The Georgia Public Service Commission (GPSC) approved the transfer of more than 7,400 natural gas customers of Reliant Energy to The New Power Company effective May 1 as Reliant will no longer provide residential and commercial natural gas services in Georgia. The commission approved the transfer with several conditions. Firstly, customers are free to change to another marketer and will not be charged a switch fee nor would their "free switch" be affected. Secondly, New Power must honor all of Reliant's existing contracts and must notify all customers of their transfer by letter. Finally, the letter must tell customers they are under no obligation to stay with New Power unless they are currently under a contractual agreement with Reliant. California power marketer/generators blasted the state transmission grid operator's (Cal-ISO's) federally filed market stabilization plan as potentially being "extremely detrimental" to the state's struggling electricity markets and urged the Federal Energy Regulatory Commission to reject it. The plan promises to cause "more blackouts in the West, chase away much-needed new generation, and jack up wholesale power costs," according to the Western Power Trading Forum, a trade and lobbying group for marketers, scheduling coordinators, power exchanges and generators. The Cal-ISO proposal includes price caps and restrictions on selling California-generated power out of state. "It is yet another attempt to heap more rules on an already overruled market," said Gary Ackerman, executive director of the trading forum.
Williams Communications officially became a separate company after it completed its spin-off from Williams Cos. The Tulsa-based parent distributed nearly 400 million shares of Williams Communications to Williams' shareholders in a tax-free dividend that completed the transaction. Williams Communications CEO Howard Janzen said the spin-off would give the market "a more accurate view" of the communication business' strengths and "give investors the chance to align themselves with a proven high-tech growth strategy." The communications company, which will also be headquartered in Tulsa, was begun in 1985 by Williams when it began placing fiber optic cable in pipelines. It more than doubled its network revenue in 2000 and last year signed almost $3 billion in new customer commitments.
IntercontinentalExchange (ICE), an electronic marketplace for over-the-counter (OTC) energy and metals products, announced that it has crossed the $100 billion combined notional value mark, representing over 100,000 trades, only eight months since ICE went live in August 2000. More than 1,000 energy and metals traders worldwide have completed transactions on the ICE system with thousands more logging on each day to view and trade more than 600 listed products for settlement and delivery over a multitude of time periods. ICE also reported a new single-day gas trading record on its electronic exchange for over-the-counter (OTC) energy and metals products. Last Tuesday, a total of 142 Bcf of gas changed hands on ICE. Physical gas trades contributed over 30 Bcf to the total. So far, ICE has averaged 80 Bcf/d in April, which is more than four times the average daily volume in the first quarter 2001. About 300 traders have traded physical and financial gas on the exchange, completing about 35,000 transactions in 2001, ICE said, adding that it has become a "dominant force in electronic trading for OTC commodity products with current market share of North American natural gas and derivatives approximating 14%." The exchange was founded in March 2000 by leading U.S. and European financial institutions and energy and natural resource firms. Based in Atlanta, the exchange's partners include, American Electric Power, Aquila Energy, BP, Deutsche Bank AG, Duke Energy, El Paso Energy, Goldman Sachs, Morgan Stanley, Reliant Energy, Royal Dutch/Shell Group, SG Investment Banking, Mirant (formerly Southern Energy), Totalfina Elf, and Continental Power Exchange.
Consolidated Edison said it is spending $483 million this year on its electrical distribution system as part of a comprehensive program to prepare for the summer of 2001, enhance reliability and improve infrastructure. Over the next five years, the company said it would invest $2.4 billion to upgrade its electric delivery system, which serves New York City and Westchester County.
OGE Energy Corp., parent company of Oklahoma Gas and Electric Co. and Enogex Inc., reported a substantial first quarter loss, blaming the reduction on unfavorable price margins and "strong downward pressure on fractionation spreads." OGE posted a loss of $15 million, or 19 cents a share, compared with a profit last year of $1.06 billion or one cent a share. Because of the loss, the company lowered its 2001 earnings forecast to between $1.70 and $1.80 a share, down from its estimate of $2.00 to $2.10 a share. Thomson Financial/First Call had expected the company to turn a profit of $2.07 a share. "We are disappointed with our first quarter results, but we are actively addressing the issues involved," said CEO Steve E. Moore. "Meanwhile, our electric utility is making pre-season preparations to meet the growing demand for power during the summer cooling season, when OG&E accounts for the majority of our annual earnings." The company said the results were "not unusual for the first quarter," stating that Enogex's loss was "primarily due to the depressed operating environment for the processing and sale of natural gas liquids." It said that the "fractionation spread --- the value of liquids after they are processed out of natural gas, compared to the price of the gas itself --- was, on average, negative in the first quarter." OG&E, the regulated electric subsidiary, serves 700,000 customers in a service territory spanning 30,000 square miles in Oklahoma and western Arkansas. Enogex, a natural gas pipeline and energy marketer, operates one of the largest U.S. pipeline systems, mostly in Oklahoma, Arkansas and Texas.
A recent decision by the Indiana Utility Regulatory Commission (IURC) has cleared the way for a Cinergy Capital & Trading (CC&T) Inc. subsidiary to start construction on a 130 MW, gas-fired electric peaking facility in Indiana. CC&T, an energy merchant-focused affiliate of Cinergy Corp., announced that its subsidiary, CinCap VII LLC, has received approval from the IURC for construction of the power plant near Cadiz in Henry County, IN. A significant portion of the output from CC&T's share of the facility will serve ultimate customers in Indiana as a result of a contract with the Wabash Valley Power Association to provide 50 MW of capacity from the facility for the next 20 years to meet peak demands of the association's customers in the state. The balance of the energy generated from the three-unit plant will be sold on the wholesale electricity markets by its owners, CC&T and Duke Energy North America, to address the growing demand for electricity at peak times in the Midwest. Construction of the facility, which was halted by the IURC in March 2000, will restart promptly with the first units scheduled to be on line in July 2001. Total project cost is estimated at approximately $70 million.
Sticking with its strategy of adding electric generating capability in key U.S. markets, PPL Corp. last week unveiled plans to build a 540 MW power plant near Chicago and, separately, to increase the capacity of its Susquehanna nuclear plant in Pennsylvania by 100 MW. PPL said that the Illinois plant will be a 540 MW, simple-cycle, natural gas-fired electric generation facility. The Illinois facility is expected to cost about $305 million and be accretive to PPL earnings in its first year of operation. It is expected to be in service by the summer of 2002. Also, the plant will be built in an industrial park with close access to natural gas and high-voltage transmission lines. On a separate track, the company also will increase the capacity of its Susquehanna nuclear plant in Luzerne County, PA, by 100 MW with the installation of more efficient steam turbines on each of the two units. The new turbines, which will replace units that have been in operation since the early 1980s, will be installed in the spring of 2003 and 2004 during refueling outages at the plant. The $120 million of improvements at the Susquehanna plant are expected to be accretive to earnings as soon as they go into operation.
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