2000

The Bank of New York, Prebon Yamane and Amerex announced a newconcept for the energy industry that they believe willsignificantly boost market liquidity and efficiency. They haveformed a new joint venture called EnergyClear, which will createthe first industry-sponsored clearinghouse to offer comparison,netting and settlement of wholesale energy contracts for theover-the-counter (OTC) marketplace.

As the week of the worst natural gas pipeline disaster in the U.S. drew to a close, with the last of the 12 victims dying on Friday, there was no clear indication when service would resume on any of the three lines making up the El Paso Natural Gas’ South Mainline that feeds 1 Bcf/d into the California market.

In a move usually reserved for the late stages of acquisitions — and unheard of less than a month after an initial agreement — Dynegy Corp. is in advanced discussions with Enron Corp. to renegotiate its merger offer of Nov. 9 to acquire the Houston-based rival. According to sources, Dynegy wants to reduce the all-stock transaction price by more than 40%, which would put its share price at about $6. Enron closed at $4.11 on Tuesday, 10 cents above its Monday close.

As mergers and acquisitions attempt to live up to the pace set during 2000, Denver-based MarkWest Hydrocarbon Inc. reported it has more than doubled natural gas reserves with the $51 million acquisitions of Leland Energy Canada Ltd. and Watford Energy Ltd. — two privately owned exploration and production companies based in Calgary. The companies’ current management, which directs both Leland’s and Watford’s operations, will remain intact, MarkWest said.

Maintaining transmission adequacy at year 2000 levels would require a quadrupling of transmission investments during this decade, but the price tag for building these new facilities — including the cost of replacing retired capacity — is about $56 billion, according to a recent study commissioned by the Edison Electric Institute (EEI). This transmission investment cost is roughly half of the investment likely to be made in new generating units during the same time.

Maintaining transmission adequacy at year 2000 levels would require a quadrupling of transmission investments during this decade, but the price tag for building these new facilities — including the cost of replacing retired capacity — is about $56 billion, according to a recent study done for the Edison Electric Institute (EEI). This transmission investment cost is roughly half of the investment likely to be made in new generating units during the same time.

The “unprecedented” high natural gas prices in the three-month period from November 2000 to January 2001 impacted not only natural gas liquids prices, but impacted how liquids were valued, according to a report by the Calgary-based National Energy Board. NEB said that as a result, NGL prices are “expected to continue to be influenced by both oil and gas prices.”

This summer, look for the weather to be slightly warmer than the 30-year average but slightly cooler than last summer with fewer “named” storms in the Atlantic Ocean. So says Sempra Energy Trading meteorologist Dan Guertin, who offered up his forecast at the North American Gas Strategies Conference in Houston yesterday.

PG&E Corp. said Friday in a Securities and ExchangeCommission filing that it will take a charge of $6.9 billionagainst 2000 financial results, unless there is a regulatory orlegislative solution to its multi-billion-dollar credit crunch. Thered ink is caused by the past-due bills for wholesale power andunpaid debt and interest tied to the fact that the company’sutility, Pacific Gas and Electric Co., for nine months has beenpaying significantly more for electricity than it is permitted tocharge in retail rates, which have been frozen at 1996 levels. Evenlast week’s 3-cent/Kwh rate increase decision by state regulatorsleft retail rates frozen, imposing the increase as a surcharge.