Ivanhoe Energy and Unocal have entered into a 50-50 joint venture to explore for oil and natural gas in East Texas will focus on the Bossier Sand prospects in more than 46,000 gross acres (37,000 net) in a three-county area. Unocal will become operator and will fund the drilling costs for several exploration wells to offset the $10 million in leasehold, seismic and processing costs incurred by Ivanhoe. Once “investment equilibrium” is reached, the companies will become equal partners. The Bossier sand trend consists of multiple fields and multiple pay zones, with typical wells producing between 2-4 MMcf/d at an average depth of 12,000 feet. Ivanhoe officials noted that Anadarko Petroleum Corp., the area’s largest operator, has drilled more than 300 Bossier wells, achieving a success rate of “virtually 100%.” Drilling is expected to begin on Ivanhoe’s and Unocal’s Lone Star and Creslenn Ranch prospects. Following a successful exploration phase, Ivanhoe intends to project-finance its share of field development costs.

Continuing along its chosen path of focusing on its wholesale and energy risk management businesses, Kansas City, MO-based Aquila Inc. said on Monday that it has sold the retail energy manager services business of UtiliCorp Energy Solutions to Energy Management Resources Inc., a nationwide provider of energy supply management services to commercial and industrial customers throughout the United States. Energy Management Resources is an affiliate of Energy Associates, Inc., which is also a provider of energy management services. Energy Associates is headquartered in Cloquet, MN, but also has offices in Kansas City. The firm has been in the energy management business since 1997. “This acquisition fits well with our existing business of serving the needs of our industrial and commercial customers in this complex arena of natural gas and electric deregulation, said Darrel Palmer, president of Energy Management Resources. According to the companies, UtiliCorp Energy Management will change its name to Energy Management Resources within 45 days and will establish its office in Kansas City.

Spokane, WA-based Avista Corp. has received approval by the Washington Utilities and Transportation Commission (WUTC) to implement a 25% electric rate surcharge to help offset the “extraordinary” cost of electricity the company has purchased to serve its customers. The surcharge will be in effect from Oct. 1, 2001, through Dec. 31, 2002, and according to CEO Gary G. Ely, it will allow the company to recoup its losses and move forward. In the 15 months ending Sept. 30, Avista will have spent more than $190 million for electric energy to serve its customers in Washington. Until the order issued on Monday by the WUTC, Avista had not been able to recover any of these costs through customer rates, Ely said. The order will allow recovery of $125 million, including $71 million in cash by the end of 2002. The commission order will also allow Avista the opportunity to request recovery of the additional amounts in the future. The commission order specifies that Avista will file a general rate case in December. In that filing, Ely said that Avista will “continue its dialogue with the commission on issues that are still unresolved,” including ongoing deferrals, prudence and recovery of extraordinary power costs. The surcharge is subject to refund and will be partially offset by a 7.7% credit from an exchange agreement for residential and small farm customers arranged by Avista with the Bonneville Power Administration. Residential bills for a Washington customer using an average 1,000 kWh of electricity would increase by $7.85/month.

With an eye on developing technologies to improve the efficiency, capacity and reliability of the U.S. electricity infrastructure, the Department of Energy (DOE) announced that seven teams will receive $57 million to begin research on high temperature superconductivity (HTS). The DOE contribution, matched by $60 million in industry funds, will put $117 million toward developing new types of electric power devices, including transmission lines. Superconductivity allows certain materials to carry large electrical current without the resistance losses of conventional materials such as copper. HTS is designed for electric power devices like motors and generators, medical diagnostic technology and power line transmission. The HTS equipment typically is half the size of conventional equipment and has half the energy losses. DOE will provide its cost share over three or four years, and the exact amounts of research by project are still being negotiated, officials said. The seven projects selected to receive funding include the following: To review the projects or for more information, visit the DOE web site at www.energy.gov.

The Shaw Group Inc. and NRG Energy Inc. have agreed to construct two gas-fired power plants, one in Holmesville, MS, the other in Jennings, LA, which together will have a total capacity of 1,520 MW. No financial details were disclosed. The Holmesville, MS, plant will be a 1,200 MW combined-cycle Pike plant. Engineering work already has begun and the project calls for 600 MW to begin operations in the summer of 2003, and an additional 600 MW to begin operations during the fourth quarter of 2003. The second facility is the 320 MW simple-cycle Bayou Cove plant located near Jennings, LA. Engineering work is under way and the plant is expected to begin operations next summer. Shaw, headquartered in Baton Rouge, has been given limited notice to proceed on the two plants and will execute the engineering, procurement and construction services for both plants. NRG, headquartered in Minneapolis, develops, constructs, acquires, owns and operates power generation facilities, with current ownership of 23,383 MW in operation and under construction.

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