Growing

The Federal Energy Regulatory Commission yesterday approved aninitiative calling for it to conduct an inquiry into projecteddemand for natural gas in the Northeast quadrant of the UnitedStates and the corresponding need for new pipeline capacity in theregion.

In a report released yesterday, the Mid-America InterconnectedNetwork (MAIN) said it expects a new peak for power demand in themidwestern NERC region this summer but power supplies should be”significantly improved” compared to the past two summers. The MAINstudy forecasts a peak demand of 48,157 MW this summer, compared to46,824 MW in 1998.

The overall tone of the cash market remained flat Thursday, buta growing number of points were recording tiny decreases. Thetouches of softness came even as an eastbound cold front reachedthe nation’s midsection, reminding regions that had beenexperiencing record seasonal warmth recently that winter isn’tquite over yet. One source speculated that prices may be finallystarting to crack under the strain of having maintained theirpositions during a long period of no fundamentals support. Even thearrival of some for-real weather fundamentals may not be enough toprovide support, he said.

Volume growth in the power marketing business dwarfed that ofgas with some marketers posting year-to-year increases of more than1,000% with gains of more than 100% not unusual. Total salesvolumes for the year for the top-20 gas marketers rose 17%, or 17Bcf/d, whereas for the power marketers volumes soared 103%, or935.81 million MWh, to 1,841.44 million MWh. Such leaps are notsurprising considering power marketing is a less mature businessthan gas and targets a much larger market.

Columbia Gas Transmission Corp., a partner in MillenniumPipeline, has joined the growing ranks of pipeline sponsors thatare asking FERC to issue preliminary determinations (PDs) posthaste so that they can finalize shipper commitments and meet theirprojected in-service dates.

Deregulation and competition continue to spark changes inutility company boards, from increased use of stock to compensatedirectors to growing numbers of directors from the financial fieldto greater frequency of board meetings. These are key findings inthe just-released fourth annual Spencer Stuart Utility Board Index(UI) report, which analyzes the proxy statements of 50 leadingutility companies nationwide. The report focuses on membership andpractices of the nation’s utility boards, and this year highlightsthat many utility boards are becoming more like their counterpartsat Standard &amp Poor 500 companies.

Samson Investment Co. of Tulsa, OK, completed its acquisitionfrom Nuevo Energy Co. of gas properties in East Texas. The totalpurchase price was $192 million. In addition to existingproduction, the properties contain more than 135 drillinglocations. The closing follows Samson Resources’ December closings,which included the acquisition of properties in six states fromDuer Wagner & Co. for $41 million and the acquisition ofcertain properties in the Homeglen-Rimbey and Westerose areas ofAlberta, Canada from Chevron Canada Resources for $9 million bySamson Canada Ltd.

Texaco joined the growing crowd of producers revising downwardcapital expenditures for 1999. The company said its 1999 capexwould total $3.7 billion, including subsidiaries and affiliates,down $600 million from its original $4.3 billion plan. Chevron,Arco and Unocal announced similar reductions last month.

Midcoast Energy Resources last week piled more assets onto its growing Texas-Louisiana pipeline empire with two separate deals worth a combined $4.55 million.