The National Oceanic and Atmospheric Administration said in areport issued yesterday that the 2000 hurricane season could be awhopper with 11 or more tropical storms, of which seven or morecould become hurricanes, with three or more classified as major.”The greatest influences in this forecast continue to be theon-going La Nina and a lesser-known climate phenomenon of warmerthan normal Atlantic Ocean temperatures that affect hurricaneactivity over very long time scales,” said NOAA Administrator D.James Baker. “La Nina is defined by cooler-than-average sea-surfacetemperatures in the central and eastern tropical Pacific. Duringlast year’s hurricane season, La Nina was bold, and clearlydefined, and gave forecasters more certainty. This year, La Nina’send is in sight,” Baker said. “Even if La Nina fades by August (asthe current forecast suggests), La Nina’s remnants and otherinfluences will still likely bring more storms than usual,” headded.

The Mid-America Interconnected Network (MAIN) said yesterday anaudit of ComEd’s electric power supply resources shows the companyhas lined up 22,494 MW, which exceeds MAIN’s 15% supply reservebenchmark. ComEd officials also said they expect additionalidentified resources to be added before June, boosting theutility’s reserve margin to more than 16%.

Kinder Morgan Power and Southern Energy Inc. plan to build a 550MW gas-fired peaking power plant southeast of Little Rock, AR.Construction on the $250 million plant is expected to begin thissummer in Pulaski County, with the plant scheduled to beginproducing power by April 1, 2002. Gas transportation service forthe plant will be provided by Kinder Morgan Inc. subsidiary NaturalGas Pipeline Company of America (NGPL). Southern Company’smarketing affiliate will market the electric output.

The New Hampshire Public Utilities Commission approved theacquisition of EnergyNorth, Inc. by Eastern Enterprises andEastern’s merger partner KeySpan Corp., following a favorablereview of a settlement between the utilities, the Office of theConsumer Advocate and the Staff of the NH PUC. “The decision of theNew Hampshire Public Utilities Commission keeps us on track forcompleting our merger in the fall,” said KeySpan CEO Robert B.Catell. The settlement calls for ENGI’s customers to receive a 2.2%rate cut and other future benefits created by the merger. It alsoallows the utilities to request the amortization of transaction andintegration costs, including the acquisition premium, in rates onlyto the extent that they can demonstrate the benefits of the mergerto the customers equal or exceed the amount of the costs proposedfor amortization. On July 15, 1999, Eastern agreed to acquireEnergyNorth, owner of New Hampshire’s largest gas distributor. OnNovember 4, 1999, KeySpan announced plans to buy Eastern for $64per share, in a transaction with an enterprise value of $2.5billion. Terms of the EnergyNorth merger were adjusted at that timeto increase the price paid to EnergyNorth shareholders to$61.13/share to reflect the increased price of Eastern stock.Manchester-based EnergyNorth’s subsidiaries distribute gas andpropane gas to 100,000 customers throughout New Hampshire andVermont.

The proposed merger of Anadarko Petroleum and Union PacificResources moved forward yesterday when the U.S. Federal TradeCommission (FTC) granted early termination of the statutory waitingperiod required under the Hart-Scott-Rodino Anti-Trust ImprovementsAct. Completion of the merger still is subject to the approval ofthe shareholders of both companies and satisfaction of othercustomary conditions. Under the agreement, which was unanimouslyapproved by each company’s board of directors, UPR shareholderswill receive 0.455 Anadarko common shares for each UPR common sharethey own. The offer is worth about $5.6 billion. Anadarko will alsotake on $2.6 billion in long-term debt from UPR. Closing isexpected in July. UPR will become a wholly-owned subsidiary ofHouston-based Anadarko. The purchase more than doubles Anadarko’sNorth American gas reserves from 2.5 Tcf to 5.8 Tcf. The increasemoves the company from the 13th largest company in terms of NorthAmerican gas reserves to fifth. The increase of production is evenmore pronounced, as Anadarko will go from 170 Bcf/year (20th place)by itself to 634 Bcf/year (sixth place).

AltaGas Services Inc. is buying four small gas midstreamgathering and processing facilities for a total of $15.7 million.The plants and facilities include the following: 1) an 8 MMcf/d gasplant with fractionation capability located near the town of Brooksin central Alberta and a 36-mile gas gathering system with accessto 24 townships. Reserves behind the plant have a life index inexcess of 10 years; 2) a 16%, non-operated, working interest in a10 MMcf/d gas plant and 44 miles of associated gathering lines; 3)a 2 MMcf/d gas plant and 2-mile gathering line located southeast ofEdmonton; and 4) a further 15% ownership interest in the KillamNorth gas plant located in the company’s Birch Wavy operating area.With this purchase, AltaGas’ ownership interest in this facilitywill be approximately 70%.

BP Amoco announced the discovery of some 2 Tcf of gas off thesoutheast coast of Trinidad, the country’s first deep-water find.This is BP Amoco’s third major gas find offshore Trinidad in thepast three years. The discovery was made by the ‘Manakin 1’exploration well in block 5b, located 135 miles east of GaleotaPoint in 730 feet water depth on a large structure that straddlesthe Trinidad-Venezuela median line. “This new find reinforces theindustry’s assessment of significant gas potential in this basinand it augurs well for future development from which Trinidad andTobago will benefit enormously,” said Larry Tiezzi, President ofthe BP Amoco Trinidad exploration business unit. “Trinidad &Tobago is a world class hydrocarbon province and this well resultadds another discovery to a long list of successes underpinning ourstrategy to focus significant resources in this region. We recentlyagreed a two-train LNG expansion in Trinidad which will trebleproduction to nine million tonnes a year by 2003, at TT$7,000million the largest single investment in the Caribbean.”

Southern California Edison will sell its 56% controllinginterest in the Mohave Generating Station to AES Corp. for morethan $667 million, a sale that now brings to 15 the number ofgenerating assets SCE has sold within the past three years as partof its marketing restructure plan. SCE market-valued and sold 12gas-fired California plants in 1997 and 1998 through an auctionprocess, similar to one used for the Mohave sale announcedyesterday. The Mohave station, located in Laughlin, NV, willcontinue to be operated and maintained by SCE for two years inaccordance with AB 1890, California’s electricity marketrestructuring law. The remaining interests in the Mohave facilityare owned by the City of Los Angeles Department of Water and Power,which owns 20%, and the Salt River Project, which owns 10% of thefacility. AES will acquire SCE’s interest in the two-unit,coal-fired plant, which represents about 885 MW of the coal plant’s1,580 MW generating capacity. The transaction still must beapproved by the California Public Utilities Commission and FERC,and reviewed by the Public Utilities Commission of Nevada, and ifall goes as planned, the sale will close by November, according tocompany officials.

A unit of Williams has agreed to provide various amounts ofenergy and capacity to Old Dominion Electric Cooperative beginningin the fourth quarter of 2001 in a heat rate call option andcapacity sale announced yesterday. Williams’ energy marketing andtrading unit had been selected by the Glen Allen, VA cooperative aspart of its 1999 Request for Supply Proposals in late 1999 to meetthe needs of members in Delaware, Maryland and Virginia. Thecapacity sale will be supported primarily by the 700-MW Ironwoodgenerating facility in South Lebanon Township, PA.

Forest Oil Corp. announced the completion of the Liard pipelineand initial production from the P-66A Well in the NorthwestTerritories. Production rates are anticipated to increase graduallyduring the next several weeks to a target rate of 35 to 50 MMcf/d,resulting in net sales of gas by Forest of 15 to 20 MMcf/d.Production is being transported and processed through the Westcoastsystem. Based on current prices, processing and transportationfees, and production costs, the netback for the production fromthis field is US$2.25/Mcf, the company said. Production from theFort Liard area is the first new gas to be brought on stream in theNorthwest Territories since the Pointed Mountain field in the early1970s. Forest has achieved production within 40 months of itsinitial participation in the Flett exploration program. Thisrepresents a significant achievement considering the remotelocation and lack of infrastructure in the area. It is expectedthat substantial reductions in cycle times will be achieved as aresult of the company-owned facilities now in place.

AmeriGas Partners, L.P. acquired substantially all of thepropane distribution assets and business of All Star GasCorporation in five western states. All Star Gas markets over 18million retail gallons annually from 26 locations in California,Idaho, Nevada, Oregon and Washington. Terms of the transaction werenot disclosed. “The acquisition of the operations of All Star Gasbrings the total sales volume acquired this year to 26 millionannual gallons, exceeding our commitment to add 15 million gallonsannually to AmeriGas through the addition of quality businesseswith talented people,” said AmeriGas CEO Lon R. Greenberg.

AIG Financial Products Corp. and Enron Investment Partners Co.have acquired minority stakes in TreasuryConnect, a transactionexecution system for financial products traded between corporationsand banks. Bruce Usher, co-founder and president ofTreasuryConnect, said he was “extremely pleased” with AIG’s andEnron’s investment in his company, and said that “it reflectsfavorably on our technology and its ability to improve trading andoperational efficiency.” Even though it domestically transacts morethan $6 trillion a year, the interest rate and currency swap marketis one of the last markets to migrate to the Internet because ofthe relative complexity of derivative products, and the subtletiesof the trading process, according to Usher. TreasuryConnect, withoffices in New York City and Los Angeles, offers an Internet-basedtrading platform specifically designed for financial transactionsbetween banks and corporations. It also offers direct back officelinks for straight through processing, documentation solutions,historical data, research and analytical tools to facilitatetrading. AIG Financial is a wholly-owned subsidiary of AmericanInternational Group Inc. and Enron Investment is a wholly-ownedsubsidiary of Enron Corp.

More security. More electronic commerce solutions. Moreflexibility. Those are a few of the reasons that e-commerce leaderAltra Energy Technologies Inc. announced yesterday it will upgradeits Internet web-based services by using Extensible MarkupLanguage, or XML, to integrate its AltraWeb Product. XML is aprecise, cutting-edge version of its forerunner, hypertext markuplanguage (HTML), the basic language used to communicate on theWorld Wide Web. XML differs from HTML in that it offers businessesa more flexible way to add graphics and information options ontheir web sites, with structured data that is uniform andindependent of applications or vendors. By using XML over morebasic web languages, Altra will be able to improve its security,and offer more efficient e-commerce solutions. Altra, together withits subsidiaries, has become a leading provider of transactionmanagement software and electronic commerce solutions for buying,selling and transportation of energy. It operates Altrade T, aleading independent online trading exchange for the wholesaleenergy industry.

To assist in the growing demand for electricity in the upperMidwest, Southern Energy Inc. plans to begin construction thismonth of a natural gas-fired plant in Zeeland, MI that will useadvanced natural gas combined-cycle technology and state-of-the-artemission control equipment. Commercial operations are expected tobegin in June 2001, with an initial 300 MW of capacity. Anadditional 530 MW will begin commercial operation by June 2003.When the Zeeland facility begins operation along with the recentlyannounced 550-MW plant in Arkansas, the power-generation capacityowned or controlled by Southern Energy will top more than 10,000 MWin the United States. The plant’s output in the wholesale powerarea will be marketed by Southern Company Energy Marketing, theenergy marketing and risk management unit of Southern Energy.

Merrill Lynch has been hired to serve as Avista Labs’ investmentbank and strategic adviser to evaluate the best ways to maximizethe shareholder value of its fuel cell technology. Avista Corp. ofSpokane, WA made the announcement yesterday, and said that MerrillLynch will “consider all possible options, including financialrestructuring and an initial public offering.” Avista Labs recentlyreceived a comprehensive patent securing the exclusive modulardesign of its PEM fuel cell system, a “plug and play” feature thatallows fuel cell cartridges to be easily removed and replacedwithout interrupting power. The Labs arm of Avista Corp. is a jointdevelopment agreement with UOP to integrate its fuel cell with thenatural gas and propane fuel processor systems of UOP. Later thisyear, field testing will begin for the integrated units of UOP.Currently, Avista Labs is testing its fuel cell subracks in severallocations across the country, including Arizona Public Service inPhoenix, the Fuel Cell Test and Evaluation Center in Johnstown,PA., Tyndall Air Force Base in Panama City, FL, and as back-uppower within the Avista Utilities service territory in the PacificNorthwest.

Southwest Gas Corp. has requested a $37.1 million general rateincrease with the Arizona Corp. Commission. General rateapplications deal with the company’s costs of operating itsdistribution system. If approved as requested, the rates wouldincrease average monthly residential bills about $3.63, with anaverage bill increasing to $30.10. Roger Montgomery, Southwest’svice president/pricing, said the proposed monthly bill would becomparable to a bill paid by customers in the early-to-mid 1980s.Later this year, he said that Southwest plans to remove a one-timegas cost surcharge which would then reduce the average residentialmonthly bill proposed in the application by $1.84. Southwest statedin its application that even though it has had success incontrolling costs and increasing productivity, it has been unableto earn the rate of return authorized by the commission because ofseveral factors: inflation, declining average residential use andfinancing costs to meet the growth demands of the Arizona’s growingresidential sector. Southwest also wants to shift more of itsday-to-day operating costs to the basic service charge to reducethe impact of weather on monthly bills.

It’s taken just eight months since its discovery, but MarinerEnergy Inc. says that the Apia Project, a deep-water Gulf of Mexicosingle subsea well, is completed and is producing nearly 40 MMcf/dof natural gas. Located in Garden Banks block 73, the well isproducing at a water depth of 700 feet, connected to a hostplatform three miles away. Mariner officials also announced lastweek that a production test has been completed at its Black Widowdeep-water Gulf discovery, located in Ewing Bank block 966 at awater depth of 1,840 feet. The subsea well tested at restricteddaily rates of 6,500 barrels of oil, and 6.3 MMcf/d of gas througha 32/64th-inch choke with a flowing tubing pressure of 4,362 poundsper square inch.

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