Chicago

After all of the ups and downs in the U.S.’s natural gas markets over the past year, industry experts at the 13th Annual LDC Forum in Chicago last week said they still foresee a 30 Tcf market in the future, but they differ on the expected timeframe. The speakers agreed that the nation’s current infrastructure would need to be beefed up to shoulder the load.

After all of the ups and downs in the U.S.’s natural gas markets over the past year, industry experts at the 13th Annual LDC Forum in Chicago Monday said they still foresee a 30 Tcf market in the future, but they differ on the expected timeframe. The speakers agreed that the nation’s current infrastructure would need to be beefed up to shoulder the load.

Chicago powerhouse Exelon announced new earnings targets for itsthree principal businesses yesterday, setting targets to grow at arate of about 10% a year through 2003. The company projectedearnings per share of $4.50 for 2001; $4.95 in 2002; and $5.40 in2003. Previous earnings per share had been $4.20 for 2001; $4.60 in2002; and $5.10 in 2003. Reduced amortization, partially offset byhigher spending for operations in its energy delivery business, isthe principal driver for the earnings increase said Exelonofficials. Exelon was formed in September 1999 in the merger ofPECO Energy Co. and Unicom Corp., and is one of the largestelectric utilities and the largest nuclear operator in the UnitedStates.

Elwood Energy LLC, located about 60 miles southwest of Chicago,has signed a multi-year power plant sales agreement with AquilaEnergy for the output of Elwood’s phase II expansion of itsgas-fired peaking facility. When the Elwood, IL facility becomesoperational next summer, it will double the capacity of itsexisting 600 MW merchant facility, bringing the total capacity to1,350 MW.

The simmering pot of market concerns regarding the market powerof EnronOnline finally boiled over in public yesterday at Chicago’sLDC Forum. A representative from EnronOnline had to fend off verbalattacks from competitors and from the audience, who criticized thesystem as giving Enron the ability to manipulate prices and provideit with an unfair advantage over competitors.

Northern Border Partners have entered into a letter of understanding with Enron North America (ENA) to purchase gas gathering facilities in the Powder River and Wind River Basins in Wyoming for almost $200 million. Included in the acquisition is Enron Midstream Services, which has ownership interests in Bighorn Gas Gathering, and ENA subsidiaries that hold interests in Fort Union Gas Gathering and Lost Creek Gathering. Upon completion of the transaction, Northern Border Partners will own and operate the assets, and will provide gathering and transportation services. ENA will still supply gas purchase and sales, finance, and risk management along with producer outsourcing services.

As expected, shareholders of Chicago’s Unicom Corp., the parentcompany of Commonwealth Edison, voted yesterday to approve themerger of their company with PECO Energy, based in Philadelphia.Nearly 95% of the shareholders cast votes in favor of the merger.The vote followed one by PECO shareholders Tuesday, who approvedthe merger with nearly 97% in favor. When finalized, themega-merger will form a new holding company, Exelon Corp.

The industry almost assuredly will see $4/Mcf gas later thisyear, and on a cold day in Chicago next winter it may even see gasprices “momentarily spike” to as much as $30 or $40 due to anever-tightening supply situation, says a University of Houstonprofessor.

Chicago-based GRI and GE Zenith Controls have signed a researchcontract to develop an Advanced Grid Interconnected SwitchgearSystem for the distributed generation (DG) market. The new product— expected in the marketplace by late 2001 — will build onexisting GE Zenith technology to allow for low-cost, rapidinterconnection (plug-and-play) of distributed systems within theelectric grid. DG is the integrated or stand-alone use of small,modular electric generation close to the point of consumption. Itis installed for the benefit of the specific customer, the electricsystem or both. Three independent trends — utility industryrestructuring, increasing system capacity needs, and technologyadvancements — are concurrently laying the groundwork for thepossible widespread introduction of DG. “We expect the jointproduct development effort will offer the advantage of a quantumleap in technology that will kick-start the proliferation of DG,”said David Leslie, GE Zenith Controls paralleling switchgearproduct manager. “This product will significantly lower the initialcost of interconnection equipment, and will be simple to install,commission, operate and maintain — providing a major boost todistributed generation markets.