Billion

FERC yesterday readily approved the $4 billion merger of twowestern utilities-Sierra Pacific Power and Nevada Power. This was”relatively easy” compared to other deals that have come before theCommission, said Commissioner Vicky Bailey.

Huntsman Corp., a Texas-based chemical company with $5 billionin revenues, selected Reliant Energy to supply gas to 10manufacturing facilities for $250 million. For competitive reasons,Reliant did not disclose the length of the contract or how much gaswill be supplied. It did say the contract has already gone intoservice.

The Department of Energy (DOE) proposed a $10 million cut infunding for natural gas research and development (R&ampD) as partof a $17.8 billion budget for fiscal year 2000 that it forwarded toCongress last week.

Amerada Hess Corp. announced it will be chopping capitalexpenditures by $900 million next year from the $1.45 billion spentthis year. It also plans to reduce its exploration and productionwork force by 400 positions, a 20% reduction in the U.S. and theU.K., resulting in $18 million in annual savings after taxes.

Enron Capital & Trade Resources (ECT) agreed to acquireCogen Technologies’ interests in three power plants for $1.1billion and the assumption of about $350 million in non-recoursedebt. ECT will make the acquisition through a special purposeentity in which ECT will own a 50 percent interest. The entity willinvest up to $130 million in equity, with the balance of thepurchase price funded by non-recourse borrowings provided byfinancial institutions. The transaction is expected to close inearly 1999.

San Francisco-based PG&E Corp. leap-frogged the continent tocomplete the $1.59 billion acquisition of New England ElectricSystem’s generating business, including hydro and gas-fired plantswith 5,100 MW of capacity. The acquisition was made by PG&Esubsidiary U.S. Generating Co.

Shareholders of Canada’s Tarragon Oil and Gas Ltd. yesterdayapproved the indirect acquisition of their company by Marathon Oilfor an estimated $1.1 billion. Still, the final fate of the mergerwas up to the Ontario Court (General Division), which was expectedto issue a favorable decision either late Tuesday or today.

From its new corporate headquarters in San Diego, officials ofthe newly merged $6.2 billion Sempra Energy yesterday stronglypromoted their goal of expanding both utility and nonutilitybusinesses throughout the U.S. in the next 10 years as energyrestructuring spreads from state to state. It plans both highprofile marketing/branding and political campaigns to further itsgoal of being “one of the top five energy services companies inNorth America.”

Marathon Oil plans to return to Canada with its agreement toacquire Tarragon Oil and Gas Ltd. of Calgary for $1.1 billion,including $340 million of assumed debt. Marathon has not held oilor gas properties in Canada since divesting its Canadian holdingsin 1982.