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The move by Houston Industries (HI) last week to reconfigure itsbusiness to meet the demands of gas and power convergence followsrecent actions to build up its power generation division. HI formedHouston Industries Wholesale Energy Group to combine its powergeneration, gas transportation, and wholesale energy trading andmarketing capabilities of the company.

ARCO announced a major cost reduction program last week thatwill chop $500 million in before-tax expenses and 900 employeesfrom it operations over the next two years. The majority of thecut-backs, $350 million, are expected in 1999.

Last week’s agreement by Semco Energy Gas Co. to a three-yeardeal with TransCanada PipeLines Ltd. for management of its gassupply gives TransCanada its largest asset management relationshipto date. Semco also will buy the majority of its gas supplies fromTransCanada for the three years of the agreement, which iseffective April 1, 1999.

The electric industry will swallow up the majority of thenatural gas distributors over the next 10 years, predicted amarketing executive last week, adding that the doubters of thisscenario are forgetting or just don’t know how “extremely big”electricity is.

Advising that pipeline monopoly power has increased with theconsolidation which has been going on over the last several years,Rebecca McDonald, an executive with Amoco and chairman this year ofthe Natural Gas Supply Assoc., warned against a reduction inregulatory oversight.

CMS Energy Corp. changed the name of its oil and gas explorationand production business to CMS Oil and Gas Co. “Last year we movedto our headquarters in Houston, TX, and the original focus of ourbusiness has broadened from its origins in northern Michigan toinclude exploration and production projects around the world,” saidBradley W. Fischer, CEO of CMS Oil and Gas Co., formerly known asCMS NOMECO Oil & Gas Co.

The Alliance Pipeline project crossed one of its last remainingregulatory hurdles on Friday when Canada’s National Energy Boardconcluded it is not likely to cause significant adverseenvironmental effects provided 41 environmental recommendations areimplemented.

Sen. Fred Thompson (R-TN) last week lent his support to apipeline-sponsored proposal that would require pipelines seeking toseize private property for projects to notify affected landownersby certified mail at the outset of FERC proceedings, giving them anopportunity to participate more fully in the process.

FERC last week gave conditional approval to a major expansionand upgrade of Jackson Prairie Storage that would add 3.2 Bcf ofworking gas capacity and would boost the firm deliverability rateof the Pacific Northwest storage facility by 300 MMcf/d, both ofwhich would heighten its peak-shaving capabilities.