Changes

The “steep” natural gas declines in the third quarter of 2001 are “unlikely” to be part of a trend, and so far have not been repeated in fourth quarter reports, according to Lehman Brothers latest exploration and production update. The analyst found that “early returns” from 45 of the largest producers “lead us to estimate that wellhead gas production fell 0.1-0.5%” compared to the third quarter. The analyst also expects a production decline this year to fall between 1.5-2.5%, and import growth and storage to “meet demand growth” in 2002.

Without giving any reasons, California regulators again last Wednesday postponed action on Southern California Gas Co.’s proposal to free up 14 Bcf of previous cushion gas at two of its underground storage fields and sell the supplies on the open market. It was originally proposed in the days of shorter supplies and higher wholesale prices. A vote Wednesday had been expected, according to one of the California Public Utilities Commissioners, Geoffrey Brown.

California energy regulators are set to make some long-contemplated gas and electricity changes this week, including unbundling Southern California Gas Co.’s intrastate pipeline and storage system so that shippers will have firm rights to capacity.

Cinergy Corp. announced several organizational changes, including a new president for its subsidiary, Cincinnati Gas & Electric, to be effective Oct. 1. Gregory C. Ficke, currently vice president and chief information officer of regulated businesses for Cinergy, will become president of Cincinnati Gas & Electric, succeeding Joe Hale, who remains vice president of corporate communications and president of the Cinergy Foundation. Larry E. Thomas and Douglas F. Esamann have been named vice chairman and president, respectively, of PSI Energy, Inc. William J. Grealis will become executive vice president, special projects. He was CEO of regulated businesses. James L. Turner will have full responsibility for the regulated businesses organization and will retain the title of president, regulated businesses. Cinergy/CG&E serves 800,000 electric and 500,000 gas customers in southwestern Ohio and northern Kentucky.

California’s sharply divided energy regulators last Thursday suspended direct access to retail electric customers in the state and okayed one other major rate change necessary to begin the process of selling $13 billion in state electricity revenue bonds. The actions were effective immediately and allow existing direct access customers to continue their current arrangements.

Anadarko Petroleum Corp. late last week announced several senior management changes that reflect the company’s growth and continued emphasis on its core business of exploration and production. The company appointed Bill Sullivan to executive vice president, exploration and production. He will assume responsibility for the company’s exploration, development and production operations worldwide, including the operating subsidiaries for Canada and Algeria, the company said. Rex Alman, currently vice president, domestic operations, was promoted to senior vice president, domestic operations. He will continue to oversee Anadarko’s U.S. operations and will assume responsibility for offshore Gulf of Mexico as well. Jim Emme, currently vice president, Canada, has been named vice president, exploration and will assume responsibility for the company’s worldwide exploration efforts. Current manager for onshore exploration, Bob Daniels was promoted to vice president, Canada. Anadarko said that Alman, Emme and Daniels will report to Sullivan, as will Tony Meyer, vice president of Algeria, and Mark Pease, vice president of technology and engineering. “We’re focusing our best people and talent on what we do best – finding and producing oil and natural gas – and preparing for our future growth,” said Anadarko CEO Robert J. Allison, Jr. Other appointments included: Bruce Stover to senior vice president, worldwide business development; Michael D. Cochran, Ph.D., to senior vice president, strategy and planning; and Richard J. Sharples to senior vice president, marketing and minerals. Sharples will maintain responsibility for marketing the company’s natural gas and crude oil operations.

Explaining that its results display a new seasonality as a result of its acquisition of Columbia Energy Group, NiSource Inc reported a second quarter net loss of $8 million or 4 cents per basic share, compared to net income of $23.4 million or 19 cents per basic share in the second quarter last year.

As the balance of power shifted in the Senate last week from Republicans to Democrats, members from both sides of the aisle offered up plenty of hints that the contentious issue of reining in California’s runaway wholesale energy prices will be in play over the next couple of weeks. Democrats said they may take action on legislation that would direct FERC to set cost-based rates to ensure just and reasonable wholesale energy prices in the state, while Sen. Frank Murkowski (R-AK), the outgoing Senate Energy and Natural Resources chairman, indicated flexibility on the subject, but not if such open-mindedness means sacrificing additional generation in California.

Saying it wants to avoid the uncoordinated development of market mitigation proposals, FERC last week rejected a proposal by Consolidated Edison Co. of New York (ConEd) to make revisions to the utility’s localized market power mitigation measures. Among other things, the Commission voiced concerns over the fact that ConEd’s proposal failed to use the New York Independent System Operator’s (NYISO) stakeholder process.