

**Vermont Yankee 1 Nuclear Plant at Full Power, NRC Says** Entergy
Corp.'s 535 MW Vermont Yankee nuclear unit finished its ramp up to full
power yesterday. An electrical fire had shut the plant on June 18^th^.
Bloomberg News, 1121 July 9, 2004

**FERC Finalizes Market Power Rules for US Utilities**\
The Federal Energy Regulatory Commission (FERC) late on Thursday
finalized rules to prevent U.S. utilities from unfairly dominating
markets in their home service territories. The agency in April had
proposed a new way to gauge utility market power, scrapping a
decades-old \"hub-and-spoke\" method that focused on grid layout. The
new test will weigh a utility\'s ability to influence prices during peak
usage. Utilities that fail the test ultimately could lose their ability
to sell wholesale power at market-based rates and instead could have to
charge for power based on their incremental generation costs plus a 10
percent profit. \"Market-based rate authority is not a right,\" FERC
Chairman Pat Wood said in a statement. FERC will pose two tests to
decide whether utilities have market power. The first is based on a
utility control area\'s annual peak demand, and the second focuses on
seasonal market share, FERC said. Utilities that pass both tests will be
deemed free of the ability to exercise undue influence, FERC said.
<http://biz.yahoo.com/rc/040709/utilities_markets_1.html>

**SDG&E's Miguel-Mission Transmission Line Project Approved by CA PUC**
California gave final approval Thursday to the expansion of a
high-voltage transmission line into the city of San Diego, which is
expected to increase transmission of electricity from the
California-Mexico border and Arizona into southern California. SDG&E
proposed construction of a new single-circuit 230 kV transmission
circuit to address current and future overloads on existing 138 kV and
69 kV transmission lines. The proposed new and relocated transmission
circuits for the project would be installed in the existing 35-mile
SDG&E right of way between Miguel Substation and Mission Substation. The
proposed project consists of the following three principal components:
(1) installing a new 230 kV transmission circuit between Miguel and
Mission Substations, (2) relocating the existing 69 kV/138 kV circuits
on new pole structures between Miguel Substation and Fanita Junction,
and (3) modifying Miguel and Mission Substations. The proposed project
is located entirely within San Diego County and passes through the
Cities of San Diego and Santee, Marine Corps Air Station Miramar, and
unincorporated areas in the eastern portion of the county. Dow Jones &
Company, Inc., July 8, 2004.
<http://pro.energycentral.com/professional/news/power/news_article.cfm?id=4976668>
<http://www.cpuc.ca.gov/Environment/info/aspen/miguel_mission/miguelmission.htm>

#### Nevada Loses Yucca Mt. Waste Site Appeal A federal appeals court on Friday rejected Nevada\'s arguments against building a nuclear waste site in the state, but ordered the government to develop a new plan to protect the public against radiation releases beyond the proposed 10,000 years. The three-judge panel dismissed claims by Nevada that the Bush administration\'s plan to build the Yucca Mountain waste site was unconstitutional and said that actions by the Energy Department and President Bush leading up to approval of the waste site were not subject to review by the court. In a victory for Nevada, however, the court rejected the government standard that the public would have to be protected from radiation leaks only for 10,000 years. The court said the compliance period for the radiation standards would have to be developed well beyond that period. [**http://www.newsday.com/news/nationworld/wire/sns-ap-yucca-mountain,0,182230.story?coll=sns-ap-nationworld-headlines**](http://www.newsday.com/news/nationworld/wire/sns-ap-yucca-mountain,0,182230.story?coll=sns-ap-nationworld-headlines)

**Petroleum**

**ChevronTexaco and Shell Restart CA Refinery Units**

Gasoline prices in the West Coast refined products markets were largely
unchanged as refinery units restarted, but NYMEX gasoline futures
increased on Thursday, traders said. ChevronTexaco Corp. was restarting
a hydrogen-producing unit for gasoline and jet fuel production at its
273,000 barrel per day (bpd) refinery in El Segundo, California. Shell
Oil Co. completed the restart of a catalytic cracking unit at its
155,000-barrel per day refinery in Martinez, California. NYMEX gasoline
futures increased more than 5 cents because of rising demand reported by
the U.S. government. Reuters, 1714 July 9, 2004

**Tesoro to Complete Repairs on California Refinery This Week**

Tesoro Petroleum Corp. said it expects to complete repairs on a boiler
at its refinery near San Francisco by the end of this week following a
breakdown. The boiler had a mechanical problem that forced a shutdown
Sunday afternoon.

Bloomberg News, 1640 July 8, 2004

**OPEC and Saudi Oil Minister Say Aug Output Increase to Go Ahead**

The Organization of the Petroleum Exporting Countries (OPEC) will go
ahead with a planned increase to existing production limits on August 1,
group president Purnomo Yusgiantoro and Saudi Oil Minister Ali al-Naimi
said on Friday. Output will be increased by 500,000 barrels a day.
Yasgiantoro also added that OPEC ministers will discuss at a July 21
meeting whether to increase the group\'s \$22 to \$28 a barrel target
price band, a reference basket of seven crudes.

Reuters, 0110 July 9, 2004

Bloomberg News, 0538 July 9, 2004

**Oil Heads for Biggest Weekly Gain in 2 Months on Supply Concern**

Crude oil was up 4.1 percent this week, headed for the biggest weekly
gain in two months, amid record U.S. demand and concern about possible
oil-supply disruptions in Asia, Africa and the Middle East. Oil
inventories on the U.S. East Coast fell 14 percent last week to a
five-month low amid the highest U.S. gasoline demand on record, Energy
Department figures showed.

Bloomberg News, 1435 July 9, 2004

# Total Maintains Notice of Missed Nigerian Oil Deliveries

# Total SA said it has yet to lift a notice to customers that Nigerian oil deliveries may be missed, a day after it ended a six-day shutdown of output from Africa\'s biggest oil producer. 

# Bloomberg News, 0558 July 9, 2004 

# 

# BP to Shut Sulfur Unit at Texas Refinery for 24 Hours July 17

# BP plans to shut a distillate desulfurization unit for 24 hours next week at its refinery in Texas City, Texas, to inspect a boiler, according to the Texas Commission on Environmental Quality. The company plans to depressurize and purge the unit for an inspection of a stripper reboiler furnace on July 17, according

# to a report BP filed with the state commission. 

# Bloomberg News, 1135 July 9, 2004

#### 

#### 

#### N.Y. Gasoline Rallies 6.2% This Week Amid Refinery Concerns

Gasoline futures in New York had the largest weekly gain in two months
amid speculation that U.S. refiners aren\'t keeping pace with record
motorist demand. Bloomberg News, 1539 July 9, 2004

# Natural Gas

Nothing to report.

**Other**

# President George W. Bush on Supply, Demand and His Energy Plan George W. Bush plans to implement national energy legislation in a second term. [**http://www.aga.org/Template.cfm?Section=American_Gas_Magazine&template=/ContentManagement/ContentDisplay.cfm&ContentID=13885**](http://www.aga.org/Template.cfm?Section=American_Gas_Magazine&template=/ContentManagement/ContentDisplay.cfm&ContentID=13885) American Gas Magazine, July 2004 

# 

# John Kerry Talks Energy The leading Democratic presidential contender, U.S. Sen. John Kerry, discusses why natural gas plays a central role in his energy plan. [**http://www.aga.org/Template.cfm?Section=American_Gas_Magazine&template=/ContentManagement/ContentDisplay.cfm&ContentID=13630**](http://www.aga.org/Template.cfm?Section=American_Gas_Magazine&template=/ContentManagement/ContentDisplay.cfm&ContentID=13630) American Gas Magazine, June 2004

**Emergency Network Test is Flawless**

Clockwork. Flawless. Seamless. That\'s how the Utah governor\'s office
is describing the first test of UWIN, an integrated communications
network that lets the state\'s first responders talk to each other
during an emergency, regardless of what kind of communications mechanism
they have. Utah\'s Wireless Integrated Network (UWIN) was the first
major initiative announced by Governor Olene Walker when she took office
last November. At the time, she said it was an important step for Utah
because it would bridge the communication gap between agencies at the
state, federal and local level during an emergency. In the exercise, a
Fillmore area power plant was the alleged target of a terrorist group,
Utah National Guard Lt. Col. Bart D. Barry said. In practice, as it
would occur in real life, the plant\'s security team alerted local law
enforcement, which in turn alerted state public safety officials, the
joint terrorism task force and then the Utah National Guard. At each
level of analysis, when each agency had tapped out its ability to
respond to the threat, the next agency was asked to step in. Each
deployed its resources, including a declaration from Walker that
activated the National Guard, Barry said. UWIN worked so well that all
agencies were able to talk to each other during the exercise, even
though they all use different communications systems.\
<http://deseretnews.com/dn/view/0,1249,595075789,00.html>

**U.S. Coast Guard Bars Nine Ships for UN Security Non-Compliance**

The U.S. Coast Guard turned away nine ships from entering ports in the
past week because they failed to comply with United Nations
anti-terrorist security rules that came into force on July 1. Of 1,600
foreign-registered vessels that called at U.S. ports between July 1 and
July 6, 10 were expelled from ports, the coast guard said in an e-mailed
statement. Another 30 were detained, with their movements within ports
restricted. \`\`Some of these vessels have subsequently taken action to
come into compliance,\'\' the coast guard said. Ships bound for the U.S.
must give 96 hours notice before arriving.

Bloomberg News, 1128 July 9, 2004

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (7        | Ago**     | Ago**      |
|                               | /09/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 39.90     | 38.37     | 30.87      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.89      | 5.88      | 5.56       |
|                               |           |           |            |
| **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