Control

The Connecticut Department of Public Utility Control (DPUC)approved the merger of Northeast Utilities, the state’s largestelectric utility, and Yankee Energy System, the parent of YankeeGas Services, the state’s largest gas distributor. Yankeeshareholders approved the merger agreement, in which YES willbecome a subsidiary of NU, on Oct. 12. According to the deal, NUwill pay $478 million for all of YES common equity. The mergerstill requires the approval of the Securities and ExchangeCommission, which is expected early next year.

Prima Energy Corp. reported last week that it has acquired orgained control of approximately 77,000 gross and 73,000 net acreson the Wasatch Plateau in central Utah, an area that has revealedsignificant coalbed methane (CBM) gas discoveries in the past.

Indiana consumers and government officials would gain more localcontrol over merchant power plant sitings under legislation nowmaking its way through the Indiana House. HB 1979, sponsored byRep. Tiny Adams (D-Muncie), would give local municipalities andzoning boards more veto power over the siting process.

Though they’ve been told again and again by state regulatoryofficials that a California crisis can’t happen in Texas, twoHouston lawmakers have filed legislation to expand the state’sauthority to limit electric deregulation, which begins on a pilotbasis in June. And in Oklahoma, legislators have decided topostpone deregulation for at least two years.

An expiration-day nosedive by the February futures contract,chilly but unremarkable weather for this time of year (despitesnowfall and icing in some northern market areas), and the prospectof more small storage withdrawal reports in coming weeks kept bearsin command of the cash market Monday.

Though they’ve been told again and again by state regulatoryofficials that a California crisis can’t happen in Texas, twoHouston lawmakers filed legislation last week to expand the state’sauthority to limit electric deregulation, which begins on a pilotbasis in June. And in Oklahoma, legislators have decided topostpone deregulation for at least two years.

Buoyed by private forecasts that cast doubt on governmentforecasts calling for a warm up, along with several constructivetechnical features, natural gas futures erupted higher yesterdaymorning as weak shorts exited their newly acquired positions. TheFebruary contract finished 77.7 cents higher on the day at $8.966after reaching a high at $9.189.

In another topsy-turvy trading session, natural gas futuresfinished well off daily highs, but still in positive territoryyesterday as players bid up the market in the morning only to dumpit lower after fresh storage data was released. The Januarycontract traded within a wide, 50-cent range and closed 22.4 centsstronger at $9.326. Most of the out-months were much more staid,with May through December 2001 contracts only able to tack on a1.5-cent gain. Illiquid trading contributed to the volatility asless than 45,175 contracts changed hands.

With ceremonial taps on two cordless computer mice to power upthe high-tech control room in Calgary, Alliance Pipeline enteredservice amid forecasts that it will rapidly be put to full use.Alliance did not immediately announce the opening amount of gas inits 2,300-mile route from Fort St. John in northeastern BritishColumbia to Chicago. But industry sources said it was filling uprapidly after curing startup glitches that postponed the event fora month, with about 800 MMcf/d flowing or 60% of its scheduledvolumes. The line was installed with ability to take up to 1.5Bcf/d in order to guarantee service on its 1.325 Bcf/d inlong-term, firm transportation contracts.