PPL Global, a subsidiary of Pennsylvania based PPL Corp.announced plans to build a 600 MW natural gas-fired generationplant on Long Island, NY. The proposed $300 million facility willbe located on a 15 acre site in Smithtown, which is currently beingused as a sand and gravel operation. PPL Global is planning tobuild up to 12 gas-fired units for this project. “With thecontinued growth of Long Island, there is an acknowledged need foradditional competitive electricity sources. These proposed unitswill provide significant additional electricity to these residentsin a way that is environmentally and aesthetically sensitive forarea residents and cost effective for PPL Global,” said PaulChampagne, PPL Global president. The facility site is positionednear the Iroquois pipeline, as well as other major transmissionlines. Pending approvals from state and local agencies,ground-breaking is expected to begin in 2001, with an approximateoperational date of June, 2002.

The Pennsylvania Public Utility Commission (PUC) approved theproposed merger between PECO Energy of Philadelphia and Unicom ofChicago by a 5-0 vote. Peco Chairman Corbin A McNeill and UnicomChairman John W. Rowe will become co-CEOs of the newly formed ExelonCorp. The terms of the merger as agreed upon by the PUC provides forcomprehensive customer benefits including $200 million in ratereductions from 2002 through 2005. Additionally, Peco committed tokeep the company headquarters in Philadelphia until 2008, retain aminimum of 1,100 employees there, and maintain charitablecontributions and community service at least at current levels. Themerger has been approved by the Department of Justice, the IllinoisCommerce Commission, the Federal Energy Regulatory Commission (seeDaily GPI, April 13). Shareholders, theNuclear Regulatory Commission, and the Securities and ExchangeCommission still must approved the deal. Completion remains on targetfor September, the companies say.

Ultra Petroleum said yesterday that proved reserves haveincreased by 67%, or 50 Bcfe, to 125 Bcfe up from 75 Bcfe in 1999as a result of the downspacing order approved by the State ofWyoming and the Bureau of Land Management in the Jonah Field. SinceJune 1999, Ultra’s proved reserves have almost tripled, increasing184% from 44 Bcfe to 125 Bcfe. Additionally, the company has 125Bcfe of low-risk probable reserves resulting in total proved plusprobable reserves of 250 Bcfe as of this month. “This decisionallowing increased density of Jonah Field wells enables Ultra toproceed with the drilling of 22 in-fill locations at a time of veryattractive natural gas prices,” said Michael D. Watford, CEO.

Daugherty Resources said it has made a discovery of asignificant new oil and gas field in the Appalachian Basin, in theFonde Oil and Gas Field in Bell County, KY where the company hasdrilled six successful wells in its 5,000-acre lease block. Wright& Co., an independent engineering firm with offices in Houstonand Nashville,estimated that the six wells and 11 provenundeveloped locations have reserves of 4.9 BCFE. Daugherty owns onethird of the drilled wells and expects to maintain similarinterests in subsequent wells. The natural resources developmentcompany also announced yesterday that it has completed theacquisition of a 12,300 acre oil and gas lease adjacent to the newdiscovery from the J. M. Huber Corp.

Allegheny Power, the Ohio utility subsidiary of Allegheny EnergyInc., of Hagerstown, MD, reached a stipulated agreement with majorparties on a transition plan to bring electric choice to its 28,000Ohio customers. The settlement benefits shareholders by allowingthe company to recover regulatory asset costs through a transitioncharge and authorizing the transfer of 325 MW of generatingcapacity to an unregulated affiliate at book value. AlleghenyEnergy expects to have more than 6,000 MW of low-cost generatingcapacity in the deregulated marketplace by Jan. 1, 2001. Customerswill benefit from a combination of rate reductions and rate freezesduring the transition to competition, called the “marketdevelopment period,” and will be able for the first time to shopfor the company that supplies their electricity beginning nextyear, when the generation portion of the electric industry isopened to competition. The Public Utilities Commission of Ohio isexpected to approve it during the third quarter.

Ivanhoe Energy Inc. acquired rights to participate in thedevelopment of a 7,300-acre oil and gas project in the Spraberrytrend of the West Texas Permian Basin.Drilling of the first wellbegan June 13, and the development plan provides for the use of tworigs to drill up to 15 wells on the Spraberry project this year.The Canadian oil and natural gas exploration and developmentcompany has obtained a working interest of 62.5% in the projectthrough an operating agreement with Discovery Operating Inc., aTexas-based, independent oil and gas company, and Ivanhoe’sinterest will revert to 50% after payback of development costs. TheSpraberry project acreage could eventually accommodate as many as90 new wells. Based on production data from existing wells in thearea, and current oil and gas prices and costs, Ivanhoe estimatesthat the payback period for each new well drilled would beapproximately 18 months.

Chevron cleared a regulatory hurdle in its proposed acquisitionof a portion of Pacific Gas & Electric Corp.’s retail energyservices business, the Federal Trade Commission said yesterday.Earlier this month, Chevron announced that it had agreed to acquireassets from PG&E’s Energy Services unit, including energymanagement, energy efficiency, billing and information services formajor commercial, industrial and institutional customers, as wellas related infrastructure. Terms of the deal, which is expected toclose in mid-July, were not disclosed. The FTC said it granted theacquisition early termination approval of the required waitingperiod under the Hart-Scott-Rodino Antitrust Act on June 20.

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