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AGA, INGAA, EEI Lose Major Members; NGSA Plans a Comeback

January 10, 2000
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AGA, INGAA, EEI Lose Major Members; NGSA Plans a Comeback

The new millenium saw the loss of two major energy companies by three national energy trade associations, the Interstate Natural Gas Association of America (INGAA), the American Gas Association (AGA), the Edison Electric Institute (EEI), while a fourth, the Natural Gas Supply Association (NGSA), says it is poised for a comeback.

For Kinder Morgan Inc., which recently bought the financially troubled KN Energy, dropping its membership in INGAA and other energy-related associations is directed mainly at immediate budget cuts. The company also closed its Washington office. Kinder Morgan is "initiating a back-to-the-basics strategy in trying to return the company to profitability. So for now we're not renewing most of our [association] memberships," said a spokeswoman for that company. "But we do plan to be a part of those in the future again."

For Sempra Energy, which left AGA, EEI, INGAA and the Pacific Coast Gas Association, strategic direction, as much as cost-savings, was the key driver in the $5 billion holding company's decision. The move is expected to save Sempra several million dollars annually in dues and expenses related to its employees' participation. The San Diego-based parent of two of the nation's largest distribution utilities, San Diego Gas and Electric and Southern California Gas will rely more heavily on the company's own Washington, DC, office for federal lobbying activities.

"It is not just the dollars; we came to the conclusion after some hard deliberations that these particular associations didn't fit for the future of the company," said Fred John, Sempra's senior vice president, external affairs. He noted, however, that the company will maintain its memberships in industry research/technology development groups, Electric Power Research Institute (EPRI), Gas Research Institute (GRI) and Institute of Gas Technology (IGT).

"We're trying to take more of a customer-focused approach, and the new technologies are what we need to deal with the customers in the changing environment that we are in," John said.

San Francisco-based PG&E Corp., another large California-based combination utility holding company, last year pulled out of EEI, but has remained in the other groups.

Sempra Energy is "one of our bigger members," said AGA spokesman Daphne Magnuson, but she refused to reveal how much dues it had paid during the past year. Without Sempra, it's estimated that AGA will be $800,000 poorer in 2000, according to sources.

Magnuson said Sempra's departure from AGA "won't have an affect on our operations" in 2000, because "we're doing more with less." She noted the association has cut costs for next year by $1.75 million by moving into its D.C. headquarters and taking other steps, while also not increasing members' dues. That would put the association's budget for 2000 at just under $25 million, with about $18 million coming from members' dues.

Sempra's and Kinder Morgan's pullout from INGAA in 2000 will mean about $505,000 less in the pipeline group's coffers --- $475,000 less from Kinder Morgan and $30,000 less from Sempra. "The financial hit is not going to be great for us," said INGAA spokeswoman Anne Roland, because certain association members have agreed to make up some of the shortfall that will be caused by Kinder Morgan's departure. INGAA member dues are based on a pipeline company's revenues, and are capped at $475,000. The association's budget in 2000 will be $5.2 million. INGAA now has 33 corporate members.

EEI spokesman Jim Owen refused to disclose the financial impact that Sempra's departure will have on the electric association, which represents investor-owned utilities.

Meanwhile, NGSA, a producers' group under new leadership after its former president was convicted of embezzlement from the association last year, is mounting a membership push.

"I actually expect to increase our membership [by] a few companies," said NGSA's new President R. Skip Horvath.

"I don't have a target yet. We're still working on that. But there are producers out there who have not been a part of NGSA, and I think they might be interested in our services." He estimated the group currently has "roughly" 20 producer-members, and that its budget for 2000 will be below $2.5 million. "It's been that for awhile."

Susan Parker, Washington; Richard Nemec, Los Angeles

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