Improvements

Citing gains in the large customer retail business and potential market improvements in wholesale power, analysts at Standard & Poor’s Equity Research gave Constellation Energy Group two thumbs up last week despite the one thumb down the company has been getting from investors lately with its stock off 3.2% year to date as of June 18. CEG shares were trading around $38 on Friday, up from 52-week lows in May but still down from price levels at the beginning of the year.

Citing gains in the large unregulated retail business and potential market improvements in wholesale power, analysts at Standard & Poor’s Equity Research gave Constellation Energy Group two thumbs up on Wednesday despite the one thumb down the company has been getting from investors lately with its stock off 3.2% year to date as of June 18.

The Market Price Reporting Action Committee (MPRAC), an ad hoc group of about 40 gas and power industry companies, exchanges, trade associations and price index developers, told FERC last week that it is disbanding because it has completed its mission of analyzing the current gas and power price reporting system and reporting the results to the Commission.

The Market Price Reporting Action Committee (MPRAC), an ad hoc group of about 40 gas and power industry companies, exchanges, trade associations and price index developers, told FERC this week that it is disbanding because it has completed its mission of analyzing the current gas and power price reporting system and reporting the results to the Commission.

Downstream improvements and high commodity prices propelled ChevronTexaco Corp. to a 33% gain in profits during the first quarter compared with a year ago, but domestically and worldwide, oil and gas production declined.

Even with a conservative Henry Hub gas price forecast of $5/MMBtu in 2004 and $3.50 over the long term and an oil price forecast of $30/bbl in 2004 and $21/bbl for beyond 2005, the credit rating picture and overall fundamentals for the exploration and production sector should continue to improve unless certain thorny issues, such as reserve revisions, get in the way of some companies, Standard and Poor’s (S&P) said in a new report.

Mirant, which is in Chapter 11 bankruptcy, reported minimal financial improvements in the third quarter, including a $33 million net loss, or 8 cents/share, compared $41 million, 10 cents/share, in 3Q2002.

The U.S. Department of Energy (DOE) has teamed up with the Pennsylvania State University to research improvements in underground gas storage technology. Under an agreement, a consortium will be created by Penn State and DOE’s National Energy Technology Laboratory Strategic Center for Natural Gas that will operate for four-and-a-half years with funding of about $3 million.

South Jersey Industries Inc.’s gas unit, South Jersey Gas, has petitioned the New Jersey Board of Public Utilities to increase its base rates to cover infrastructure improvements and higher health care and pension benefits. The utility has requested a $42.7 million, or 8.7%, increase in operating revenue, which would increase base rates by $52.7 million. The request also includes a proposed credit to reduce a gas supply service clause by $7.8 million. Under the proposed hike, a typical residential bill would be $23.15 in the winter, however, South Jersey said customer bills are expected to decrease over the next year after the completion of customer payments to cover historical gas costs. The net effect of the price hike will typically increase customers’ monthly bills by $12.34, or 4.5%, the company said. Rate hike requests generally take about one year to be processed, and the higher prices would most likely not take effect until late in 2004. If natural gas prices go down over the year, South Jersey said it will decrease a portion of its request.