NGI Staff Reports

The $5.4 billion merger of Keyspan Energy, parent of the Brooklyn Union Gas (BUG), and the Long Island Lighting Company (LILCO) crossed a major hurdle last week as the New York State Public Service Commission approved a settlement agreement signed by PSC staff, consumer and environmental advocates, labor unions, and Trigen-Nassau Energy. The agreement paves the way for merger-related savings of $100 million/year to be passed on to LILCO’s and BUG’s 1.6 million gas customers and 1 million electric customers. It also caps corporate earnings and installs a new revenue sharing mechanism.

Oneok announced the sale last week of some processing assets, and the company said it is looking for new opportunities, possibly other processing plants, distribution systems or reserves.

Maritimes &Northeast Pipeline (M&ampNE) is moving down the home stretch as its Phase II facilities in central and northern Maine passed preliminary environmental review by FERC staff with minimal required changes.

The multiple protests filed against El Paso Natural Gas’ Bondad Expansion project on its San Juan Basin pipeline system are “based on misstatements of fact, misinterpretations of El Paso’s rate settlement and tariff, and sheer speculation, and should therefore be dismissed,” the pipeline company told FERC in an answer to the protests. Contrary to the claims of Arizona Public Service, Burlington Resources, the California Public Utility Commission, Southern California Gas and several other firms, existing shippers will be no worse off as a result of the project and in fact will be “significantly better off in terms of additional revenue credits, capacity release opportunities and other benefits,” El Paso said.

Nova Gas Transmission subsidiary Nova Pipeline Ventures Limitedpartnership announced plans to build a $40 million natural gaspipeline to serve industrial customers in the Fort McMurray region.The 67-mile, 20- and 30-inch diameter pipeline will start at NGT’sBuffalo Lake compressor station on the Leige lateral innortheastern Alberta and extend to Suncor Energy oil sandsupgrading facility and potentially to another facility owned byNovagas Canada Ltd. (NCL). Initial capacity of the pipeline isexpected to be 250 MMcf/d of gas.

Columbia Gas Transmission supplemented the Millennium Pipeline project application (Docket No. CP98-151-000) at FERC last week with details of its proposed abandonment of the Milford Compressor Station and more than 200 miles of pipeline that make up most of its A-5 line in New York.

The 18,300 MW of new gas-fired power plants planned in the Northeast will be the litmus test of the gas-fired merchant power plant structure in the U.S., Resource Data International (RDI) of Boulder, CO, suggested in a new analysis.

AlliedSignal Power Systems is gearing up to tackle the distributed generation microturbine market, which is expected to take off in 1999. This year it is scheduled to produce only 150 of its TurboGeneratorO units, each with 75 KW capacity, but the company has already presold 70% of the 5,000 units it was planning to produce next year, and is already thinking about increasing production. It originally planned to double production to 10,000 units in 2000, but those numbers may also change.

PacifiCorp last week upped its bid for Britain’s The Energy Group to $12.62 per ordinary share, a 10% increase over the original bid made June 13. And FERC gave its blessing to the sale of assets held by Citizens Power, an Energy Group subsidiary. The asset sale is necessary for PacifiCorp’s bid to go forward.