Now that it has grown to a company with four local distribution companies (LDCs) as well as a holder of gas-fired power generation, Ameren Corp.'s strategy is to better integrate its operations and use its clout with suppliers.
As part of this strategy, Ameren subsidiaries have signed long-term contracts for more than 640 MMcf/d of transportation and 16 Bcf of storage capacity with Panhandle Eastern Pipe Line Co. and Trunkline Gas Co. to supply the company's LDCs.
The Panhandle Energy pipelines connect with all four of Ameren's gas utilities and a substantial portion of its gas-fired power generation facilities. The Ameren subsidiaries signing contracts, effective April 1 and extending up to 2015, are AmerenCILCO, AmerenCIPS, AmerenIP, AmerenUE and AmerenEnergy Generating Co. The new agreements allow St. Louis-based Ameren to move gas among its individual assets to where it is most needed.
"We are pleased with the results of our negotiations with Panhandle Eastern, especially their understanding of our new capacity requirements driven by Ameren's recent acquisition of two major gas utilities and the growth of our gas-fired generation fleet," said Scott Glaeser, Ameren vice president of gas supply and system control. "The new capacity agreements will allow us to operate our systems with greater flexibility at competitive rates along with diversified access to production basins and LNG facilities."
Glaeser told NGI that the key benefit of the agreement is the ability to move gas among its various assets, particularly beneficial when one or more of its systems is operating under duress. "It just increases the reliability of the overall system when all of the capacity resources can be utilized to support the utilities," Glaeser said. "One of our goals is to create more of a single, seamless gas utility instead of having four separate utilities operating independently."
Discount agreements negotiated with the pipelines flow through to customers as part of the utilities' purchased gas adjustment (PGA) clauses, Glaeser noted. The next step in the company's integration strategy is to develop a common PGA mechanism for all four of its gas utilities. This, of course, will require the approval of regulators. "If we can show the benefits and the reliability to the regulators, I think they would allow us to do that," Glaeser said. "But it's up to us to show those benefits and the enhanced reliability that comes with the common PGA."
Ameren also takes gas supplies from NGPL, Mississippi River Transmission, Texas Gas, Texas Eastern, Midwestern Gas Transmission, and ANR Pipeline. Glaeser said Ameren has been able to strike an agreement with NGPL that is similar to the one it just signed with the Panhandle Energy pipelines.
Ameren serves more than 2.4 million electric customers and nearly 1 million natural gas customers in Illinois and Missouri. Ameren acquired Cilcorp Inc. (now AmerenCILCO) from AES Corp. in 2002 (see NGI, May 6, 2002). It picked up Illinois Power (AmerenIP) from Dynegy Inc. in 2004 (see NGI, Feb. 9, 2004).
Intelligence Press Inc. All rights reserved. The preceding news report
may not be republished or redistributed, in whole or in part, in any
form, without prior written consent of Intelligence Press, Inc.