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California regulators have given the green light to continue indefinitely the three-year-old incentive gas buying program at Southern California Gas Co., dispensing at year-end 1998 with an annual review of the program, which has even drawn praise from the usually critical Office of Ratepayer Advocates (ORA) at the California Public Utilities Commission. The program reportedly has saved millions of dollars for SoCalGas' smallest customers who rely on the utility to buy their supplies. In 1998, SoCalGas reports earning a $2 million award for its shareholders for the latest 12-month operations of its so-called "Gas Cost Incentive Mechanism." Based on benchmarked market prices if SoCalGas can do significantly better than the market average, resulting in quantifiable savings for its merchant customers, part of those savings flow back to its shareholders, who in this case are owners of the SoCal parent, Sempra Energy. Shareholders have earned $16 million in rewards through the incentive gas-purchase program over the past three years, according to SoCalGas.

The New York State Public Service Commission adopted a set of business practices last week that are designed to streamline the manner in which local utilities interact with gas and electricity marketers, energy services companies (ESCOs) and customers who purchase energy in New York's competitive market. The measures cover a wide range of issues, including minimum standards of ESCO/marketer creditworthiness, customer information exchanged between the utility and the supplier, billing procedures, switching of customers, customer slamming protections, and dispute resolution procedures. "Simple, uniform procedures will help ensure sound business practices that ultimately benefit everyone: customers, energy providers and the local utilities," Commission Chairman Maureen O. Helmer said. The procedures under which energy competitors are expected to conduct their business are scheduled to take effect on May 1. The Uniform Business Practices for ESCOs, Marketers and Utilities (Case 98M1343) will be attached to a commission order

Rep. Joe Barton (R-TX), the new chairman of the House energy and power committee, signaled that he wants the panel to hold hearings early next month on the antitrust aspects of the proposed Exxon-Mobil merger. The call for a closer congressional review came after the Federal Trade Commission indicated it planned to take a hard-line approach to the merger. Heightened concerns over the antitrust implications of the mega-deal could force the two energy companies to sell off more of their assets than was anticipated, analysts said. The proposed Exxon-Mobil deal is considered by far the largest marriage of industrial companies based on market capitalization. Its combined market capitalization was put at $240 billion.

Large Ohio wholesale natural gas provider Beldenergy has licensed Prosper NRG Marketing's "Direct to Market" service to provide marketers targeting Columbus, OH, with the capability of giving prospective customers "Instant Savings Analysis." Direct to Market puts a form in the hands of a supplier's prospective customers through direct mail or insert into publications. The end-user fills out the form with data on current energy costs paid to the incumbent utility and faxes it to Prosper. The form is machine read, and a rate quote is generated and faxed back to the prospect with a contract. At the same time, information on the prospect is forwarded to the client or its call center. The supplier can then call the prospect for follow-up. "When energy deregulation happens in a market most residential and commercial customers are confused by the tidal wave of direct mail offers they receive from energy marketers," said Prosper NRG Marketing's Gary Drenik. "The Direct to Market makes it easier for marketers to sell and customers to buy because it automatically calculates savings. Customers can easily understand the financial benefit they can receive from switching suppliers. When consumers can get more information with less hassle they're not as confused and more willing to switch."

Duke/Fluor Daniel was awarded a turnkey contract last week to build a 550 MW, $240 million cogeneration plant in Dearborn MI. Details of the contract were not disclosed. Dearborn Industrial Generation L.L.C., an alliance between CMS Energy and DTE Energy Services that founded the project, hired Duke/Fluor Daniel to construct the plant and begin operation by July. The facility is expected to use 100 MMcf/d of gas to supply 400 MW of electricity and 1.7 million pounds per hour of steam to Rouge Steel and Ford Motor Co. for 15 years.

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