In an attempt to win approval for their merger from regulatorsin Washington State, ScottishPower and PacifiCorp announced theyhave agreed to give retail electric customers in the state a mergercredit directly payable on customers’ bills of $3 million per yearfor four years beginning in January 2001. The deal is similar tothe those already offered to PacifiCorp customers in Oregon andIdaho. The merger credit, which equates to a reduction of 1.7% offcustomers’ bills, includes Washington’s share of the $10 millioncost savings that ScottishPower had previously committed to passthrough to customers in the state. The merger partners will be ableto offset the $3 million merger credit in each of the four years tothe extent that the cost reductions are reflected in rates. Theproposed marriage requires the approval of regulators in the fivewestern states served by PacifiCorp – Washington, California, Utah,Idaho, Wyoming and Oregon. All have either approved the transactionor have recommended it for approval by their respectivecommissions. It also has passed muster at FERC and the Securitiesand Exchange Commission, but still awaits clearance by the NuclearRegulatory Commission.
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Transportation Notes
Sonat declared a force majeure in connection with maintenancethat began Monday at its No.2 delivery point into East TennesseeNatural Gas and will last for about three weeks. No nominationswill be scheduled at the point during this project, Sonat said.
Hype or Not, Prices Continue Rising Into Weekend
Arguments likely raged all day Friday over whether the gasmarket was overreacting to Tropical Storm Bret or not. But as evena member of the “overhyped” camp reluctantly conceded, there was nodenying that cash prices ignored mild northern market-area weatherand the usual drop in weekend load to achieve gains of up to adime. The smallest showings of flat to only about a nickel highercame at western points, which are more insulated from potentiallosses of Gulf of Mexico production.
‘Hurricane Hype’ Gives Bulls Taste of $3.00 Futures
For the third morning in a row natural gas futures gapped higherat the open before continuing upward as traders covered shortpositions in anticipation of Tropical Storm Bret becoming the firsthurricane in the 1999 Atlantic season. But after notching a $3.015high shortly after noon, the September contract was hit with a waveof profit-taking that delivered the spot month back down to settleat $2.938. Estimated volume was healthy, with 99,927 contractschanging hands.
AZ Regulator Accused of Tampering with SW Gas Merger
The bloody battle over the right to merge with Southwest GasCorp. has recently claimed another victim: Arizona CorporationCommissioner (ACC) Jim Irvin. Federal and state authorities areinvestigating allegations that the state regulator illegallyinfluenced Southwest Gas to go with Oneok Inc. as a merger partnerinstead of rival suitor Southern Union Co.
TransCanada Cites Load Loss
With just over a year to go before the new Alberta-to-Chicagolink, Alliance Pipeline, goes into service, TransCanada PipeLinesand affiliate Nova Gas Transmission already are feeling the impactof the competition.
Lender’s Call for Faster Coho Payments
The financial troubles of Coho Energy reached a new level lastweek as the Dallas-based company received a formal notice from itslenders that the obligations under its $240 million credit facilityhave been accelerated and the lenders intend to exercise all rightsand remedies to satisfy those obligations.
New California Cogen Not Enough
New cogeneration plants are on the move in California, but theymay not be built fast enough to keep up with growing demand.
Industry Briefs
Anadarko Petroleum Corp. announced yesterday it had retainedMadison Energy Advisors to market a package of its oil and gas assetsin Texas. The properties, located in the Hemphill Field area ofHemphill County, TX, include 83 completions from 70 wells with workinginterests ranging from 5% to 100%. Current gross daily production fromthese properties is approximately 82 BOPD and 8.1 MMcf/d. Anadarko isalso looking to sell the surrounding midstream assets including theHemphill Gathering System, which gathers low-pressure wellhead gas anddelivers it to Williams’ Hobart Ranch Plant. This four to eight inchdiameter pipeline is approximately 50 miles long and currently has 112wells connected. The properties will be sold through a negotiatedsale, with a data room scheduled to open in August. For furtherinformation contact Clint Wetmore at Madison Energy Advisors,281-876-2244 or check Madison’s web page atwww.MadisonEnergy.com.
Transportation Notes
NOVA returned to its normal +10/-10% tolerance range for dailyimbalances Friday after having changed the range to +2/-18%Wednesday. The two-day change was made in order to reduce linepackto target levels, which was necessary before proceeding withmaintenance on Schrader Creek Compressor Station, NOVA said.