New Century Energies and Northern States Power, two mid-sizedcombination utilities, decided on marriage yesterday to create amuch larger company, fend off competitors and prepare for comingderegulation. Through a $4.7 billion merger of equals ($9 billionbased on combined market capitalization), the companies will createa Minneapolis-based electric and gas utility conglomerate with 3million power customers and 1.5 million gas customers in 12 statesfrom Mexico to Canada.
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Most Points Mildly Stronger; Sumas Soars Again
With conflicting influences in several directions, much of thecash market decided to take a break Thursday and not wander veryfar from Wednesday’s levels. Small gains at most points outweigheda few scattered decreases. Modest strength in the Henry Hub gasfutures contract was countered by crude oil futures falling harderthan it had risen Wednesday, even as the U.S.-led air strikescontinued against Iraq Thursday. And forecasts for widespreadbelow-normal temperatures during Christmas week apparently meantless to gas traders than the current still-relatively-mildconditions.
CPUC’s Hands are Tied on Restructuring Issues
The California Public Utility Commission yesterday decided toleave Southern California Gas Co.’s interstate transportation ratesbundled, determining that a state law passed last summer preventsthe commission from taking any action on gas industry restructuringissues until the year 2000.
PacifiCorp Back to Basics Move Not Unique
The new chief executive at PacifiCorp decided the cure for thecompany’s sickly earnings is a strategy successfully attempted byother utility companies that found themselves in trouble: get backto basics.
Georgia Aggregator Waiting for Bids
Grass Roots Energy Company, a buyer’s agent for 34,000residential gas customers in Georgia, decided to delay signing witha marketer amid the frantic atmosphere of the state’s first attemptat deregulation. The first signing period ended earlier this week,and the 16,000 Atlanta Gas Light (AGL) customers who did switch tonew marketers will have new service starting Nov. 1, 1998. (SeeDaily GPI, Oct. 28)
Storm Threat Fails to Impress Softer Cash Markets
Overall the cash market Thursday decided one bearish storagereport in the hand was worth more than two tropical storms in thebush. But although nearly all points checked in as flat to downabout a nickel, sources said the softness probably would have beenquite a bit greater if it hadn’t been for September’s thirdstraight weekly storm threat to Gulf of Mexico production,especially in light of the screen’s nickel-plus drop.
PG&E May Face Stiffer Fine for Affiliate Violations
State regulators decided yesterday to perhaps up the ante inconsidering penalties against Pacific Gas and Electric Co. foralleged rules violations in advertising and promotion materials bysome of its unregulated energy affiliate companies.
CPUC Eyes Distributed Power
California regulators have decided to review the potential fordistributed power generation as part of a series of three”roundtable workshops” on offshoots of the state’s electricindustry restructuring. The first roundtable will be held Aug. 3,1-4:30 p.m. at the California Public Utilities Commission’s SanFrancisco headquarters. Utility, trade association and consumerrepresentatives will participate.
Price Spike Psychs California ISO
After counseling from some of its board members, the CaliforniaIndependent System Operator (ISO) has decided not to seek relieffrom the Federal Energy Regulatory Commission for an unprecedentedprice spike it experienced July 9 for reserve power in California’srestructured electricity markets, according to an ISO spokesperson.
Prices Soar on Spreading Heat, Wednesday Screen
Cash traders apparently decided to ignore a relatively bearishstorage report, a retreat in Wednesday afternoon’s Access futurestrading and a further small downtick on the screen Thursday.Instead they focused on Wednesday’s jump of almost 20 cents inregular futures business and tried to match it in cash businessThursday-coming close in the cases of Agua Dulce and NGPL-SouthTexas, which both rose about 14 cents. Other points moved up in thevicinity of a dime. Standout exceptions were Malin andintra-Alberta, which managed increases of only a nickel or so. Themildness of the Malin uptick occurred even though PG&E failedto extend Thursday’s OFO.