Existing

As capital markets dry up and the go-go merchant power plant operator-developers attempt to tighten their balance sheets, opportunity knocks for a small handful of large energy concerns to expand their asset base of merchant electric generating plants at below-value purchase prices, according to one Wall Street utility analyst who is bullish on the big, established energy companies.

Kern River Gas Transmission’s 2003 Expansion Project, which is expected to double the existing capacity of the pipeline, got a joint draft environmental go-ahead from the Federal Energy Regulatory Commission and the California State Lands Commission (CSLC).

The bill amends existing law to authorize the railroad to issue bonds to finance the construction and maintenance of a gas line and related facilities for transporting natural gas from Alaska’s North Slope. It also authorizes the railroad to negotiate with producers of natural gas on the bond issue.

Despite softer futures and continued relatively mild late-January weather outside the West and Upper Plains, prices either leveled off around flat or registered small gains nearly across the board Monday. Most of the larger increases of about a nickel occurred on Midcontinent and Rockies/Pacific Northwest pipes, because that’s where the worst winter weather was concentrated.

In an attempt to dissuade anyone from the notion that power markets are going to become over-built any time soon, Calpine Corp. held the second of a series of three conference calls last week with the financial community, reinforcing that it is not backing off its goal of having 70,000 MW of new capacity on line by the end of 2005, and growth in its $1.4 billion natural gas holdings will increase along with the new plants.

Created from an existing company in March, Sequent Energy Management LP, a subsidiary of AGL Resources, is taking the natural gas wholesale trading, marketing and asset management industries by storm, drawing traders from many of the major players in the energy trading business. “We are not making any friends at Dynegy or Enron,” said Rick Duszynski, CEO and president of Sequent Energy.

Sticking with its strategy of adding electric generating capability in key U.S. markets, PPL Corp. yesterday unveiled plans to build a 540 MW power plant near Chicago and, separately, to increase the capacity of its Susquehanna nuclear plant in Pennsylvania by 100 MW.

Natural Gas Pipeline Company of America (NGPL) is proposing an expansion and extension of its existing system in northeastern Illinois to serve a planned new electric power plant, which will be constructed to meet a spring, 2003 in-service date. An open season started April 13 and will close at 5 p.m. CT on Friday, April 27. Natural proposes to expand the capacity of its Volo lateral (starting at Compressor Station 113), North Chicago, and Moraine Lateral by 75,000 Dth/d with the addition of compression. Also, a new eleven-mile, 20-inch lateral with a design capacity of 75,000 Dth/d would be built east from the Moraine Lateral to the site of a planned 550 MW electric power plant in the city of Waukegan, IL. Shippers must return an executed precedent agreement for a minimum of 16 years. Natural has proposed a negotiated rate including a fixed reservation charge of$4.5626 per Dth of contract maximum daily quantity, a maximum commodity rate for an Iowa-Illinois receipt to a Market zone delivery, which is currently $0.0021 per Dth in the peak period and $0.0005 during the off-peak period, plus a tariff fuel rate for an Iowa-Illinois to Market Zone delivery (currently 1.81%). For further information contact David E. Oros at (630) 691-3196.

Natural Gas Pipeline Company of America has proposed expanding a portion of its existing system capacity in southeastern New Mexico to increase deliveries to California. Natural wants to add new compression on a leased basis to its Indian Basin Lateral and other facilities to make deliveries of up to 42,000 Dth/d by the fourth quarter of 2001 through Transwestern Pipeline in Eddy County, NM.