Announcement

Following on the heels of an announcement by Pennsylvania’s attorney general that PPL EnergyPlus didn’t violate antitrust laws in PJM Interconnection’s market, PPL last Thursday received a letter from the U.S. Department of Justice (DOJ) in which the agency said that it had “favorably concluded” its investigation of the company.

Following Moody’s Investors Service’s announcement that it was placing the credit ratings of NiSource Inc. and its subsidiaries under review for possible downgrade, NiSource CEO Gary L. Neale fired back with a release expressing his disappointment at the action.

Following an onslaught of bad news including the announcement of a fourth quarter net loss, American Electric Power Co. (AEP) shares fell more than 5% Friday $25.65. The company reported a fourth quarter net loss of $837 million, or $2.47 a share, compared to net income of $52 million, or 16 cents a share a year earlier.

After dipping to new two-week lows following the announcement that 95 Bcf was pulled from storage inventories the week prior, natural gas futures turned higher late Friday morning and managed to claw back above unchanged on the day. With that the January 2003 contract expired at $4.988, up 2.6 cents for the day and about 70 cents above where it began its tenure as Nymex prompt contract back in late November.

Coming off of a tough week because of an announcement of lower earnings guidance, Bedminster, NJ-based NUI Corp. Thursday reaffirmed the positive performance of its energy trading and portfolio management business and declared its regular quarterly dividend on Thursday. The company said that while trading will be limited going forward because of its strict credit requirements on counterparties and declining liquidity in certain markets, the trading division is still expected to post relatively strong earnings.

Coming off of a tough week because of an announcement of lower earnings guidance, Bedminster, NJ-based NUI Corp. Thursday reaffirmed the positive performance of its energy trading and portfolio management business and declared its regular quarterly dividend on Thursday. The company said that while trading will be limited going forward because of its strict credit requirements on counterparties and declining liquidity in certain markets, the trading division is still expected to post relatively strong earnings.

Following on its announcement that it will report a loss for the quarter ending June 30, primarily due to a decline in energy trading, New Jersey-based NUI Corp. said Tuesday it will take immediate steps to cease operations of its TIC Enterprises LLC venture’s unprofitable divisions, including TIC’s telecom equipment and shipping divisions.

Following on its announcement that it will report a loss for the quarter ending June 30, primarily due to a decline in energy trading, New Jersey-based NUI Corp. said Tuesday it will take immediate steps to cease operations of its TIC Enterprises LLC venture’s unprofitable divisions, including TIC’s telecom equipment and shipping divisions.

In response to Oneok’s Wednesday announcement that it had entered an agreement to acquire Southern Union Co.’s Texas gas distribution business, Standard & Poor’s Rating Services said Thursday that its ratings and outlook for Oneok (A/Stable/A-1) will not be affected. In making the purchase of the business that supplies approximately 535,000 customers in Texas with natural gas, Oneok CEO David Kyle said the company started as a gas distributor and the business continues to be an important segment of Oneok’s strategy (see Daily GPI, Oct. 17). S&P commented that management has begun to strengthen Oneok’s financial profile, and the acquisition will be financed in accordance with that plan. “The regulated gas distribution business’ relatively low-cost, steady earnings will boost that segment’s share of operating income to 35% to 40% of operating income derived from natural gas production, transport and storage, gathering and processing, and distribution,” S&P said. The ratings agency noted that these businesses have accounted for about 70 to 80% of consolidated operating income with marketing and trading accounting for the remaining portion. However, S&P pointed out that marketing and trading’s contribution fluctuates with commodity price volatility. For example, S&P said marketing and trading accounted for 53% of consolidated operating income in the first half of 2002 compared with 29% in first-half 2001. Enbridge Energy Partners LP closed its acquisition of the Midcoast, Northeast Texas and South Texas systems from Enbridge Inc. The purchase price of $820 million is subject to adjustments for working capital and other items. The Midcoast system includes 4,000 miles of natural gas gathering and transmission pipelines, with an aggregate throughput capacity of 4 Bcf/d, and natural gas treating and processing assets located in the Midcontinent and Gulf Coast regions. Included in the Midcoast system are four interstate pipeline systems, 35 intrastate and wholesale customer gas pipeline systems, 35 gathering and processing/treating systems, 98 gas liquids, crude oil and carbon dioxide trucks and trailers and 48 rail cars. The Northeast Texas system includes 1,200 miles of gas gathering lines with a throughput capacity of 400 MMcf/d, along with five treating plants and four processing plants. The South Texas system consists of 175 miles of gas gathering lines with a capacity of 100 MMcf/d and one treating plant. The South Texas gathering system interconnects with 500 miles of gas transmission lines, which the partnership has the right to acquire, subject to among other things, payment by the partnership of the $41 million purchase price and regulatory approvals. Concurrently with the closing, the partnership sold nine million limited partner interests to Enbridge Energy Management LLC for $333 million ($39/share). The partnership intends to use the proceeds from the sale to pay off debt assumed in connection with the acquisitions.