Increased

To prepare for the coming peak period of electricityconsumption, the New York State Public Service Commission (PSC) hasannounced it will monitor the state’s wholesale electric marketduring this first summer of its operation. The market now isadministered by the New York Independent System Operator (NY ISO),an independent non-profit organization that operates the state’sbulk power system and administers a competitive wholesale marketfor electricity.

Construction is complete, and Transwestern Pipeline Co. hasincreased its available capacity to California by 15%, a moveproviding expansion shippers with opportunities to move incrementalvolumes from the San Juan and Permian Basins to the Californiaborder. The $12 million project was approved by FERC in mid-January(see NGI, Jan. 17, 2000).

Construction is complete, and Transwestern Pipeline Co. hasincreased its available capacity to California by 15%, a moveproviding expansion shippers with opportunities to move incrementalvolumes from the San Juan and Permian Basins to the Californiaborder. The $12 million project was approved by FERC in mid-January(see Daily GPI, Jan. 13, 2000).

Columbia Gas began an open season Wednesday to assess interestin increased FT on Line 10338 in New York from the Ramapo Stationto the Buena Vista Station. The expansion would be achieved throughan upgrade of Ramapo Station. Contract terms would be for 10 yearsor longer, but the service would terminate automatically ifColumbia abandons Line 10338 by conveyance to its proposedMillennium Pipeline project. The open season will run through 4:30p.m. EST March 31. The pipeline also is asking existing FTcustomers on Line 10338 if they wish to permanently turn back theircapacity. Call Bernie Schaffler at (703) 227-3265 for moreinformation.

Reliant Energy’s increased focus on the non-regulated side ofthe energy business has apparently made the former pipeline anddistribution assets of NorAm Energy no longer attractive to thecompany. Reliant said last week it hired an investment banking firmto evaluate strategic alternatives for two of its gas distributioncompanies and its gas pipeline operations.

Prices at most points increased yesterday as influences fromstorage plays and a rising futures screen overcame a lack ofseasonal cold weather in major market areas. In general, upticks ofa few cents were the most common in the West, Rockies, Gulf Coastand Midcontinent. The Northeast, however, continued the fall itstarted on Monday, as many points in the region lost anywhere fromabout a nickel to more than a dime.

Directed by strong gas, power and liquids operations, DynegyInc. reported yesterday a 56% increase in 4Q99 net income to $45.1million and a 50% increase in 1999 recurring net income to $146.1million. In addition to that good news, the Houston-based companyalso said its merger with Illinova Corp., should be complete byearly February.

Natural gas production from the deep water Gulf of Mexico hasincreased 252% over the last five years, from 159 Bcf in 1994 to560 Bcf in 1998, according to the Department of Interior’s MineralsManagement Service.

A veteran natural gas reserve and production expert has issued abearish warning to natural gas market observers: 1998 total reserveadditions could jump as much as 3 Tcf from 1997’s figure to between22 and 23 Tcf. That would be well above the range of 14.9 to 20.2Tcf over the last nine years. With 1998 production estimated atabout 19 Tcf the forecast adds up to reserve additions exceedingproduction by 116% to 121%.