California regulators took another step toward unbundling thenatural gas business in the state last week, issuing proposedguidelines and saying it will remove limits on the state’sseven-year core aggregation program, meaning any size core customereventually will be able to choose a new supplier.
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In a move FERC said will “create a more integrated and efficientinterstate pipeline grid,” the Commission adopted standards thisweek that will expand from one to three the number of intra-daynomination opportunities for shippers on all interstate pipelines.The intra-day nomination schedule was proposed by the Gas IndustryStandard’s Board in March, by FERC in a notice of proposedrulemaking in April and this week was made part of the Commission’sregulations with required pipeline implementation by Nov. 2.
Nicor Inc., whose principal business includes Nicor Gas, andDynegy Inc., formerly NGC Corp., yesterday announced they haveformed a strategic alliance to jointly pursue wholesale generationand cogeneration power plants in six states in the Midwest.
Traders who hadn’t finished already wound up their July bidweekbusiness Tuesday and started looking for clues on aftermarketdirection. What they found in swing deals done for today only was amixed bag of flat to up or down slightly from bidweek levels. Butmany sources are expecting an overall strong aftermarket. There maybe some initial softness since the July Fourth holiday weekend isconsidered the lowest demand period of the year. But sources lookfor fundamental cooling load to support gas prices after that.
Denver-based KN Energy (KNE) made a big entrance into thegas-fired power generation business yesterday by purchasing 10% ofthe generation in the state of Colorado and becoming the largestindependent power producer in the state. It purchased Denver-basedThermo Co., an electrical engineering firm that specializes indistributed power. The deal is designed to prepare KNE for eventualelectric industry deregulation and competition in its home state.
A white paper released by Prosper Business Development Corp.outlines three phases of revolution occurring in the energyindustry and explains three mistakes marketers must avoid to ensuresuccess in the competitive marketplace. The paper addressesdifferences from telecommunications deregulation and warns of ashakeout for energy marketing executives who fail to respond to thederegulating market.
Union Pacific Resource has reiterated its intention to examine apossible sale of its gas gathering and processing business orselected non-core assets as part of a “deleveraging” programfollowing its recent $3.5 billion purchase (including assumption ofdebt) of Norcen Energy. At the time of the Norcen deal, UPR said itintended to sell $500-$700 million in assets to cut its debt toequity ratio, which ballooned to 73% following the Norcen deal fromabout 40%. But the company has valued its midstream assets, whichare located in Texas, Louisiana, Wyoming and Colorado, at about $2billion. The assets produced about $150 million in pretax operatingincome in 1997. The company has 25 operating plants and relatedpipeline facilities. A UPR spokesman said the company is justbeginning to evaluate its options but noted the market formidstream assets has been hot. UPR’s announcement follows similarplans announced recently by Aquila Gas Pipeline and EquitableResources. “These assets have been selling at a much higher cashflow multiple than E&P assets.”
Westcoast Energy announced it has agreed to sell its Albertanatural gas distribution business, Centra Gas Alberta, based inLeduc, BC, to AltaGas Services of Calgary for $61 million. Thecompany distributes gas to 53,000 residential, rural and smallindustrial customers in 90 communities in central Alberta.