In response to the rapid consolidation of the natural gas andelectricity industries, the head of a major pipeline associationsaid he plans to initiate talks soon with other WashingtonD.C.-based trade groups about possibly merging into oneorganization.

Jerald Halvorsen, president of the Interstate Natural GasAssociation of America (INGAA), said he will meet with DavidParker, president of the American Gas Association (AGA); ThomasKuhn, president of the Edison Electric Institute (EEI); and LynneH. Church, executive director of the Electric Power SupplyAssociation (EPSA), in the “next three or four weeks” to broach theidea of merging the energy associations. EEI representsinvestor-owned utilities, while the EPSA is a national trade groupfor competitive power suppliers.

The Nuclear Energy Institute (NEI), a trade group for nuclearpower generators, “could be part of the puzzle too,” he told NGI.But the trade groups representing natural gas producers won’t beincluded, according to Halvorsen. “It would be far toocomplicated.” Any merger effort “would focus on [the trade groupsrepresenting] generation, distribution and transmission” companiesin both the gas and electricity industries.

The member companies of the energy associations are putting”pressure on us” to move in this direction, Halvorsen noted. “Theway the companies are merging, energy associations will either goout business or consolidate.” He believes that merging theassociations is “very definitely” and “absolutely” in the cards;the big question is how this will be accomplished.

He sees three possibilities: merging all of these electric andgas associations under one roof; creating two associations — onefor regulated gas and electric companies and the other forunregulated companies; or creating three associations — one forenergy distribution, another for energy generation and a third forenergy transmission.”

Halvorsen indicated the industry would have to establish ablue-ribbon task force, comprised of representatives from varioussectors of the energy business, to investigate each of thealternatives. The association “dues payers are going to have todrive the process.” Due to the size of the task, he also believesit will be necessary to hire a management consultant, he said.

Halvorsen noted he hopes to have a status report on the mergereffort for INGAA’s board of directors by April. If AGA, EEI, EPSAand NEI go along with a merger, it would be at least two to threeyears before it would occur, he said.

INGAA is feeling the pinch of the mergers of major pipelinecompanies. Earlier this month, it had to cut three executives fromits staff in response to the loss of members and dues. Halvorsensaid the number of INGAA’s pipeline members has been halved in thepast five years, dropping to 16 from 32. This represents astaggering financial loss for INGAA, considering that dues forindividual pipeline members are capped at $475,000.

He conceded any merger of the associations could put him andother heads of energy trade groups out of jobs, but “we’re all bigboys, we can take it.”

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