Beating

Energy companies have taken a beating by credit rating agencies, and finally one, Questar Corp., is fighting back. The company, whose credit remains investment grade but was downgraded by Moody’s Tuesday to A2 for Questar Pipeline and Questar Gas and Baa3 for Questar Market Resources, has done nothing to warrant a downgrade, according to CEO Keith O. Rattie.

Independents took a beating in the fourth quarter of last year with 55 of the largest companies reporting earnings before special items totaling $1.1 billion, or $2.18/boe (sold), off more than 50% from $2.3 billion, or $4.79/boe, posted for the third quarter, and off 75% from $4.3 billion, or $9.51/boe, posted for the fourth quarter of 2000, according to a final analysis by Adamstown, MD-based Energy Performance Review.

Energy stocks took a pounding yesterday mainly in reaction tocontinuing uncertainty over the financial health of California’stwo largest utilities, Southern California Edison and Pacific Gasand Electric, which got a weak short-term prescription by stateregulators (see related story this issue).

Independence and MarketLink pipeline sponsors were forced to runthe gauntlet last week at a special FERC conference. The event drewbuses filed with t-shirted crowds of pipeline supporters and anopposing army of congressmen, state representatives, localpoliticians and landowner advocates, the likes of which hasn’t beenseen at the Commission since the Iroquois Pipeline project wasproposed in the early 1990s.

As T-shirted crowds of opponents and proponents lined the hallsof FERC yesterday, a small army of congressmen, staterepresentatives, local politicians and landowner representativesunloaded an arsenal on the $1.3 billion Independence/MarketLinkpipeline project, which would transport up to 1 Bcf/d of gas acrossOhio, Pennsylvania and New Jersey to New York City. It wasstrikingly clear that no pipeline project in history has been morestaunchly opposed.

The staff of the Oregon Public Utility Commission (OPUC) gaveNorthwest Natural Gas (NWNG) quite a beating this week in a generalrate case. The staff recommended a revenue reduction of $19.9million per year from the gas utility’s operations in Oregon. NWNGhad requested a revenue increase of $14.7 million per year.