Detroit-based MCN Energy Group Inc. has completed selling its 95% interest in four coal fines plants for $100 million and its interests in two other plants for $32 million to a unit of DTE Energy Co. The transaction was independent of MCN’s pending merger with DTE (see Daily GPI, April 2). MCN built the plants to process fine particles of coal into briquettes for traditional coal markets. Concerns about the plants’ qualification for synthetic fuel tax credits led MCN in 1998 to record a $133.8 million pre-tax write-off of the coal fines project. Because of its completed sale to DTE Energy Services, MCN will record a pre-tax first quarter gain of approximately $125 million.

Union Light, Heat and Power, an affiliate of Cinergy Corp., filed notice with the Kentucky Public Service Commission (KPSC) that it intends to seek a $7 million increase in base rates for natural gas distribution service. It would be its first increase since 1993. Base rates cover the company’s costs to operate and maintain its gas system, and are separate from the gas cost adjustment portion of customers’ bills, which reflects the cost of gas ULH&P purchases. Gas costs are billed to customers on a dollar-for-dollar basis without any profit to ULH&P. ULH&P anticipates filing its formal application with the KPSC in early May with new rates to be effective late this year. “Since our last base rate increase in 1993, we have made significant investments in our facilities and have had increases in labor and other operation and maintenance expenses,” said J. Joseph Hale, Jr., president of ULH&P. “We have kept our base rates stable for eight years, while the cost of living index has increased over 20%.” ULH&P also is initiating a major gas main replacement project to improve reliability over the next 10 years. It will incur $112 million of capital expenditures, which it will seek to recover in future years.

Sempra Energy Trading has acquired a 49% stake in Risk Capital Management Partners, LLC, a risk advisory consulting firm. “This transaction broadens our existing mix of trading and risk management capabilities by adding an independent consulting service company to whom we can direct our customers who seek help identifying commodity and other risks within their businesses and designing strategies to mitigate their exposure,” said David Messer, president of Sempra Energy Trading. Financial terms of the transaction were not disclosed.

Entergy New Orleans, the dual utility serving the city, posted two Request for Proposal notices on the Gulf South Pipeline bulletin board soliciting firm gas storage service to meet a portion of peak-day requirements. Both RFPs specify terms of five years, but one is for a total volume of 1 million MMBtus with a 100,000 MMBtu/d Maximum Daily Quantity for withdrawal and redelivery, while the other is for 1,250,000 MMBtus and 125,000 MMBtu/d respectively. The two requests were put out because at this point ENO is still considering how much volume it wants to contract, said spokesman Terry K. Shields. The gas will be used only by the LDC division and not for power generation, he said. The winning bidder(s) must be able to make firm deliveries via Gulf South or Riverway Gas Pipeline at various New Orleans-area citygate points as specified by ENO. The utility reserves the right to adjust the storage capacity and/or the MDQ withdrawal rate by plus or minus 10% on a biannual basis. The bid deadline is May 3. See the Gulf South bulletin board or call Shields at (281) 297-3593 for more information. Proposals must be sent electronically to Shields at tshield@entergy.com.

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