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Although critical of the utility’s handling of market risk, Idaho regulators Tuesday approved a $22.1 million, or 10%, rate hike for Intermountain Gas to cover increased wholesale natural gas costs, and they encouraged the utility to file another rate adjustment late this summer, before the winter heating season. The new rates take effect Thursday.

Shrugging off the urge to cover short positions, natural gas futures traders added to Friday’s sell-off Monday as they pressured the expiring July contract to its lowest level in two weeks. With that the July contract completed its tenure as prompt month in undeniably bearish fashion, slipping 21.2 cents to close at $6.141. At 88,613, estimated volume was light for an expiration-day.

Dominion Transmission is expecting Statoil to sign agreements that will cover all of the capacity in two proposed pipeline projects designed to provide a summer storage alternative for Cove Point liquefied natural gas (LNG). Dominion is planning to add about 800 MMcf/d of new sendout capacity and another 6.8 Bcf of onsite LNG storage space to the Cove Point terminal on the Chesapeake Bay in Maryland.

Dominion Transmission is expecting Statoil to sign agreements that will cover all of the capacity in two proposed pipeline projects designed to provide a summer storage alternative for Cove Point liquefied natural gas (LNG). Dominion is planning to add about 800 MMcf/d of new sendout capacity and another 6.8 Bcf of onsite LNG storage space to the Cove Point terminal on the Chesapeake Bay in Maryland.

Chattanooga Gas Co. (CGC), which serves 60,000 customers in southeast Tennessee, has asked the Tennessee Regulatory Authority (TRA) to adjust its rates beginning in March to cover rising costs of providing natural gas to its customers. CGC last increased its rates nine years ago. If the rate hike is approved, a typical residential customer would pay about $3.20 more per month. The total rate increase requested is approximately $4.5 million. However, a reduction in gas costs of over $1 million dollars will be put into effect in the spring of 2004; this change will reduce the amounts charged for gas on customers’ bills. CGC’s new proposed rate plan will provide relief to low-income elderly customers and align customer rates to more accurately reflect CGC’s costs of maintaining its natural gas pipeline system. It will also enable the company to replace 100 miles of aging pipe, consistent with CGC’s goal of continually modernizing the gas infrastructure that has served customers for almost a century. Lindsey cited other pressures that have lead to CGC’s decision to request a rate adjustment, including growing employee benefits costs and bad debt, or uncollectible customer bills. CGC also asked the TRA to approve a cost tracking mechanism for additional expenditures to permit the replacement of a 100-mile segment of its over 1400-mile pipeline system. Some of the pipeline is almost 100 years old and needs to be replaced. Construction is expected to begin during 2004.

Southern Union Co.’s Missouri Gas Energy (MGE) on Tuesday said it has filed a proposal with the Missouri Public Service Commission (MPSC) to increase base rates and to reduce the volatility of customer bills caused by dramatic changes in winter conditions.

The Minerals Management Service (MMS) released a notice in the Federal Register on Lease Sale 190, scheduled for March 17, 2004. The sale will cover 22.6 million acres and 4,281 available blocks in the Central Gulf of Mexico Outer Continental Shelf planning area offshore Louisiana, Mississippi, and Alabama. Estimates of undiscovered hydrocarbons expected to be discovered and produced as a result of this sale proposal range from 276 to 654 million bbl of oil and 1.59 to 3.30 Tcf of natural gas. Blocks are located from three to about 210 miles offshore in water depths ranging from four to more than 3,400 meters. The lease sale includes a continuation of shallow-water deep gas and deepwater oil and gas royalty relief measures that were adopted in other recent Gulf of Mexico OCS lease sales for the purpose of increasing domestic natural gas and oil production. In addition, lessees can apply for added discretionary royalty relief on these leases, if needed. The next lease sale will be Eastern Gulf of Mexico Sale 189 on Dec. 10. It will include 256 blocks in the Eastern GOM Planning Area and covers 1.47 million acres. Estimates of undiscovered economically recoverable hydrocarbons range from 65 to 85 million barrels of oil and 0.265 to 0.34 Tcf of gas. The MMS estimates the net economic value for sale 189 to be between $100 million and $500 million. For more details visit http://www.mms.gov/.

Dynegy Inc. said it intends to request a 15-day extension on filing its annual report with the Securities and Exchange Commission. The request will cover Dynegy and its two subsidiary registrants, Dynegy Holdings Inc. and Illinois Power Co. The filing is necessary for Dynegy to complete the financial statements and audit for the three companies. The re-audit of Dynegy’s financial statements for 1999 through 2001 is also in the final stages of completion. The company also announced that it is continuing its efforts to refinance its current bank facilities and that its financial statements are being prepared on this basis. “Dynegy assures its stakeholders that the 2002 Form 10-Ks will be filed as soon as the financial statements and the audits are completed, which will be during this extended time period,” said CEO Bruce A. Williamson. “These filings will provide our stakeholders with an accurate view of the financial reporting for previous years and the assurance that we have fully disclosed and properly accounted for our results.”

Dallas-based Denbury Resources Inc. estimated Thursday that its discovery well in North Padre Island Block A-9 offshore Texas in the Gulf of Mexico has total potential natural gas reserves of 90 Bcf (34 Bcf net to Denbury).