NGI Staff Reports

Metromedia Co. has purchased a majority interest in New Jersey-based CPM Energy Inc., formerly Cogen Marketing Power, for an undisclosed amount of cash, making it possibly the largest aggregator of natural gas and electricity in the nation.

Texas Utilities last week said it approached Britain’s The Energy Group with “possible interest in the company” in competition with PacifiCorp, which made a failed tender offer to acquire the company back in June. Discussions between Texas Utilities and Energy Group “are at a preliminary stage and may or may not lead to an offer being made for the company,” Texas Utilities said.

Although El Paso was granted a waiver that allows it to begin collecting revenue from its $70 million transportation contracts with NGC Corp. effective Jan. 1 subject to refund, FERC has called for a technical conference on the strongly protested issue. The Commission found few problems with the contracts, including those for smaller amounts of capacity with three other shippers. But because the contracts were so complex, so hotly protested and cover such a large amount of capacity, they deserve a closer look, the Commission said.

Coastal’s exploration and production operating profits rose by20% for 1997, bolstered by a 24% increase in gas production. Infact, the company’s gas segment continued its tradition asCoastal’s largest contributor to profits. Gas segment operatingprofit for 1997, including joint venture earnings, was $487.3million, up from $378.3 million in 1996. However, as with otherpipeline companies reporting year-end results, Coastal’s pipes sawa decrease in throughput to 2,190 Bcf in 1997 from 2,246 Bcf in1996.

Capitol Hill observers said last week they doubted Rep. Dan Schaefer’s (R-CO) decision to retire from the House at the end of his term later this year would significantly hamper efforts to move electricity restructuring legislation along in Congress, but they still believe the odds are against a bill being passed this year.

A winning bid for a natural gas distribution network in the strongly industrial Mexican state of Tamaulipas is to provide Houston Industries Incorporated (HI) with the foothold it needs in Mexico to seek acquisition of larger gas distribution systems, plus launch development of gas-fired cogeneration projects for industrial and manufacturing facilities.

The Kansas City Board of Trade’s board of directors have submitted new rules encouraging natural gas “strip” trading in its Western Natural Gas Options contracts to the Commodity Futures Trading Commission (CFTC) for approval. The exchange already has rules governing strip trading in gas futures. The new rules allow strips to be quoted and traded as a single price. Absent CFTC rejection, the new rules will go into effect Feb. 9.

Gas marketers and producers credited FERC last week for taking a “relatively aggressive stance” in finding Natural Gas Pipeline Company of America (NGPL) had committed “significant” violations of its marketing-affiliate rules. But some seriously doubted that by itself the $8.84 million civil penalty imposed by the Commission would be enough to block future unlawful conduct by NGPL or other pipelines.

A conflict has erupted in Michigan between Attorney General Frank J. Kelley and the Michigan Public Service Commission (PSC) over two recent PSC orders involving Consumers Energy and Michigan Consolidated Gas. The attorney general said the orders, which involved “radical” rate changes at Consumers and a reduction in depreciation costs at MichCon, will deprive Michigan ratepayers of millions of dollars and “simply continue the trend of recent orders [that] shows that the [PSC] lacks any real interest in protecting utility customers.”