Balance

With the implementation of the Energy Policy Act of 2005 (EPAct), a “fundamental shift” in the balance of power between FERC and the energy industry occurred, giving the Commission significant civil penalty authority and expanding its jurisdiction over energy companies that had not historically been subject to its reach, according to a review by a top energy law firm.

With the implementation of the Energy Policy Act of 2005 (EPAct), a “fundamental shift” in the balance of power between FERC and the energy industry occurred, giving the Commission significant civil penalty authority and expanding its jurisdiction over energy companies that had not historically been subject to its jurisdiction, according to a review by a top energy law firm.

As part of its plan to reduce debt and strengthen its balance sheet, CMS Enterprises announced Wednesday that it has completed the previously announced sale of a portfolio of its businesses in Argentina and its northern Michigan nonutility natural gas assets for about $130 million (see Daily GPI, Feb. 5). The principal subsidiary of CMS Energy sold its interests in those businesses to Michigan-based Lucid Energy. The Argentina businesses sold by CMS Enterprises were the CT Mendoza and Ensenada generating plants and the TGM natural gas pipeline business. The sale of Argentine businesses originally was to include the CMS Enterprises interest in Hidroelectrica El Chocon SA. However, the CMS Enterprises 17.2% interest in El Chocon was sold last week to Endesa under a separate arrangement after Endesa exercised a right of first offer for $50 million. The total proceeds from the two transactions — the sale to Lucid Energy announced today and the sale of the El Chocon interest announced Friday — are $180 million. In Michigan, the sale to Lucid Energy includes CMS Enterprises’ natural gas pipelines and processing assets, the Antrim natural gas processing plant, 155 miles of associated gathering lines and interests in three special purpose gas transmission pipelines that total 110 miles. As a result of the sales to Endesa and Lucid Energy, CMS Energy expects to recognize an after-tax, noncash loss of approximately $160 million in the first quarter of 2007. CMS Enterprises said it will maintain its interest in the TGN natural gas business in Argentina, which remains subject to a potential sale to the government of Argentina or some other disposition. Regarding CMS Enterprises’ commitment to sell its 23.5% interest in TGN, CMS Energy said it expects to record an after-tax impairment charge of approximately $140 million in the first quarter of 2007 to reflect the fair value of its TGN ownership interest.

Despite new bouts of colder weather approaching in some areas and pipelines reintroducing OFO-like actions or pleading for shippers to stay in balance, prices softened Monday at a large majority of points. Strong increases at New England citygates (handily topped by Iroquois Zone 2’s $2.75 gain) and smaller ones at a couple of other scattered points ran against the grain of overall declines ranging from about a nickel to 40 cents.

There should be a comfortable natural gas supply and demand balance through 2011 in the Pacific Northwest, according to the latest consensus regional outlook published by the Northwest Gas Association, a trade organization of nine major interstate pipelines and distribution utilities in Idaho, Oregon, Washington and British Columbia.

There should be a comfortable natural gas supply and demand balance through 2011 in the Pacific Northwest, according to the latest consensus regional outlook published by the Northwest Gas Association, a trade organization of nine major interstate pipelines and distribution utilities in Idaho, Oregon, Washington and British Columbia.

High commodity prices, strong balance sheets and a lack of large-scale organic growth opportunities led to several huge consolidation deals within the U.S. energy sector in the past year, but comparatively fewer transactions were announced by its neighbor to the north. That could be about to change, UBS energy analysts said last week.

High commodity prices, strong balance sheets and a lack of large-scale organic growth opportunities led to several huge consolidation deals within the U.S. energy sector in the past year, but its neighbor to the north has been relatively quiet. That could be about to change, UBS energy analysts said in a new report.

The natural gas market “is severely out of balance,” and participants can expect to see prices during injection season near “the top end of a $5.00-8.00/MMBtu range,” according to Lehman Brothers equity research.