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Industry Briefs

Industry Briefs

NiSource and Columbia Energy Group filed their merger application with the Pennsylvania Public Utility Commission yesterday. Pittsburgh-based Columbia Gas of Pennsylvania, Inc., a Columbia subsidiary, provides retail gas service to 389,000 customers in 27 counties. Pennsylvania is the first state to be asked to approve the merger, which was announced Feb. 28 and is expected to close by the end of 2000 (see Daily GPI, Feb. 29). The combined company will serve more than 4.1 million customers primarily located in nine states. Its operations will span the high-growth energy corridor stretching from the Gulf of Mexico to New England, creating the largest natural gas distributor east of the Rocky Mountains. The companies said the proposed merger will have no impact on Columbia Gas of Pennsylvania's rates, terms and conditions now approved by the Commission. However, customers are expected to benefit from the increased electric competition from gas-fueled distributed generation, as well as potential gas cost savings gained through the efficient use of the combined upstream pipeline and storage assets of the new company.

In a very terse order, the Federal Energy Regulatory Commission denied producers' bid to stay the waiver of price caps on short-term capacity release transactions in time for the scheduled lifting of the price ceiling to take effect last weekend. The experimental waiver - which removes the price caps on short-term release transportation deals (less than one year) for the next two and a half years - went into effect last Sunday (March 26), despite an attempt by the Independent Petroleum Association of America (IPAA) and Indicated Shippers to block it until Order 637 underwent full rehearing at FERC. The Commission's decision to lift the price ceiling was the cornerstone of its massive, ground-breaking Order 637, which was issued in February. This made the producers' request for the stay a very tall order.

Canada's National Energy Board (NEB) will hold a public hearing on an application from AEC Suffield Gas Pipeline Inc. (AEC Suffield) to construct and operate a gas pipeline from southeastern Alberta to southwestern Saskatchewan to be known as the North Suffield Pipeline. The hearing will begins at 9 a.m. June 26 in the board's hearing room, second floor, 444 Seventh Ave. SW, Calgary, Alberta. Any person wishing to intervene in the hearing must file an intervention by May 4. AEC Suffield applied to construct 60 miles of 16-inch pipeline and associated control facilities. The pipeline would begin on the western side of the Suffield Military Block, extend along the northern boundary of the Suffield Military Block and then extend east and south to tie-in to the existing AEC Suffield meter station, which connects to TransCanada Pipeline Ltd.'s system near Burstall, Saskatchewan. The pipeline will have capacity of about 190 MMcf/d. The estimated capital cost of the project is $22.3 million. AEC Suffield is planning an in-service date of Nov. 1.

Enron Energy signed an agreement to be an equity partner and official energy sponsor of indoor snowboarding venue The Glacier of Anaheim, CA. The multi-million dollar deal includes engineering and construction of the facility's mechanical, electrical, and plumbing infrastructure and a guaranty of its performance. In addition to designing, engineering, and constructing the overall system, Enron Energy will operate and maintain the Glacier's central plant and snowmaking system. The facility houses many separate climate controlled zones. The snowboarding area is maintained at a constant 30-degree temperature with low humidity. This environment is critical to maintaining quality snow conditions. Enron also signed a $1 million Official Energy Sponsorship with the Glacier project. The $130 million project will be adjacent to Edison International Field of Anaheim, just a few blocks from the Arrowhead Pond of Anaheim and Disneyland Park.

Lukens Consulting Group Inc. of Houston signed a licensing and consulting services agreement with Dominion Services Co., Inc. Under the terms of the agreement Dominion will license the Storage Valuation Advisor software product from Lukens, and Lukens will provide Dominion with consulting services related to the implementation and customization of the software. The Storage Valuation Advisor is an integrated suite of analytical tools that enables buyers and sellers of storage services to estimate the future value of storage based on the shape of the forward curve and volatility of cash and futures market prices. It is based on real option theory, and incorporates much of the latest thinking on econometric modeling energy commodity markets.

Southern Company said it has sold an additional 125 MW of wholesale power in the Southeast. Southern Wholesale Energy, the marketing and trading arm representing Southern Company's generating plants in the region, recently signed a long-term contract for peaking power with North Carolina Municipal Power Agency No. 1 (NCMPA1). Power to supply the NCMPA1 contract will be generated from existing wholesale plant capacity that is owned and operated by Georgia Power, Southern Company's electric utility subsidiary in Georgia. Because this power will serve the wholesale market, the new contract will not affect electric rates paid by Georgia Power customers. NCMPA1, made up of 19 municipal electric systems in western North Carolina, notified Duke Power in January that it would no longer purchase supplemental energy and capacity from the company beginning Jan. 1.

TXU of Dallas agreed to sell its majority interest in a Mexico City gas distribution system to Gas Natural and Hidroelectrica del Cantabrico for $68 million. Gas Natural will become operator when the deal closes, which is expected later this year.

Mitchell Energy & Development Corp. said its proved NGL reserves grew to a record 178 million barrels Jan. 31, up 39 million barrels, or 28%, from the prior year. The Woodlands, TX-based producer said 40% of this increase was attributed to expanded drilling activities. Another 35% came from the October 1999 Jameson plant acquisition. The remainder was due primarily to improved processing margins.

Exxon Mobil satisfied another condition required by the Federal Trade Commission in its approval of the merger of the two companies by selling Mobil Alaska Pipeline's 3% interest in the Trans Alaska Pipeline System to a unit of The Williams Companies, Inc. Terms of the sale were not disclosed. ExxonMobil Pipeline will retain its 20% interest in the 800-mile pipeline system, which transports one million barrels per day of crude oil from Prudhoe Bay on the state's North Slope to the Port of Valdez in the south. The stake adds to Williams' presence in Alaska, which currently includes a petroleum refinery in North Pole that receives crude oil from the Trans Alaska Pipeline System, a distribution terminal at the Port of Anchorage, 28 retail petroleum convenience stores and an interest in an air cargo transfer facility at Anchorage International Airport.

Using e commerce technology provided by a Unitil Corp. subsidiary, the New York City Housing Authority will now purchase its gas through online auctions. The agreement between the housing authority and Unitil Resources was announced last week in concert with an initial auction of 6 Bcf. While some online platforms operate by having customers select a bid that best suits their needs, the Unitil service, called the Usource Internet energy procurement system, allows the customer to set their needs as the contract terms, and then the suppliers bid on those terms. Using Usource, the housing authority will be able to sift through bids from over 50 pre-qualified suppliers in a live online marketplace. The technology platform and services are provided by Enermetrix.com. Scana's online platform also uses the same auction system.

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