Contracts

Texas Independent Energy LP has signed three-year agreements with BP Energy Co. to supply natural gas and energy marketing services for two of the company’s 1,000 MW Texas-based generators. BP Energy will supply gas to the Guadalupe Power Plant near New Braunfels and the Odessa Power plant near Odessa.

CMS Energy has sold the government energy services division of CMS Viron to Pepco Energy Services for an undisclosed amount. Pepco was a partner with CMS Viron in numerous federal contracts including the largest federal government energy savings contract ever awarded in 1999 with the Military District of Washington. That contract covered five military bases in the Washington, DC, area.

CenterPoint Energy’s Pipeline Services unit announced that it recently signed two separate agreements with Northern Natural Gas (NNG) to provide operations and maintenance (O&M) services for NNG’s 30-inch Black Marlin System and its Matagorda Offshore Pipeline System (MOPS) along with some related offshore Louisiana pipeline assets.

Clauses within some energy trading contracts that were executed before Enron Corp. filed for bankruptcy last December are at the heart of another legal dispute with Dynegy Inc., but in this case, determining which one will be required to pay the other most likely will be decided in court. Dynegy earlier had paid Enron $25 million in August to settle a lawsuit over their cancelled merger (see Daily GPI, Aug. 16).

The New York Mercantile Exchange (Nymex) has set new annual volume records with 110 million futures and options contracts changing hands through Oct. 25, which exceeded the previous record of 109.5 million set in 1999. Natural gas futures volume set a new record at 20.73 million, which exceeded the previous record of 19.2 million set in 1999. The exchange also broke volume records for, among other things, total options (21.98 million), Nymex Division futures and options (95.78 million), Nymex futures (75.87 million), energy futures and options (95.58 million) and energy futures (75.67 million). Exchange President J. Robert Collins said the records, along with a 30% increase in overall trading volume over the same period last year and record seat values on the NYMEX Division, show the industry’s confidence in the exchange and its method of trading. “Not evident in these numbers is over-the-counter clearing activity, which, since its introduction on May 31, has seen more than $1.1 billion in trades cleared at the Exchange,” he added.

American Electric Power’s (AEP) announcement last week that it plans to mothball several power plants in Texas by the end of this year is likely to be just the start of what is expected to be a “sizable economic displacement” of incumbent utility generation, a new report by a Williams Capital Group analyst concludes.

El Paso Corp.’s accounting for results from restructured power contracts was in the headlines again Tuesday in the Wall Street Journal and The New York Times, and investors avoided EP shares like the plague in reaction to the news. El Paso’s stock plummeted 23% to $10.40, only a day after UBS Warburg raised its stock rating on the company to “Strong Buy.” Meanwhile, Standard and Poor’s (S&P) said it found nothing new in the newspaper reports and reaffirmed El Paso’s “BBB+/Stable/A2” credit ratings, despite the sharp downturn in its stock and in investor sentiment.

El Paso Corp.’s accounting for results from restructured power contracts was in the headlines again Tuesday in the Wall Street Journal and The New York Times, and investors avoided EP shares like the plague in reaction to the news. El Paso’s stock plummeted 23% to $10.40, only a day after UBS Warburg raised its stock rating on the company to “Strong Buy.” Meanwhile, Standard and Poor’s (S&P) said it found nothing new in the newspaper reports and reaffirmed El Paso’s “BBB+/Stable/A2” credit ratings, despite the sharp downturn in its stock and in investor sentiment.

Putting to rest the capacity release contract dispute raised by Tenaska Marketing Ventures against Northern Border Pipeline Co. in the wake of Enron Corp.’s bankruptcy, FERC ruled last Wednesday in favor of Northern Border, denying Tenaska’s complaint against the pipeline.