Dynegy

Energy stock prices joined the rising tide on the stock market Monday, with Mirant, Calpine and Dynegy leading the wave with gains of more than 11% for Mirant and close to 9% for Calpine and Mirant. Also having a good day were Williams, Reliant and AES, all up by more than 3%. Other energy suppliers saw rises up to 3%. The only group still recording more losers than winners were natural gas utilities. The stock prices of energy companies have been battered in recent months by low energy prices and the Enron implosion. No one yet is calling it a turnaround point, but there was one positive indicator: Monday was the first day in a looooong time that Enron wasn’t on the front page of The Houston Chronicle or The Washington Post.

Following word of the failed Enron Corp./Dynegy merger, fallout continues to rock the nation in more ways than one might expect. AGL Resources Inc. reported that Sequent Energy Management, its asset optimization subsidiary with a large portfolio of assets under management in the Southeast, has reached an agreement with Enron for early termination of an asset management contract related to Virginia Natural Gas (VNG), also a wholly owned subsidiary of AGL Resources.

Tennessee reported being notified by Dynegy Midstream Services,operator of the Yscloskey Gas Processing Plant in southeasternLouisiana, that effective April 1 the plant will no longer process”strangers” gas that does not have a contractual relationship withthe plant. In the event this action causes Tennessee to once againexperience operational difficulties attributable to gas with highBtu levels, the pipeline said, it will do whatever is necessary tolower overall Btu content on its 500 Line to manageable levels.

A basis blowout of immense proportions has occurred betweenRocky Mountain region supply basins and the Southern Californiaborder this month and it appears to expanding as we enter August,leading to widespread speculation and controversy in the industryabout its causes.

Mary Doyle, formerly policy advisor for FERC CommissionerWilliam I. Massey, has been named director of regulatory policy forDynegy Inc. Doyle also served in the gas pipeline rates division atFERC through the gas restructuring process.

Start-up costs and rapid Georgia customer acquisitions by itsSouthStar Energy Services partnership with Dynegy and AGLResources, cost Piedmont Natural Gas about $0.06/share during itsthird quarter, which ended July 31, the company reported this week.It experienced a net loss of $8.2 million (-$0.26/share) during thequarter, compared with a net loss of $6.3 million (1$0.20/share)during the same period a year earlier. As of Oct. 1, SouthStar willbe serving more than 450,000 new gas customers in Georgia. Theearnings per share impact of this venture for the first nine monthsof the year was -$0.10/share. Piedmont also noted that weather inits territory was 57% of the thirty-year normal heating degreedays. The company’s margin (revenues less cost of gas) was $44.4million compared with $45.5 million for the comparable year-agoperiod. For the nine-month period, basic earnings per share were$2.17, compared with $2.32 for the year-ago period, and margin was$279.8 million compared with $282.6 million for the prior yearperiod.