Entergy-Koch LP opened for business yesterday, adding a newwholesale energy trading, transportation and marketing company tothe burgeoning marketplace. Formed by subsidiaries of Entergy Corp.and Koch Industries, Houston-based EKLP will deliver, market andtrade power, natural gas and other energy-related commodities,including weather derivatives through Axia Energy LP, Axia EnergyEurope Ltd. and Gulf South Pipeline Co. LP.

It was a double good news day for Entergy, which also postedrecord fourth quarter results, pushing it past Wall Street’sestimates.

The new EKLP startup, which earned final regulatory approvalThursday, ranks Axia Energy as a top 10 energy commodity trader,according to the company, in terms of combined volumes ofelectricity and natural gas traded. It will trade volumes in excessof 1,000 million MW of electricity annually and 5 Bcf/d. It alsowill provide customers with a “broad range” of commodity sourcesand options, which include gas, emissions, power, weatherderivatives and additional risk management tools.

From Koch, the new company’s $1 billion assets include thenearly 9,000-mile Gulf South interstate pipeline network, onceknown as the Koch Gateway Pipeline, a natural gas transmissionsystem and the Bisteneau gas storage facility. Koch also added KochEnergy Trading Inc.

From Entergy, the new company received its power marketing andtrading businesses, which include the U.S.-based Entergy PowerMarketing Corp. and the European-based Entergy Trading andMarketing Ltd. Entergy also contributed an undisclosed cashinvestment.

EKLP CEO Kyle Vann said the new company would provide”dependable, cost-effective gas transportation and supply and we’lloffer energy customers throughout North America and Europe avariety of services to run their businesses and mitigate risk asthe gas and power markets evolve through deregulation.”

Vann said he expects the expanded scope and resources of the newventure to create more growth opportunities for weather derivativesbecause Axia Energy accounts for about 25% of its current trades inthat area.

The eight-member board includes Entergy Chairman Robert v.d.Luft, who will chair EKLP’s board; Entergy CEO Wayne Leonard;Entergy President Don Hintz; Entergy CFO John Wilder; Koch CEOCharles Koch; Koch COO Joe Moeller; Koch CFO Sam Solimon; and CyNobles, senior vice president for Koch.

Entergy, which is merging with FLP Group, finished 2000 withfour consecutive record quarters. Its operating profit in thefourth quarter of 2000 was $70.9 million, or 31 cents a share. Thatcompared with $17.9 million or 8 cents a share in 1999. FirstCall/Thomson Financial had expected the company to earn 20 cents ashare on average. Entergy said the demand for electricity, pushedby cold weather, accounted for the strong earnings.

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