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PP&L Resources, a utility based in eastern Pennsylvania, iscementing its ties in the western U.S., buying the energy marketingoperation of The Montana Power Co. to go with the 13 powergeneration plants it is in the process of buying from the samecompany.

Even before their merger is consummated, Dominion Resources andConsolidated Natural Gas are making plans to begin development offour gas-fired electric power generation facilities along CNGTransmission in Ohio, Pennsylvania and West Virginia. Thefacilities represent up to $800 million in local investment. Allfour plants are expected to be in service in time for peak summerdemand in 2002.

The U.S. Senate is closing in on a set schedule of hearings forall pending federal electric deregulation proposals, Senate EnergyCommittee Chairman Frank Murkowski (R-AK) said at a committeehearing Wednesday. The schedule will include a hearing date for theDept. of Energy Secretary Bill Richardson’s administrationproposal, allowing interested parties to comment on itscontroversial 7.5% renewable energy mandate.

TNP Enterprises, the parent company of Texas-New Mexico PowerCo. (TNMP), was bought by a group of investors headed by WilliamCatacosinos, the former CEO of Long Island Lighting Co., for $1billion, including assumed debt, the parties announced yesterday.The deal, which TNP said was the first leveraged buyout of anelectric utility, is expected to close in six to nine months.

American Electric Power and Central and South West Corp. reacheda settlement with FERC trial staff that resolves the market powerand rate issues relating to the pending merger of the twocompanies. Under terms of the settlement, AEP would transfer theoperation and control of its bulk transmission facilities locatedin Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and WestVirginia to a regional transmission organization (RTO). Thesettlement also covers rates for transmission services andancillary services and confirms, subject to FERC guidance oncertain elements, that the previously announced generationdivestiture program will satisfy the market power concerns of theFERC staff. Once the merger is completed, the new company will beserve 4.7 million electric customers in 11 states.

PG&E Gas Transmission-Northwest now expects Unit 5-C toreturn to service for June 1 operations, raising Kingsgate capacityto 2,360 MMcf/d. The return of Unit 7-C is scheduled for June 10,with Kingsgate reaching 2,520 MMcf/d.

A Mexican government decision to eliminate a tariff on naturalgas imports July 1 was heralded as good news for U.S. pipelines andMexican consumers. Currently 4%, the tariff on U.S. gas imports,was to be eliminated in 2003 following annual reductions of 1%. Thetariff went into effect at 10% with the signing of the NorthAmerican Free Trade Agreement (NAFTA). The tariff’s elimination isintended to boost gas availability to Mexico’s northern region asthe country turns more and more to gas-fired power generation.

The on-again, off-again Southern Crossing project of BC Gascould go forward assuming the company agrees to terms specified inan approval from the British Columbia Utilities Commission (BCUC).

BT Alex. Brown analyst Adam Sieminski said he expects U.S. gasprices to average $2.10/MMBtu this year, which is up 15 cents fromhis previous forecast of $1.95/MMBtu, because of rising demand,declining wellhead deliverability and the falling storage surpluscompared to last year. Sieminski said the tightness in marketfundamentals will peak this winter and carry strong prices throughnext year. He raised his forecast for prices in 2000 to $2.40 froma previous estimate of $2.20.