The new millenium saw the loss of two major energy companies bythree national energy trade associations, the Interstate NaturalGas Association of America (INGAA), the American Gas Association(AGA), the Edison Electric Institute (EEI), while a fourth, theNatural Gas Supply Association (NGSA), says it is poised for acomeback.

For Kinder Morgan Inc., which recently bought the financiallytroubled KN Energy, dropping its membership in INGAA and otherenergy-related associations is directed mainly at immediate budgetcuts. The company also closed its Washington office. Kinder Morganis “initiating a back-to-the-basics strategy in trying to returnthe company to profitability. So for now we’re not renewing most ofour [association] memberships,” said a spokeswoman for thatcompany. “But we do plan to be a part of those in the futureagain.”

For Sempra Energy, which left AGA, EEI, INGAA and the PacificCoast Gas Association, strategic direction, as much ascost-savings, was the key driver in the $5 billion holdingcompany’s decision. The move is expected to save Sempra severalmillion dollars annually in dues and expenses related to itsemployees’ participation. The San Diego-based parent of two of thenation’s largest distribution utilities, San Diego Gas and Electricand Southern California Gas will rely more heavily on the company’sown Washington, DC, office for federal lobbying activities.

“It is not just the dollars; we came to the conclusion aftersome hard deliberations that these particular associations didn’tfit for the future of the company,” said Fred John, Sempra’s seniorvice president, external affairs. He noted, however, that thecompany will maintain its memberships in industryresearch/technology development groups, Electric Power ResearchInstitute (EPRI), Gas Research Institute (GRI) and Institute of GasTechnology (IGT).

“We’re trying to take more of a customer-focused approach, andthe new technologies are what we need to deal with the customers inthe changing environment that we are in,” John said.

San Francisco-based PG&E Corp., another largeCalifornia-based combination utility holding company, last yearpulled out of EEI, but has remained in the other groups.

Sempra Energy is “one of our bigger members,” said AGA spokesmanDaphne Magnuson, but she refused to reveal how much dues it hadpaid during the past year. Without Sempra, it’s estimated that AGAwill be $800,000 poorer in 2000, according to sources.

Magnuson said Sempra’s departure from AGA “won’t have an affecton our operations” in 2000, because “we’re doing more with less.”She noted the association has cut costs for next year by $1.75million by moving into its D.C. headquarters and taking othersteps, while also not increasing members’ dues. That would put theassociation’s budget for 2000 at just under $25 million, with about$18 million coming from members’ dues.

Sempra’s and Kinder Morgan’s pullout from INGAA in 2000 willmean about $505,000 less in the pipeline group’s coffers —$475,000 less from Kinder Morgan and $30,000 less from Sempra. “Thefinancial hit is not going to be great for us,” said INGAAspokeswoman Anne Roland, because certain association members haveagreed to make up some of the shortfall that will be caused byKinder Morgan’s departure. INGAA member dues are based on apipeline company’s revenues, and are capped at $475,000. Theassociation’s budget in 2000 will be $5.2 million. INGAA now has 33corporate members.

EEI spokesman Jim Owen refused to disclose the financial impactthat Sempra’s departure will have on the electric association,which represents investor-owned utilities.

Meanwhile, NGSA, a producers’ group under new leadership afterits former president was convicted of embezzlement from theassociation last year, is mounting a membership push.

“I actually expect to increase our membership [by] a fewcompanies,” said NGSA’s new President R. Skip Horvath.

“I don’t have a target yet. We’re still working on that. Butthere are producers out there who have not been a part of NGSA, andI think they might be interested in our services.” He estimated thegroup currently has “roughly” 20 producer-members, and that itsbudget for 2000 will be below $2.5 million. “It’s been that forawhile.”

Susan Parker, Washington; Richard Nemec, Los Angeles

©Copyright 2000 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.