Improvements

Consultants hired by the staff of the Virginia State Corporation Commission (SCC) agree that a critical need exists for electric reliability improvements by 2011 in northern Virginia and recommend that Dominion Virginia Power’s proposed route for a transmission line would meet that need with the least impact to the state, the Richmond, VA-based utility said Wednesday.

Improvements in the overall natural gas supply and demand balance are in store in the intermediate term, which should result in lower prices, according to a new report by an Arlington, VA-based energy consultant. But in the longer term, it said higher prices will be required to spur the development of adequate supplies to satisfy increasing demand.

Citing natural gas price volatility and electric generation improvements, Rapid City, SD-based Black Hills Corp. CFO Mark Thies Friday said the company’s energy marketing unit had a “very strong” first quarter, following an equally strong last quarter in 2006, and it continued to look to coal-fired generation as being viable in the future, despite the onslaught of states adopting coal-restrictive global climate change initiatives.

While following a strategic mandate to transform its utility operations using smart metering and other technology improvements, Pacific Gas and Electric Co. does not plan to push for renewed emphasis on retail customer choice, according to Peter Darbee, CEO of the utility’s parent company, PG&E Corp.

National Grid and KeySpan Corp. have filed information in compliance with the Hart-Scott-Rodino (HSR) Antitrust Improvements Act, a requirement of their proposed merger transaction, the companies said on Friday. In addition, National Grid and KeySpan have made voluntary notice to the Committee on Foreign Investment in the United States (CFIUS) that National Grid, a London-headquartered company, is acquiring a U.S. company. In both the HSR and CFIUS filings, the applicable federal authority has 30 days to determine if the filings require further review. On Feb. 27, National Grid and KeySpan announced an agreement for National Grid to acquire KeySpan, which will materially expand the size of National Grid’s US operations and create the third-largest gas delivery utility in the U.S. (see Daily GPI, Feb. 28). In May, National Grid and KeySpan submitted their merger plan to FERC, promising no adverse impacts on the wholesale energy market nor any cross subsidization from regulated to unregulated operations from the $7.3 billion combination (see Daily GPI, May 30).

Devon Energy Corp.’s quarterly profit rose sharply on rising energy prices, share repurchases and operational improvements, but its oil and natural gas production, compared with a year ago, was down because of hurricane impacts and asset sales. Meanwhile, Southwestern Energy Co., which concentrates its activities in some of the same U.S. onshore regions as Devon, increased its gas-rich volumes 14% and boosted earnings 79% in 1Q2006.

Devon Energy Corp.’s quarterly profit rose sharply on rising energy prices, share repurchases and operational improvements, but its oil and natural gas production, compared with a year ago, was down because of hurricane impacts and asset sales. Southwestern Energy Co., which concentrates in some of the same U.S. onshore regions as Devon, increased its gas-rich volumes 14% and boosted earnings 79% in 1Q2006.

Improvements in gathering and processing, mainly in the Williston Basin, should help offset the impact of having a significant amount of firm transportation capacity on Northern Border Pipeline uncontracted this year, Northern Border Partners reported on Wednesday. The company said it expects the market conditions that led to the 600 MMcf/d of uncontracted capacity, or one-quarter of its total pipeline capacity, in April to continue through the second quarter, possibly longer. As a result, it lowered its 2005 earnings guidance by about 4%.

Improvements in gathering and processing, mainly in the Williston Basin, should help offset the impact of having a significant amount of firm transportation capacity on Northern Border Pipeline uncontracted this year, Northern Border Partners reported on Wednesday.