Dallas-based Energy Transfer Equity LP (ETE), the owner of the general partner of Energy Transfer Partners LP (ETP), agreed to acquire the general partner of Regency Energy Partners LP for close to $300 million. ETE would use preferred units to acquire the full stake in Regency’s general partner from an affiliate of GE Energy Financial Services, a unit of General Electric. Under the terms of the transaction agreements, ETP is to transfer a 49.9% interest in Midcontinent Express Pipeline LLC (MEP) to ETE in exchange for the redemption of 12.3 million ETP units. ETE then would exchange the interest in MEP with Regency for 26.3 million new Regency common units. Once completed, ETE would own about 22% of Regency’s outstanding common units and 28% of ETP’s outstanding common units. Kinder Morgan Energy Partners would retain its half stake in MEP.

Peregrine Midstream Partners LLC unit Ryckman Creek Resources LLC was cleared to use FERC’s prefiling review process for its proposed Ryckman Creek Gas Storage Project in Uinta County, WY, near the Opal Hub. The project involves converting an existing partially depleted oil and gas field, known as the Ryckman Creek Nugget Unit, into a gas storage field. The first phase is being designed for 25 Bcf working capacity of high-deliverability, multi-cycle (HDMC) storage. Phase I will include maximum injections exceeding 200 MMcf/d and maximum withdrawals of approximately 360 MMcf/d. The project will be subject to regulation as an interstate gas storage facility under the Natural Gas Act. Ryckman Creek intends to file an application for certificates of public convenience and necessity at the Federal Energy Regulatory Commission in the fall for the project, which will charge market-based rates. A nonbinding open season is scheduled later this year. Construction could begin in spring 2011, with an in-service date in April 2012.

Pacific Gas and Electric Co. (PG&E) is betting its short-term future on a $1.1 billion general rate case targeted to begin in 2011, but the California Public Utilities Commission‘s (CPUC) independent consumer unit, the Division of Ratepayer Advocates (DRA), is opposed. Hearings are scheduled to begin June 21, and a CPUC administrative law judge is scheduled to make a proposed decision in November, with a final decision from regulators due before the end of this year. DRA has urged regulators to grant PG&E no more than a 4.1% ($227 million) rate increase, compared with the utility’s proposed 19.7% ($1.1 billion) hike in annual revenues.

Staff of the Delaware River Basin Commission (DRBC) is drafting regulations for natural gas well pad projects in shale formations in the river basin, which would impact Marcellus Shale operations. Commissioners plan to consider specific gas well pad applications for the Delaware River Basin after the new regulations are in place. The DRBC authority covers land draining into the Delaware River from Delaware, New Jersey, New York and Pennsylvania. In 2009 the DRBC voted to require that energy companies obtain approval before beginning any gas extraction project in shale formations within the drainage area of the basin’s special protection waters (see NGI, June 1, 2009).

Quicksilver Resources Inc., whose natural gas portfolio is spread across North America, is reducing its 2010 capital program “to reflect reduced planned drilling and completion activities” in the Barnett Shale. Quicksilver’s 2010 capital program now is expected to total around $510 million. Production is forecast to average 360-370 MMcfe/d, which is 11-14% higher than 2009 average daily volumes. The Fort Worth, TX-based producer also reported that it reversed its year-ago losses in 1Q2010, with net income of $8.2 million (5 cents/share), compared with a net loss of $569.0 million (minus $3.37). In 1Q2010 average production was about 318 MMcfe/d, down from 332 MMcfe/d in the year-ago period.

A field investigation by an independent consulting firm has begun to test advanced meters being installed by Pacific Gas and Electric Co. (PG&E), California regulators announced. The San Francisco-based combination utility has been under fire concerning the accuracy of the new smart meters. The consulting firm will assess the veracity of the utility’s advanced metering implementation program. The field investigation will target meter accuracy, end-to-end system performance, customer high-bill complaints, and the smart meter deployment practices used by PG&E. The outside firm will measure the accuracy of PG&E’s new metering system now and since the first meters were put in place.

The California Energy Commission (CEC) is providing an additional $26 million for rebates to get consumers to replace inefficient appliances, and an added $10 million to convert passenger and heavy duty vehicles to run on alternative fuels, including liquefied natural gas (LNG). Another $37.4 million will come from Department of Energy (DOE) stimulus package funds that the CEC is helping administer. Separately, the CEC announced that it has approved $10.1 million in grants for the South Coast Air Quality Management District (AQMD) to be used to demonstrate plug-in hybrid electric technology for a broad range of vehicles and to replace 180 heavy-duty diesel trucks hauling goods from the Ports of Los Angeles and Long Beach.

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