Dismissed

A Transwestern Pipeline executive yesterday dismissed allegations that the pipeline withheld firm transportation capacity bound for California from its recourse-rate shippers last winter in order to free up more capacity for contracts at substantially higher negotiated rates.

The New York Board of Trade (NYBOT) and the New York MercantileExchange (Nymex) have announced a settlement of the litigationbetween them relating to the suspension of a clearing member, Klein& Co. Futures, Inc., from NYBOT and its clearinghouse, the NewYork Clearing Corporation (NYCC).

The United States District Court for the Western District ofOklahoma dismissed the securities litigation filed in late 1997against Chesapeake Energy and its officers and directors and ruledin their favor. The litigation, which originally consisted of 12lawsuits but which was consolidated into one class action suit in1998, charged that Chesapeake had misstated or omitted factsconcerning its activities in the Louisiana Austin Chalk Trend fromJan. 25, 1996 through June 25, 1997. The shareholder suits allegedthat they had been mislead by Chesapeake into thinking that thecompany expected to operate successfully in the entire Austin Chalkarea, including the area outside Masters Creek, resulting in aninflated share price. Shareholders said rather than disclosingunsuccessful drilling results in the outer Masters Creek area,company insiders disposed of nearly 200,000 company shares with amarket value of about $2.2 million. In June 1997, Chesapeakeannounced it expected to take a full-cost write-down of itsinvestment in areas of Louisiana outside of Masters Creek totaling$150 million to $200 million. Following that, Chesapeake’s stockprice plummeted. In dismissing the plaintiffs’ amended complaint onMarch 3, the Court found that throughout the alleged class period,Chesapeake had disclosed to its investors the “precise risks”associated with its investments and activities in the LouisianaTrend. The court also determined that the plaintiffs had providedno factual support for their allegations of misstatements oromissions by Chesapeake.

California regulators last week on a 3-2 split vote dismissed aproposal for allowing natural gas distribution competition in anindustrialized part of the East San Francisco Bay. The majority,led by the current president of the California Public UtilitiesCommission, rejected an alternative proposal by two members of thefive-member CPUC.

On a 3-2 split vote, California regulators last week dismissed aproposal for allowing gas distribution competition in anindustrialized part of the East San Francisco Bay. The majority,led by the current president of the California Public UtilitiesCommission, rejected an alternative proposal by two members of thefive-member CPUC.

A day after a Delaware Judge dismissed one of three NiSourcelawsuits against Columbia Energy Group, NiSource suffered yetanother setback in its battle for a hostile takeover of Columbia.Ohio State Representative David Goodman (R-Bexley), who already haspublicly opposed the merger, has introduced legislation designed toclose a loophole in Ohio law that would allow hostile takeovers ofgas utilities to take place without public review and scrutiny.Goodman was joined as sponsor of the legislation by 77 of the 99members of the Ohio House of Representatives.

NiSource Inc. has lost another round in its takeover bid forColumbia Energy. A Delaware court judge earlier this week dismissed aNiSource lawsuit aimed at forcing Columbia to reconvene its annualstockholders’ meeting in order to elect a 13th member to the board ofdirectors. NiSource claimed Columbia acted illegally in not fillingthe vacancy at its last annual meeting. NiSource was seeking to electits own representative for Columbia’s board as part of its campaign toannex the Herndon, VA, company through a $68/share hostile takeover. ADelaware Court of Chancery judge said Wednesday he did not believethere was a legal or practical basis for restaging the annualmeeting. NiSource, which made the takeover bid in early June, has twoother lawsuits targeting Columbia still to be decided (See Daily GPI,July 30).

A top-ranking FERC official last week dismissed suggestions thatthe Commission was dragging its feet on key pipeline projects thatwould ship natural gas to the Northeast – namely the proposedMillennium, SupplyLink, MarketLink and Independence lines. “…[W]elove new pipelines,” said Richard O’Neill, director of the Officeof Economic Policy, “but we don’t want these new pipelines to turninto stranded costs.” Also, he cited environmental concerns.

A top FERC official dismissed any hint the Commission wasdragging its feet on key pipeline projects that would ship naturalgas to the Northeast – namely the proposed Millennium, SupplyLink,MarketLink and Independence lines. “…[W]e love new pipelines,”said Richard O’Neill, director of the Office of Economic Policy,”but we don’t want these new pipelines to turn into strandedcosts.” Also, he cited environmental concerns.