Convergence

Energy traders would do well to fasten their seatbelts for thecontinuing convergence of natural gas and power if the predictionof Coastal Corp. CEO David A. Arledge is correct. Increasingly, theprice of gas – the second most volatile energy commodity – will belinked with the price of power – the most volatile energycommodity, Arledge said.

Yet another example of gas-power convergence shows up in NGI’sranking of the top gas and power marketers based on third quartervolumes. Three of the top five marketers of each commodity and sixof the top 10 appear on both lists.

Yet another example of gas-power convergence shows up in NGI’sranking of the top gas and power marketers based on third quartervolumes. Three of the top five marketers of each commodity and sixof the top 10 appear on both lists.

Houston Industries (HI) is reconfiguring its organization tocapitalize on the convergence of gas and power. HI formed HoustonIndustries Wholesale Energy Group to combine its power generation,gas transportation, and wholesale energy trading and marketingcapabilities of the company.

NGC Corp. announced it is reorganizing its marketing and tradingoperations to reflect continued convergence of the gas and powerindustries and to “meet growing and different customer demands fora single source supplier.” In particular, the company announcedplans to combine the trading functions of Natural Gas Clearinghouseand Electric Clearinghouse, its gas and power marketing operations,and to make its gas liquids business a separate enterprise.

“Total Energy” may be an “unforgettable” brand name in this ageof energy convergence, as the small New York energy services firmTotal Energy Corp. claims, but would someone actually buy the nameand make it their own? Total Energy’s consultant R.J. RuddenAssociates thinks so, though Richard J. Rudden, president of thefirm, admits he’s never heard of a company buying another’s brandname. “I can’t say I’ve heard of that. But I know it’s nothing fora large national energy company to spend tens of millions ofdollars on brand imaging.”