The New York State Public Service Commission last week approved several items that it says will ultimately benefit consumers, including a request to transfer ownership of two electricity generating facilities in the state and two items that would give refunds to natural gas customers this winter. PSC approved a joint request from Central Hudson Gas and Electric Corp., Consolidated Edison Co. of New York Inc., Niagara Mohawk Power Corp. and Dynegy Power Corp. to transfer ownership of the Danskammer and Roseton electricity generating facilities near Newburgh, NY to Dynegy for $903 million. Net proceeds from the sale, which will amount to about $364 million after deductions, would be used to benefit ratepayers of the three utilities involved. Danskammer and Roseton are fossil-fueled generating plants located adjacent to each other on the Hudson River. Danskammer is capable of generating 500 MW of electricity; Roseton is capable of producing 1,200 MW. NYPSC also approved an interim natural gas service plan to continue the competitive restructuring efforts of two New York downstate natural gas distribution companies, KeySpan Energy Delivery New York and KeySpan Energy Delivery Long Island. The interim plan, in effect from Jan. 1, 2001 through June 30, 2001, maintains current rates for delivery service and provides customers with a one-time winter bill credit if the costs of purchasing gas for customers in December exceed a predetermined price threshold. The commission also approved plans by Niagara Mohawk Power Corp. and Rochester Gas and Electric Corp. to accelerate refunds this winter to natural gas customers totaling $14.1 million for Niagara Mohawk and $5.7 million for Rochester Gas. Con Ed also was granted a delay on a gas surcharge until after the winter season and the commission approved another request by Niagara Mohawk to provide $110 in bill credits this winter to eligible low-income customers who heat with natural gas.

British-based energy and home services company Centrica plc has completed its acquisition of coveted Energy America LLC, announcing it will take full ownership and management control of the gas and electricity marketer that serves nearly 400,000 U.S. residential and small business customers. Centrica, which claimed its first stake last summer, picked up the outstanding 73.5% stake held by Sempra Energy for $56 million in cash. The agreement follows Centrica’s recent acquisition of Direct Energy Marketing Ltd. in July, which included a 27.5% stake in Energy America (see NGI, July 10). Centrica now has full ownership of Energy America’s customer base, which is centered in Georgia, Maryland, Michigan, New Jersey, Ohio and Pennsylvania, giving it a platform to develop its U.S. market. The acquisition also creates an opportunity to integrate the company into Centrica’s Direct Energy operations in Toronto and its energy resources division in Calgary. Direct Energy, the largest unregulated natural gas retailer in North America, has about 820,000 customers mostly in Ontario. It also owns and operates natural gas reserves in Alberta, which provide up to 20% of its required supply. Direct Energy’s customer services unit, Natural Gas Wholesalers, provides marketing and call center services to Direct Energy and Energy America customers – giving Centrica the opportunity to secure more customers and more important, to secure inroads into not just Canada but the U.S. marketplace as well. To consolidate Direct Energy’s ability to serve existing and future customers, Centrica acquired Canadian-based Avalanche Energy Ltd. earlier this month for C$253.5 million. The Canadian gas producer was set up in 1997, and nearly 90% of its assets are gas producing. Energy America was jointly developed by Direct Energy Marketing and two subsidiaries of Sempra Energy, Sempra Energy Trading and Sempra Energy Information Solutions in 1998. The transaction is expected to close by the end of the first quarter of 2001 following regulatory approvals.

The Colorado Interstate Gas Co. officially filed a plan with FERC Dec. 4 to increase pipeline capacity from its Cheyenne Hub area south to Front Range markets. CIG’s proposed $72 million expansion would include 84 miles of 20-inch pipeline and two generators along the eastern slope of the Rocky Mountains to a planned 480 MW power plant south of Colorado Springs. The lateral will run from CIG’s Watkins Station, east of Denver, following existing CIG pipeline right-of-way to a meter station south of Colorado Springs. The planned route will deviate from the existing right-of-way around areas in Douglas County, CO. The proposal followed an open season for expanding parts of its system serving all markets between Cheyenne Hub and Valley Line delivery points. It would have an in-service date of Dec. 1, 2002, according to CIG. One part of the pipeline would be 35 miles long, with a 24-inch looping facility, while another 84 miles would have a 20-inch pipeline loop. Construction is scheduled to begin in April 2002, pending FERC approval. The pipeline would be expanded to deliver up to 336,000 Dth/d to a power plant scheduled to be constructed by Front Range Power LLC, jointly owned by Colorado Springs Utilities (CSU) and Coastal Power Co., a Coastal Corp. subsidiary. The facility would use two gas turbine generators and is scheduled for completion in the fourth quarter of 2002. CSU will use the power to meet the increasing demand in the Colorado Springs area, and capacity will be marketed to other users in the state and surrounding states.

Atlanta Gas Light Co. has implemented a seasonal rate plan timed to roll out during its February 2001 billing cycle by its natural gas marketers. The plan, approved by the Georgia Public Service Commission, would make billing follow traditional winter and summer usage patterns. Until now, Atlanta Gas Light charged customers for distribution services via its base charge, which it passed along to customers at the same rate for every month. For customers, the new rates would result in higher base charges in the winter and lower base charges in the summer. Interstate pipeline transportation charges and the commodity cost of natural gas would not be affected by the new rate design, according to Atlanta Gas Light. As part of the transition, each residential customer will receive a $14 a month refund from the Universal Service Fund in February and March 2001. Also, each customer with a senior citizen discount would receive another $10 refund for the first three months of 2001.

Mitchell Energy announced that follow-up drilling in two Texas Gulf coast exploratory plays has increased natural gas production by 30 MMcf/d and oil production by 550 b/d. For November, the company’s overall daily production averaged 344 MMcf of gas and 5,400 bbl of oil, excluding the effect of a two-day shutdown of its Bridgeport plant to complete connections that will increase the plant’s throughput capacity by 50% in late December. “Discovery of the Lower Wilcox and Lake Creek area wells is another example of our ability to combine 3-D seismic technology with our extensive knowledge in core field areas to add new reserves,” said CEO George P. Mitchell. “While the Barnett shale play in North Texas is clearly the driver for much of the company’s volume growth, drilling in our other core areas can also be quite attractive and add significant production as well.”

Gothic Energy stockholders approved the company’s merger with Chesapeake Energy. Of the outstanding shares of Gothic stock, 72.8% voted in favor of the proposal. The closing of the merger is expected to occur on Jan 15 at which time Gothic shareholders will be entitled to receive 0.1908 shares of Chesapeake common stock for each share of Gothic common stock, subject to possible adjustment.

Reliant Energy Power Generation Inc. said it is buying the 150 MW Sunrise Power Plant in Las Vegas and a 222 MW power purchase agreement relating to three adjacent gas turbine generation units known as Sun-Peak from Sierra Pacific Resources for $33 million. The deal, which is subject to regulatory approvals, gives Reliant about 372 MW of generation capacity. In addition, Reliant and Sierra Pacific subsidiary Nevada Power entered into a short- term power supply agreement. Sierra Pacific said the sale price of the Sunrise Power Plant was $106 million, subject to taxes and other adjustments at closing. In conjunction with the purchase, Nevada Power negotiated the right to buy energy and ancillary services from Reliant for agreed upon prices from closing until March 1, 2003, at a cost of $73 million based on time of closing. This will result in a net price for the generating plant upon closing of approximately $33 million. “With the sale of Sunrise Station, divestiture of our generation assets is nearly complete. The buyer is a leader in power generation and has already established a strong presence in southern Nevada,” said Walter M. Higgins, CEO of Sierra Pacific Resources. “We’ll soon be able to devote all our resources to building the best energy transmission and distribution company in the West.” Doug Divine, senior vice president for generation development at Reliant Energy Wholesale Group, noted that the purchase enhances Reliant’s growing portfolio of generation assets in the region. In October, Reliant announced plans to build a 500 MW gas-fired plant called Reliant Energy Arrow Canyon, which will be about 20 miles north of Las Vegas. Construction is planned to begin in early-to-mid 2001, with commercial operation scheduled in the summer of 2003. In addition, the company is co-owner and co-operator of El Dorado Energy, a 480 MW gas-fired plant located southeast of Las Vegas and began commercial operation in the summer of 2000.

KeySpan Corp. said it anticipates its 2000 earnings, excluding the impact of any transaction or restructuring charges, will be $2.40 per share, significantly ahead of the current First Call consensus estimates of $2.28 per share. Strong earnings are expected to result from solid performances across all business segments, especially from the electric, exploration, and production segments. In addition, the energy-services business should report its first annual profit in 2000. “We expect to be able to increase our earnings in 2001 by 10%, ranging from $2.60 to $2.65 per share, well ahead of the current First Call consensus of $2.48 per share,” said CEO Robert B. Catell. KeySpan has had a record level of gas customer conversions from oil to natural gas, primarily on Long Island. In addition, more than 1 MMcf of mainline gas distribution pipe is expected to be installed this year as the system is expanded to serve new areas. In New England, the company intends to achieve its growth targets resulting from the acquisition of Eastern Enterprises and EnergyNorth. Currently, the company estimates that the special charges resulting from acquiring Eastern Enterprises and EnergyNorth in November will amount to $75 million, which will be reported in the fourth quarter. Including these charges, earnings per share for fiscal year 2000 are expected to range from $2.05 to $2.10. KeySpan is the largest gas distributor in the Northeast, with 2.4 million gas customers and more than 13,000 employees. KeySpan also is the largest investor-owned electric generator in New York State and operates Long Island’s electric system.

New Jersey Resources announced the launch NJR Home Services Company, an unregulated subsidiary that offers the home-appliance repair and contract warranty services previously provided by its regulated subsidiary, New Jersey Natural Gas. In a written Order signed on Dec. 6, the New Jersey Board of Public Utilities (BPU) approved the transfer of the competitive, appliance repair services previously offered by NJNG to NJR Home Services.

Pacific Gas and Electric Company announced changes to its REACH emergency assistance program in order to provide more help to customers who have difficulty paying high winter heating bills. Relief for Energy Assistance through Community Help (REACH) is sponsored by PG&E and administered by The Salvation Army. The program provides once-a-year assistance to low-income customers who experience a sudden change in the ability to pay their energy bill. Under the expanded program, customers are now eligible if their incomes are up to 200% of the federal poverty level, or about $34,100 for a family of four. Previously, the income limit was 150%. Additionally, for December through April 2001, the maximum assistance level will be $300 (up from $200) in anticipation of higher gas bills. “With natural gas prices high across the nation, we’re very concerned that many of our customers will have a difficult time paying to heat their home this winter. So, we’ve expanded our low-income emergency assistance program in order to help more people and provide them with a greater amount of help,” said Pacific Gas and Electric CEO Gordon R. Smith. REACH, which is privately funded by donations from customers and employees of Pacific Gas and Electric, has helped more than 400,000 families over the years, he said.

Sempra Energy Solutions announced a contract to supply fuel to the Los Angeles County Metropolitan Transportation Authority (MTA) natural gas bus fleet. The MTA’s board approved a contract to buy 28 million therms of gas over the next year, under a contract that is renewable for two additional years. The first year of supply is valued at well over $14 million, with the duration of the agreement totaling up to $50 million. The Los Angeles County MTA currently has a fleet of 1,025 buses that use compressed natural gas (CNG) as their only fuel source. The MTA plans to add 25 new CNG buses to the fleet every month for the next four years. “By working with Sempra Energy Solutions, we will save nearly $400,000 per year in fuel costs for our CNG fleet,” said Tom Conner, executive officer for transit operations of the Los Angeles County MTA. Diesel-powered transit buses are 76 times more toxic than those running on natural gas.

OGE Energy Corp. reported that its natural gas pipeline subsidiary, Enogex, has entered into a long-term agreement to transport natural gas on its Transok pipeline to fuel Calpine Oneta Power L.P.’s 1,100 MW power facility which is still under construction near Tulsa in northeastern Oklahoma. The Transok pipeline will provide up to 185 MMcf/d to the gas-fired plant upon completion. Testing of the Oneta Energy Center will begin in November 2001, and commercial operation is expected to begin in June 2002. Calpine Corp. is the lead developer on the project.

©Copyright 2000 Intelligence Press, Inc. All rights reserved.The preceding news report may not be republished or redistributed in wholeor in part without prior written consent of Intelligence Press, Inc.