AES Corp. disclosed in a regulatory filing made with the Securities and Exchange Commission that the Department of Justice (DOJ) last month commenced an antitrust investigation related to an agreement between AES Southland LLC and Williams Energy Services Co. The DOJ alleges that the agreement limits the expansion of electric generating capacity at or near certain plants owned by AES Southland. In connection with the investigation, the DOJ sent a civil investigative demand to AES Southland requesting the answer to certain interrogatories and the production of documents. AES Southland is cooperating with the terms of the civil investigative demand, AES noted. The Federal Energy Regulatory Commission in March of this year ordered Williams Energy Marketing & Trading and AES Southland to justify why they should not be found to have violated the Federal Power Act (FPA) by engaging in actions to drive up power prices in the California bulk market and potentially compromising the reliability of the transmission network (see Daily GPI, March 15). In California, Williams markets power produced from two generating units owned by AES. FERC said its investigation showed that Williams and AES appeared to have financial incentive to prolong outages from the two generating units to drive up prices.

Conectiv said that it has sold its telecommunications business, Conectiv Communications, to Cavalier Telephone and, separately, disclosed that it has also entered into an agreement with the Pedricktown Cogeneration Limited Partnership to redeem Conectiv’s 50% stake in a 118 MW cogeneration facility in Pedricktown, NJ. Company officials said these two transactions, taken together with the previously announced sales of its Delmarva baseload, coal-fired power plants to NRG Energy, will provide financial resources needed to execute Conectiv’s mid-merit energy strategy. The plant sales are expected to result in a one-time gain of $170 million to $175 million, offset by a one-time net loss of $55 million to $80 million in 2001 as a result of the Conectiv Communications and Pedricktown transactions. The plant sales still require regulatory approval, Conectiv said.

PSEG Power New York said that the transmission plan for its proposed 750 MW Bethlehem Energy Center has been approved by the New York Independent System Operator. The $400 million natural gas-fired, combined cycle project would replace the existing 400 MW Albany Steam Station, which is located about three miles south of Albany in Bethlehem (Glenmont), NY. The existing station was acquired by PSEG Power New York last May from Niagara Mohawk Power Corp. It will be retired when the new Bethlehem Energy Center begins commercial operation. PSEG Power New York is a subsidiary of PSEG Power.

Niagara Mohawk Holdings Inc. has been notified that Arpine Investments Inc. has commenced an unsolicited, so-called “mini-tender offer” for the outstanding common shares of Niagara Mohawk Holdings at a per share price of $13.75. An mini-tender offer is an offer for less than 5% of a company’s securities. Shares of Niagara Mohawk Holdings’ common stock, which are traded on the New York Stock Exchange, closed at a per share price of $17.46 on June 5, 2001. Arpine Investment’s tender offer price of $13.75 is 21% below the June 5, 2001, closing price. Since the beginning of the year, Niagara Mohawk’s common stock has not traded below $16.62 per share. Niagara Mohawk is strongly recommending that its shareholders reject the tender offer.

TXU Electric scored a victory after the Texas Supreme Court issued a favorable ruling on a securitization appeal made by the TXU subsidiary. TXU believes the ruling should allow the company to securitize $1.3 billion or more of its regulatory assets. The court remanded the case to the Texas Public Utility Commission for determination of the final figures. When the case was originally filed, the PUC was under an obligation to act within 90 days of filing. Following receipt of a new finacing order from the state commission, TXU will begin the four-to-six week process of issuing the securitization bonds to investors. Proceeds from the bonds will be used to reduce debt and equity at TXU Electric.

Planalytics Inc. said its Weathernomics Gas Buyer financial risk management tool for purchasing and hedging natural gas beat the average month-end gas futures settlement price by $0.59 per MMBtu over the last twelve months. For the July 2000 through June 2001 natural gas contracts, the average month-end settlement price was $5.45 per MMBtu. Over the same period, clients basing their purchases on Weathernomics Gas Buyer daily outputs would have paid $4.86 per MMBtu, which is a savings of 11%, the company said. The month-end settlement price is computed as the average of the closing price on the last three days of each month. “The natural gas market is more volatile than ever and this is exactly the environment in which Weathernomics Gas Buyer thrives. Over the last twelve months, the market has gone through periods of both sharply rising prices and dramatic declines and the tool continues to perform impressively,” said Paul Corby, senior vice president at Planalytics Energy. “Weathernomics Gas Buyer clients have been able to successfully navigate their way through the price fluctuations and take advantage of the opportunities presented by these market conditions.” Weathernomics does not attempt to forecast gas prices. Rather, it forecasts the turning points and future direction of prices to determine if gas is overvalued or undervalued at any given time. It combines long-range weather intelligence, American Gas Association weekly storage data, inventory change forecasts, real-time NYMEX futures contract pricing, and proprietary Weathernomics technology into an engine that provides six possible buy-sell outputs. Planalytics is hosting a live web cast on the system at 3:30 p.m. (EDT) on June 19. To register for the event go to www.planalytics.com/energy.

Tenaska Power Services and Omaha Public Power District (OPPD) signed an agreement to perform power marketing services for the Indiana Municipal Power Agency (IMPA). Under the terms of the deal, Tenaska and OPPD will market excess electric generating capacity, purchase supplemental supplies required by IMPA and provide other related marketing services. This is the fifth agreement signed since Tenaska and OPPD formed a unique industry alliance last year to capitalize on Tenaska’s market expertise and OPPD’s in-depth knowledge of the public power industry. Previously, the two companies executed similar arrangements with Missouri River Energy Services, Wisconsin Public Power, Inc., Muscatine Power and Water, and Oklahoma Municipal Power Authority. IMPA is an agency of the State of Indiana that provides energy to 32 member municipalities. IMPA has a peak load of 1,000 MW and resources in excess of 1,200 MW. Omaha-based Tenaska has 6,100 MW of generating capacity in operation or construction with 6,000 MW in pre-financing development. The OPPD is one of the largest publicly owned electric utilities in the United States, serving more than 280,000 customers in southeast Nebraska counties. OPPD owns and operates more than 2,200 MW of generating capacity.

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