San Jose, CA-based Calpine Corp. announced Monday it has bought the
rights to build, own and operate a $510 million, 850 MW natural gas-fired
electric generating plant along the Ohio River in Hamilton Township, Lawrence
County, OH. The plant, called the Lawrence Energy Center, is targeted for
starting operations in 2004. Calpine said it bought the plant rights from
Hanging Rock Energy Project, LLC, a wholly owned subsidiary of a Boston-based
firm that had started the preliminary development efforts for the project.
The proposed plant, which will be designed so it can provide peak-demand
capacity up to 1,100 MW and 850 MW on a baseload basis, will interconnect
with Columbus, OH-based American Electric Power at its Hanging Rock substation,
from which the plant could sell into four or five regional markets, including
Ontario, Canada. The Lawrence project is Calpine's second in Ohio; it is
currently seeking state siting approval for a proposed 540 MW generating
plant, the Fremont Energy Center, in Sandusky Twp. To date, Calpine, which
announced several purchases and projects in several states last week, now
has about 26,800 MW of baseload capacity and 5,100 MW of peaking capacity
in operation, under construction or announced development in 27 states
and Alberta, Canada.
The Michigan Public Service Commission last week approved orders for
Dearborn, MI-based CMS Energy Corp. to authorize securitization of $469
million in stranded electric utility costs, expand the gas customer choice
program and authorize accounting changes to mitigate future increases in
the cost of natural gas. "These orders on electric and natural gas
utility issues represent the final major steps in electric and natural
gas restructuring for Consumers Energy and remove the last significant
regulatory uncertainties affecting Consumer Energy's gas and electric utility
businesses," said CMS CEO William T. McCormick Jr. Under MPSC's orders,
CMS Energy's principal subsidiary, Consumers Energy, may proceed with the
sale of bonds under the state's Consumer Choice and Electricity Reliability
Act of 2000, which allows the company to offset, on a prospective basis,
the earnings impact of a 5% residential electric rate reduction put into
effect in June. CMS said that it expects to issue the bonds by the end
of the year. Consumers Energy's gas customer choice program, which begins
April 1, 2001, also will be expanded, re-establishing a gas cost recovery
mechanism under which the utility may recover increased natural gas commodity
costs. MPCS also will allow Consumers Energy to reclassify recoverable,
low-cost base gas in the company's gas storage reservoirs as working gas,
which will allow the company to immediately begin to average the gas with
higher cost purchased gas. The gas accounting order eliminates the need
for the company to recognize any further losses. Under an expanded choice
program, up to 600,000 Consumers Energy customers will be eligible to participate,
with up to 900,000 customers expected by April 1, 2002. All 1.6 million
gas customers would be eligible to select an alternate natural gas supplier
beginning April 1, 2003.
Internet commerce system Enermetrix picked up its first regulated customer
last week, when ValuSource Energy, a subsidiary of Pennsylvania's Duquesne
Light Co., said it would use the network to serve its business, government
and industrial customers. The Enermetrix system will give DLC's customers
the option to purchase their energy online through the Web-based network.
Pennsylvania's Electric Choice program allows energy users the freedom
to choose their electric supplier. ValuSource will begin brokering electricity
in the Commonwealth and also pursue new customers throughout southwestern
Pennsylvania, including DLC's large customer base in Allegheny and Beaver
counties. For Enermetrix, a unique feature of the deal with ValuSource
is that it is the first sale of its licensed software to a regulated side
of the utility business. Enermetrix has 13 similar network deals, said
co-chairman Jeff De Weese, but the other ones are with unregulated utilities.
The company uses technology to automate the value chain from wholesale
energy markets to retail meters, and also operates a marketplace for commercial
and industrial energy contracts. Still a private company, De Weese said
there are no plans to take the company public "just to make money."
He said there would have to be a value to the shareholders. "We're
very focused on liquidity and scalability." To date, he said, Enermetrix
has 47 suppliers signed up to its license its system, with 13 different
network members. In August, Spokane, WA-based Avista Corp. evaluated 30
retail energy e-commerce sites, and found that Enermetrix was one of three
that could handle aggregated customer loads (see NGI, Aug.
7). Avista said it would use the information to evaluate the benefits
of buying power online for end-users. The evaluation has not been released
yet. Enermetrix's investors include InSight Capital Partners, GE Capital,
DQE Enterprises Inc., Cinergy and Unitil Corp.
Dallas-based Pioneer Natural Resources Co. is acquiring the working
interests in 12 non-producing Gulf of Mexico blocks from a Baker Hughes
Inc. subsidiary for $23 million, including a one-third interest in the
Marathon-operated Camden Hills natural gas discovery in Mississippi Canyon
348, which is expected to begin gas production in 2002. The Camden Hills
field has been jointly developed by Elf-operated Aconcagua and BP-operated
King's Peak fields in the Canyon Express Project. Pioneer already had a
23% working interest in the Aconcagua field, and with the Camden Hills
acquisition, Pioneer would own 18% interest in the 500 MMcf/d project.
Pioneer's buy also includes six shelf blocks and five other deepwater blocks,
with working interest in the shelf tracts varying between 5% and 30% in
each. The company would have a one-third interest in each of the deepwater
blocks. Pioneer now has 15 deepwater blocks, with 10 added this year alone,
acquired through federal lease sales and this week's announced acquisition.
Four of the 15 blocks are Pioneer-operated. Pioneer also has added to its
Canadian holdings, obtaining 100% interest in its Chinchaga gas field in
northeast British Columbia. It acquired the remaining 13% interest from
Triumph Energy Corp. for $9 million earlier this month. The acquisition
is expected to add 1.5 MM boe proved reserves and production of 475 boe/d.
As many as 70 extension and infill drilling locations are planned in the
field in the next three drilling seasons.
The Houston Exploration Co. reported it intends to add more production
to its hedging program for November and December of this year to help off-set
losses accrued during the last two quarters. The company plans to add 40,000
MMBtu/d to November hedged production and 50,000 MMBtu/d in December. Houston
Exploration hedged these volumes with swap prices averaging $5.10 per MMBtu
in November and $5.19 per MMBtu in December. The additional hedging raises
the ceiling price from $3.55 to $4.05 on hedged volumes for the period.
The company said it has not committed to any further hedges, but is currently
evaluating these opportunities as part of its risk management policy.