According to a stipulation and agreement between the Maryland Office of the People’s Counsel and Baltimore Gas & Electric, BGE must change its gas purchasing practices and buy between 10% and 20% of its winter gas supply under fixed-price agreements. The settlement was filed with the Maryland Public Service Commission this week. The switch to fixed-price contracts was a revision to BGE’s market gas commodity price procedure, which establishes the commodity portion of retail gas prices. BGE sets commodity prices based on monthly reported gas prices in spot markets. Under the agreement, BGE will buy 10-20% of its winter supplies between April and September under fixed-price deals. Gas purchased under the fixed price agreements will not be subject to sharing mechanisms or prudence reviews. “The volatility of natural gas spot prices hurt residential customers in Maryland this past winter,” said Peoples Counsel Michael J. Travieso. “This settlement will bring some diversity to BGE’s supply portfolio and help moderate the effects of unstable spot prices on consumer bills. Customers will benefit from more predictable gas costs.” The settlement also reduces what consumers must pay for BGE to reserve future gas supplies from $1.625 per year to $300,000.

Southern Company and the Orlando Public Utilities Commission (OUC) have received preliminary approval to build a 633 MW gas-fired generation facility. The Florida Public Service Commission signed off on a certificate of need filed by Southern, OUC and two other partners — the Kissimmee Utility Authority and Florida Municipal Power Agency. The project now goes to the Florida Department of Environmental Protection, then to the Florida governor and cabinet for final approvals. The four partners had signed a contract earlier that will see Southern build the combined-cycle generation unit at OUC’s Curtis H. Stanton Energy Center. Construction could begin as soon as this fall, with operation by 2003. It is Southern’s first step in expanding outside its service area. The company has targeted what it calls the “Super Southeast” for expansion, which not only includes the areas it currently services — Alabama, Georgia, northwest Florida and southeastern Mississippi — but also a broader region covering eight to 10 states across the Southeast. “The South is the single fastest-growing retail and wholesale energy market in the nation,” said Paul Bowers, president of Southern Company Generation and Energy Marketing. “We intend to play a large part in serving that growth by providing energy that is affordable, reliable and cleaner than ever.”

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