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Duke Builds Power, Gas Marketing with NP Energy

December 28, 1998
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Duke Builds Power, Gas Marketing with NP Energy

Duke Energy Trading and Marketing (DETM) added 1 Bcf/d of gas sales and 14.07 million MWh of power sales to its marketing operation with the purchase of NP Energy, which was at No. 20 in NGI's power marketer ranking by volume in the third quarter. The move pushes Duke up to No. 3 from No. 5 in gas marketing and to No. 4 from the No. 7 spot in power based on third quarter volumes.

Louisville based NP Energy is one of the fastest growing marketing operations in the country, ranking 16th in power after only one year. It was founded in early 1997 by Ed Casey, former president of Tenneco Energy, and Mike McInnis, former president of LG&ampE Power Marketing.

Officials of the privately-owned company, however, realized soon after forming NP that there were limitations to what it could do. They began discussing alternatives with potential buyers and merger partners last summer.

"Scale and considerable credit backing have become critically important in the energy marketing industry, so Duke Energy's resources and their track record for innovation make this a logical step for both parties," said CEO Ed Casey. "We are very proud of the success of this venture and the performance of our employees, but it was our view that it would take greater resources and depth to achieve the growth necessary to remain a leader in the business."

The agreement calls for Duke Energy Trading and Marketing to acquire all ownership interest in NP, including interests held by National Power of America and by an employee group. Duke will receive NP Energy's portfolio of marketing agreements and major projects under development. Duke will make a cash payment at closing and additional payments at a later date based on the progress of major power projects in NP Energy's portfolio. Closing of the sale is expected by the first quarter pending approval by FERC and other governmental reviews.

NP's risk management and project development efforts include marketing agreements with Big Rivers Electric Corp. and several other power cooperatives, a planned 325 MW waste coal repowering project with Ohio National Energy and a planned 650 MW merchant plant in Kingman, AZ, being developed by PP&ampL Global, an affiliate of Pennsylvania Power &amp Light.

"We are very pleased to add the NP Energy assets to our portfolio of marketing agreements because they will help build our critical mass in the U.S. West and Midwest," said DETM President Brad Karp. "Additionally, our California operations are in place to manage the Arizona facilities." Duke bought three power plants from PG&ampE Corp. earlier this year.

DETM is the wholesale energy trading and marketing arm of Duke Energy and serves as the exclusive marketer for the North American natural gas production of Mobil Corp.

Rocco Canonica

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ISSN © 2577-9877 | ISSN © 1532-1266
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