Consent

Mitchell Energy & Development Corp. completed its previouslyannounced work force reduction and set its capital budget. As aresult of the company-wide downsizing and restructuring effort, 235positions have been eliminated, a 21% reduction in totalemployment. With these changes, the company expects annual salaryand benefits costs savings of about $17 million.

Implementation of a mandated capacity auction, as proposed byFERC in its mega-notice of proposed rulemaking (NOPR), couldsignificantly thwart the opportunity for natural gas to gain agreater share of the prized electricity market in the future.

Reliant Energy improved its West Coast portfolio last week byannouncing a six-year agreement with the Springfield, IL municipalutility City Water, Light and Power (CWLP) to market its total 600MW generation. Financial terms of the deal were not disclosed.

Most of the companies in the oil and gas industry – 94% -report they will have addressed fully by September anycomputer-related challenges posed by the arrival of the newmillennium, according to a survey tracking the industry’s Y2Kprogress that was released last week.

On the heels of a decision showing that Canadian landowners canforce changes, the National Energy Board has called hearings on 38objections to the route of Alliance Pipeline Project.

Florida-based FPL Energy Inc. said it will build, own andoperate a 1,000 MW, gas-fired power plant in Paris, TX, that willbe one of the largest independent generation projects in the state.Electricity generated at the site, about 100 miles northeast ofDallas, will be sold primarily in the Texas wholesale market. Threefirms, Texas Utilities Electric Co., Texas-New Mexico Power, andConstellation Power Source, have contracts to buy 700 MW of theplant’s output for various periods. Construction of thecombined-cycle plant is to begin immediately. Commercial operationis scheduled for mid-2000. The maximum daily quantity of gas thatwould consumed by the plant is 170,000 Dth/d.

The Natural Gas Supply Association (NGSA), which represents thenation’s major gas producers, last week placed its president,Nicholas J. Bush, on administrative leave without pay in the wakeof an investigation and a subsequent lawsuit. The suit accuses himof fraud and misappropriating more than $2.4 million from the groupsince the late 1980s. The D.C. Superior Court, where the suit wasfiled, has issued a temporary restraining order against Bush andhas continued the case until Feb. 26 [Docket No. 1028-99].

Those bemoaning the lack of a competitive market for electricityin California should look on the bright side. Things are movingalong, and the process is not finished, said Daniel D. Richard Jr.,senior vice president government and regulatory relations forPacific Gas and Electric.

Columbia, SC-based SCANA Corp. nearly doubled its regulated gascustomer base in the fast-growing Carolinas last week with thepurchase of Public Service Company of North Carolina (PSNC) for$900 million, including the assumption of about $250 million inPSNC debt. The combination will serve 517,000 electric, 760,000 gascustomers in the Carolinas and Georgia and 350,000telecommunications customers throughout the Southeast. Total annualrevenues for the combined company will be about $2 billion andmarket capitalization will be about $6 billion.