Equity

Several favorable actions and events led Fitch Ratings to give Dynegy Inc. and its affiliates a “stable” outlook on Thursday, removing the energy merchant from Rating Watch Negative for the first time in nearly 20 months.

In an effort to expedite regulatory approval of CMS’ sale of Panhandle Eastern Pipe Line and subsidiaries, AIG Highstar Capital LP., a private equity fund sponsored by American International Group, has decided to withdraw from the transaction, making Southern Union the sole purchaser of the interstate gas pipeline business.

Merrill Lynch said in an equity research note that at least 7,000 MW of nearly built power generation has been canceled. In fact, of the 7,000 MW, nearly 75% was more than 20% completed. Another 5,800 MW of already completed plants has been mothballed, and an additional 25,000 MW of proposed generation has been taken off the drawing board.

Peoples Energy Corp. has invested $5 million in EnerTech CapitalPartners II LP, a private equity firm specializing in investmentopportunities for the deregulated energy, utility andtelecommunications industries. With Peoples’ monetary commitment,EnerTech now has $235 million in committed capital to makeinvestments.

Texaco bought a 20% equity stake in hydrogen storage specialistand fuel cell developer Energy Conversion Devices, Inc. (ECD) lastweek for $67.3 million. While the major producer has not lost sightof the importance of its upstream and downstream businesses nor thesurge in mergers among its major competitors, it has chosen tofocus on a variety of new technologies that it believes willdetermine the future of the automobile and electric powerindustries.

Texaco bought a 20% equity stake in hydrogen storage specialistand fuel cell developer Energy Conversion Devices, Inc. (ECD)yesterday for $67.3 million. While the major producer has not lostsight of the importance of its upstream and downstream businessesnor the surge in mergers among its major competitors, it has chosento focus on a variety of new technologies that it believes willdetermine the future of the automobile and electric powerindustries.

Raymond James & Associates Equity Research group warnedclients this week a return to normal temperatures this winter couldbring a greater gas market surprise than expected. Winterconsumption spikes over the past two winters have trended downward,but that was because winter 1996/97 was nearly 5% warmer thannormal and last winter was nearly 9% warmer than normal, the firmnoted. Normal weather likely will bring a significant increase inconsumption and with it a significant increase in gas prices thiswinter compared to last.

Announcements of new pipeline projects are booming despiterecently voiced concerns by pipeline executives that return onequity is not sufficient to justify new construction (see NGI, Feb.2). A recent NGI survey of projects announced over the last threeyears indicates more than 7 Bcf/d of new capacity has already beenconstructed in the U.S. and Canada, with nearly 21 Bcf/d ofcombined capacity additions approved or under consideration. Thisis in addition to projects canceled or put on hold indefinitely.