Tenaska Inc. and Kiowa Power Partners LLC announced that construction will begin in early July on the Kiamichi Energy Facility, a 1,250 MW natural gas-fired, electric generating facility in Pittsburg County, OK, south of Kiowa. Omaha-based Tenaska will act as lead developer, taking responsibility for the project’s final-stage development, financing and construction. The facility will be located on a 100-acre site approximately three miles south of Kiowa, just west of U.S. Highway 69. When operational in 2003, the power generated will be able to meet the energy needs of more than a million homes, the companies said. BVZ Power Partners-Kiowa has been tapped to build the project.

Florida Power & Light Co. announced the commercial startup of a 300 MW expansion of its Martin plant site near Indiantown, FL. The power from FPL’s Martin expansion — 900 MW of new generation from FPL’s Fort Myers plant — gives FPL a reserve margin of 20% this summer and the capability to serve an additional 255,000 homes and businesses. “There is no energy crisis in Florida,” said FPL President Paul Evanson. “FPL customers enjoy an adequate supply of electricity at reasonable rates, and the company is well-positioned to serve customers far into the future. This past week, in fact, we set a new record and comfortably met the highest-ever customer demand of 18,340 MW on Wednesday, June 13.” FPL said the new capacity additions are part of the company’s ongoing expansion, which will ultimately see 6,300 megawatts of new capacity — a 33% increase — put into service to meet customer needs between now and 2010. FPL also said construction is underway on an additional 1,450 MW of new generation in southwest and central Florida, which will be available to serve customers by 2003.

Columbia Gas Transmission said it is putting another 180 miles of gathering and small transmission lines and 152 related measuring stations up for sale. The facilities, which the company said are not part of its core mainline transmission business, are located in West Virginia, Pennsylvania, Maryland and New York. Columbia has been selling packages of non-core, small diameter pipeline assets since 1996. Since that time it has sold or transferred 6,000 miles small pipelines. The facilities in this current sale include Line 138, the 8,000 system, the 8044 extension, and the Oakland, Letchworth and Shenango systems. Interested parties must make an appointment to view Columbia data room in Charleston, WV. For details call (304) 357-3122 or go to Columbia web site www.columbiagastrans.com/facilitysales . Written bids are due Aug. 17.

The Texas Public Utility Commission (PUC) affirmed that it has an abundant supply of electricity to meet this summer’s peak needs, but also warned that state electric customers should be prepared for higher electricity bills due to increases in natural gas fuel costs. With an expected peak demand of 67,000 MW, statewide capacity will be at least 83,000 MW, resulting in a 24% reserve margin. Although the state’s electricity supply is expected to be plentiful, the PUC said Texas customers may face higher electricity bills this summer than last summer because of higher natural gas costs. State law allows utilities to pass along higher fuel costs to customers as long as the utility makes no additional profit from the higher costs. Natural gas supplies more than 45% of the fuel to generate electricity in Texas. Utilities surveyed by the PUC indicate a statewide average increase of approximately 18% this summer over last for a typical household. Some customers can expect electric bills to increase as much as one-third this summer compared to last summer for the same amount of electricity.

PG&E National Energy Group completed a transaction for a new $550 million senior unsecured letter of credit and revolving credit facility. The facility, which closed on June 15, will be used primarily for letters of credit to support trading and for working capital requirements. J.P. Morgan Securities Inc. led the transaction as bookrunner and lead arranger. Societe Generale and Citibank participated as arrangers with Dresdner Kleinwort Wasserstein, ABN AMRO and Credit Lyonnais acting as co-arrangers. The all-in drawn pricing is 1.625% over LIBOR at the BBB level. “This transaction marks the conclusion of the National Energy Group’s effort to establish a credit identity that is independent of PG&E Corp. and signals the National Energy Group’s re-entry into the commercial bank market to support our trading and development efforts,” said John Cooper, the National Energy Group’s senior vice president of finance. Based in Bethesda, MD, PG&E National Energy Group — a subsidiary of PG&E Corp. — develops, owns and operates electric generating and gas pipeline facilities and provides energy trading, marketing and risk-management services.

In response to the recent decline in its common share price, Aquila, Inc. said there has been no material change in its business strategy or earnings outlook. The company noted that the FERC order on power price mitigation in the western states is not expected to adversely impact the company’s earnings or strategy. Aquila is an 80%-owned subsidiary of UtiliCorp United and had its initial public offering in April 2001.

Florida Power & Light announced the commercial startup of a 300 MW expansion of its Martin plant site near Indiantown, FL, and Lake Okeechobee in Martin County. The power from FPL’s new Martin plant-plus 900 MW of new generation from FPL’s Fort Myers plant-gives FPL a reserve margin of 20% this summer and the capability to serve an additional 255,000 homes and businesses. “There is no energy crisis in Florida,” said FPL President Paul Evanson. “FPL customers enjoy an adequate supply of electricity at reasonable rates, and the company is well-positioned to serve customers far into the future. This past week, in fact, we set a new record and comfortably met the highest-ever customer demand of 18,340 MW on June 13.” FPL’s new capacity additions are part of the company’s on-going expansion, which will ultimately see 6,300 MW of new capacity-a 33% increase-put into service to meet customer needs between now and 2010. FPL said construction is underway on an additional 1,450 MW of new generation in Southwest and Central Florida that will be available to serve customers by 2003.

House Majority Whip Tom DeLay (R-TX) said in a statement that he is battling to save Eastern Gulf Lease Sale 181 as part of the FY02 Interior Appropriations Act. “Our long-term energy security requires us to seek out new sources of oil and natural gas… Lease Sale 181 has the potential to play an important role in strengthening our energy security. It could hold trillions of cubic feet of natural gas and billions of barrels of oil… Recently, we’ve seen fluctuations in the price of natural gas because supplies have run short… Lease Sale 181 can make natural gas prices lower and more stable. Some Members oppose exploration in this area because they’re concerned about environmental risks. That’s a reasonable and understandable concern. But we don’t face an either/or proposition. Lease Sale 181 can be explored safely.”

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