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Industry Briefs

Industry Briefs

PowerSpring Inc. is preparing to muscle its way into the virtual marketplace next month, offering commercial and industrial energy users an online shopping area to take better advantage of deregulation. Officials last week touted the launch of its new Internet site,, promising energy users the "big player" benefits of deregulation - market clout and savings. Through its website, PowerSpring plans to manage energy use for its customers by using aggregated customer demand, an online auction and customized reports. Sidney Hinton was named president and CEO of PowerSpring at the launch last week, which coincided with parent company Metretek's annual shareholder meeting in Denver. The new company was first announced last month (see NGI, April 17). "PowerSpring has the potential to revolutionize the purchase and management of energy among an ever-growing universe of commercial energy users," Hinton said. PowerSpring's virtual energy marketplace, designed by e-business partner Scient, will offer a single source for purchasing and managing energy, with customers receiving one consolidated bill. Initially, the service will only be available to commercial and industrial natural gas users, however, as deregulation grows, PowerSpring plans to expand the coverage area.

BC Gas selected Marine Pipeline Construction, a division of Murphy Pipeline Inc., as its contractor for the 188-mile, 24-inch diameter Southern Crossing gas pipeline. The contractor will begin moving equipment immediately to locations along the pipeline route, which stretches from Oliver to Yahk, BC. Construction is expected to begin before June 1 and be completed by November. The C$377 million project will be designed to initially transport 250 MMcf/d with room for expansion to 600 MMcf/d. Addition details are available in a pdf file on BC Gas' web site.

Catalytica Combustion Systems Inc., Kawasaki Motors Corp. and Enron Energy Services Inc. plan to build three Kawasaki M1A-13X gas turbines for a distributed generation power project for the northeastern United States. The engines will be equipped with Catalytica's Xonon Cool Combustion technology, a system that enables gas turbines to achieve extremely low emissions without exhaust gas cleanup systems. This is the first time Grand Rapids, MI-based Kawasaki Motors USA has ventured into the commercial market with its gas turbine system. Enron Energy Services Tom White said that the Xonon system is a "key element" in his company's distributed generation solution to supply clean energy for increasing demands around the country.

Tucson Electric Power Co. and Citizens Utilities agreed to partner on a new power transmission line that will enhance electrical service reliability to southern Arizona and strengthen the electric power grid in the southwestern United States. The two utilities signed a deal to jointly develop the interconnection and transmission project that will extend from southern Arizona to the Mexico border. Citizens currently is engaged in several service improvement initiatives in order to comply with an order from the Arizona Corporation Commission (ACC) to improve reliability in Santa Cruz County. One component of Citizens' plan is construction of a new 115,000-volt transmission line by Dec. 31, 2003. TEP recently participated with the Comision Federal de Electricidad (CFE), Mexico's federal energy agency, in a joint feasibility study to develop an interconnection with Mexico. The study concluded that a 345,000-volt interconnection from TEP's substation near Sahuarita, AZ, to CFE's system in Sonora, Mexico, is feasible.

Ameren Corp. subsidiary Ameren Energy Communications bought all of the assets of Energy Measurement Enterprises (EME), a provider of utility metering services based in Lodi, CA. Terms of the transaction were not disclosed. Based in northern California, EME was formed in 1997 by Wayne Parker and John Lichti, former Pacific Gas & Electric employees. EME provides physical metering sales, services and maintenance in the direct access and Independent System Operator (ISO) markets. The EME acquisition is Ameren's second acquisition of a metering operation in the past 12 months.

Cross Timbers Oil Co.'s recent record of growth and debt consolidation has convinced more than a few investors that it's a good place to put money. The Fort Worth-based independent this week completed financing of a new $850 million revolving credit facility with a group of 23 major U.S. and international banks., with proceeds from the loan used to retire its existing bank debt. The company also completed buying back 3.4 million shares of stock at $11.55 per share and authorized the repurchase of up to 3 million more shares, or about 6.5% of shares outstanding.

Pacific Gas and Electric said the unusual event declared Monday at its Diablo Canyon Power Plant Unit 1 was terminated at 9:57 a.m. Tuesday morning. It noted that "An Unusual Event" is the lowest level of emergency classification as defined by the NRC and does not require any emergency action by the general public or any government agency. Throughout the event all reactor safety systems functioned properly and radiation monitors did not detect any radioactivity above normal background, the utility said. The event was terminated after off-site power was restored to the unit and diesel generators used to power cooling equipment during the event were shut off and placed in standby. Offsite power was lost following an electrical short and fire at 12:25 a.m. Monday. The diesel generators are used to power reactor cooling equipment in the event of a reactor trip when offsite power is not available. Efforts at the plant are now focused on determining the cause of the electrical short and fire and to make repairs.

Conoco said continued strong crude oil prices, along with rising natural gas prices and a "rebound" in its downstream business could result in strong second quarter earnings along the same lines as the company's first quarter results, which were the best in the company's 125-year history. CEO Archie W. Dunham said at the company's annual meeting that strong commodity prices should help offset the seasonal decline in European natural gas demand. He described Conoco's oil and gas production growth outlook as the best in the industry, with a 4-5% average annual growth rate. Conoco will continue to maintain "strict cost and capital discipline" while generating a 22% production increase between 1998 and 2001. Conoco's operating costs were cut by 20 cents a barrel in 1999 "Last year, 50% of our wildcat exploratory wells were potentially commercial, improving on a 30% success rate the previous year," he said. "This year, we plan to drill 25-30 wildcat wells in the Gulf of Mexico, Vietnam, Nigeria and other locations."

The National Energy Marketers Association (NEM) lauded efforts by the New York legislature to reduce energy taxation in the state by $1.2 billion. If Gov. George Pataki signs the measure, New York will begin a four-year phase-out of both the gross receipts tax (GRT) on energy and the natural gas importation tax. "Taxing competitive energy markets during its infancy is a major issue that New York and other states are facing. We are pleased that New York chose to implement real tax reductions as competitive markets are starting to emerge," said NEM President Craig Goodman, a former director of energy tax policy under Presidents Reagan and Bush. "New York is starting to make real progress toward opening its energy markets for competition. By cutting existing energy taxes, the governor and legislature are taking the right steps to promote energy price competition and to increase the competitiveness of all business in New York." NEM is a national, non-profit trade association representing a regionally diverse cross-section of wholesale and retail marketers of natural gas and electricity as well as other energy-related companies.

The American Gas Association (AGA) has created a new web site to help natural gas utilities focus more effectively on major supermarkets, restaurants and other national and regional accounts - and to inform those customers about new natural gas technologies and purchasing options. AGA members can sign on to to access information provided by national customer account representatives to AGA staff such as preferences for natural gas equipment and appliances. Supermarkets and other chains "centralize their energy management function at a national or regional office. As a result, local natural gas utilities may not be aware of the customer's current and future equipment and load management needs," said Walter Woods, AGA director of business development. The website also will have state-by-state updates on opportunities for competition and a monthly newsletter, PIPEline.

Allegheny Energy Solutions formed a strategic alliance with distributed generation developer Capstone Turbine. "As the world's leading microturbine manufacturer, Capstone enhances our range of on-site solutions and provides us with a quality product to offer to our customers," said David Cole, director of Allegheny Energy Solutions. "We believe there will be significant growth of distributed generation opportunities over the next five to 10 years, and Allegheny Energy is seizing opportunities in this growing market." As part of the alliance, a Capstone MicroTurbine was installed at the site of Allegheny Energy's Mitchell Power Station in New Eagle, PA. Allegheny will monitoring the technical and economical characteristics of the device and identify new applications. Allegheny Energy, Inc. is a diversified energy company headquartered in Hagerstown, MD. Allegheny Power delivers electric energy to about three million people in parts of Maryland, Ohio, Pennsylvania Virginia, and West Virginia.

Allegheny Power's acquisition of Mountaineer Gas, West Virginia's largest natural gas provider and a wholly owned subsidiary of Energy Corporation of America, was approved by Public Service Commission of West Virginia (PSC) May 11. The acquisition adds 200,000 new natural gas customers in a region where it already provides other energy services. It will grow Allegheny's service territory to more than 31,000 square miles and its customer base to 1.6 million customers. The Federal Trade Commission/Department of Justice has approved the acquisition. It still requires the approval of the Securities and Exchange Commission. Closing could occur sometime in the third quarter.

The proposed merger of LG&E Energy Corp., the parent of Louisville Gas & Electric, and PowerGen Plc of the United Kingdom moved one step closer to reality yesterday with the approval of the Kentucky Public Service Commission. "We believe the Kentucky commission's timely decision helps us stay on track for closing this merger in approximately seven to nine months," said LG&E Chairman and CEO Roger Hale. The merger still must be approved by the Virginia State Corporation Commission, where LG&E Energy serves several counties under the name Old Dominion Power. A decision in Virginia is expected in late July. Also, approvals are required from the shareholders of each company, FERC, the Securities and Exchange Commission and the Federal Trade Commission. The merger will create a global energy company with assets of nearly $12 billion and total revenues of $8.7 billion, serving four million customers worldwide.

The Department of Transportation's Office of Pipeline Safety (OPS) gave Olympic Pipeline Co. the go-ahead to perform additional testing on the section of the product pipeline that was closed following an explosion in Bellingham, WA, that killed three last June. The OPS directed Olympic to test the integrity of the 16-inch pipeline segment which runs from Ferndale, WA, to Allen using two types of in-line inspection devices, also know as "smart pigs." The agency "will not allow this pipeline to reopen until we have addressed every known risk to the safety of this pipeline using state-of-the-art technology," said Kelly S. Coyner, of the Research and Special Programs Administration, which oversees OPS.

El Paso Energy's Petal Gas Storage said it plans to proceed with the construction of a third salt cavern at its existing facilities in Mississippi based on the success of an open season, which ended May 5. It noted it received service requests in excess of the capacity proposed in the open season, and is now in the process of evaluating the bids. The proposed expansion, if approved by FERC, would add 5 Bcf of working gas storage capacity to Petal's existing storage facilities in Hattiesburg, MS, giving the storage company a total of 15 Bcf of actual working gas capacity and 1.5 Bcf/d of withdrawal capacity.

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