Because of the size of the power industry, electric companieswill own the gas industry within the next decade, according to anofficial of Engage Energy. Of the 300 LDCs and about 110investor-owned utilities remaining in the country, roughly 100 willbe remaining at the end of the next decade, said David Pruner ofEngage Energy in Houston. The top-50 IOUs will control almost 80%of the entire energy market, he said at the DOE-NARUC natural gasconference in Pittsburgh yesterday.

“The two [industries] will start to blur,” to the point thatthey will be indistinguishable. We’re already seeing this withPacifiCorp’s acquisition of Tejas, PG&E’s purchase of Valero’sNatural Gas Business Unit and Texas Utilities acquisition ofEnserch.

The growing number of power marketers in the country alreadyexceeds the number of gas marketers, Pruner noted. That’s notlikely to change. Power marketing is the place to make substantialmargins and “usually results in hyper competition with irrationalbehavior.” There’s more volatility now in the power market than inany other market in the world, he noted.

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