Battle

PG&ampE Gas Transmission Texas (PG&ampE GT-T), a subsidiary of PG&ampE Corp., and Southern Union Gas Co. said last week they will continue to fight a judgement awarding franchise fees from marketer sales to the City of Edinburg, TX (Pop. 29,885). They said they will appeal a judgment handed down in the 92nd district court in Hidalgo County, TX, even though the judge reduced the award under an August 1998 jury verdict.

A new battle in utility deregulation gained momentum last weekwhen the Electric Power Supply Association (EPSA) published aletter urging the Florida Public Service Commission (FPSC) toreject Florida Power Corp.’s petition to forgo competitive biddingfor construction of Hines 2, a second gas-fired generation plant atits Hines Energy Complex in Polk County, FL.

The latest battle in utility deregulation was waged last weekwhen the Electric Power Supply Association (EPSA) published aletter urging Florida’s Public Service Commission (FPSC) to rejectFlorida Power Corp.’s petition to forgo competitive bidding forconstruction of Hines 2, a second gas-fired generation plant at itsHines Energy Complex in Polk County, FL.

Environmental activist Anne Marie Mueser, taking her battleagainst Sonat’s northern Alabama extension one step further, hasaccused Commissioner Curt Hebert Jr. of potentially compromisinghis impartiality in the case by corresponding with the pipeline andother supporters of the project. She suggested that Hebert, whovoted for an amended certificate for the Sonat project last week,should have considered recusing himself from the case [see relatedstory].

The Federal Energy Regulatory Commission issued an order lateFriday authorizing the California ISO on an interim basis to”reject bids in excess of whatever price levels it believes areappropriate for Regulation, Spinning Reserve, Non-Spinning Reserveand Replacement Reserve. The price levels could be based on costs,market or any factor the ISO determines will attract sufficientbids into the markets.”

Marketers lost a battle against LDCs last month when theMichigan Public Service Commission (MPSC) sided with MichiganConsolidated Gas (MichCon) and Consumers Energy in a dispute overfees charged for tracking title to gas that changes hands on theLDCs’ systems. The MPSC found it had no jurisdiction to regulatetitle transfer tracking fees.

In the battle between marketers and LDCs to restructure the gasindustry, commercial customers are being overlooked, according toKathleen Magruder, vice president of rates and tariffs for EnronEnergy Services (EES). “I had a regulator. say to me, ‘Well, ‘I’venever heard a commercial customer say they really want somechoice.’ So the next meeting I brought in 15 commercial customers.He was real unhappy.

Oklahoma gas producers are close to declaring victory in abattle with the state’s pipeline companies. New legislationexpected to be signed by the governor within two weeks would givestate regulators greater authority to settle gathering disputes,ensure producers are provided open access to gas transportation,and to ensure the rates, terms and conditions of gatheringcontracts are just, reasonable and nondiscriminatory.

The Minerals Management Service (MMS) report’s conclusion that amandatory royalty in-kind (RIK) program for royalty collectionwould cost the federal government up to $374 million annually inlost revenues was “deeply flawed,” according to an industry-backedstudy of the agency’s analysis.