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The D.C. Circuit Court of Appeals last week upheld two orders inwhich FERC denied a small-customer discount transportation rate toNephi, UT, a municipal distribution customer on Questar Pipeline.

As of last Friday, 35 days away from the Federal EnergyRegulatory Commission’s August recess and counting….there wasstill no official sign of its promised plan to cure the gas marketof its ills. But rumors abounded that the alleged “gas options”paper has been circulated to pipelines and producers and isundergoing a variety of alterations. There also was one report thatthe plan might not, after all, see daylight until after the recess.

The $6.2 billion merger of Enova Corp. and Pacific Enterprisesfinally became official last week following approval of theSecurities and Exchange Commission. The merger creates SempraEnergy, a new San Diego-based Fortune 500 energy services holdingcompany with 12,000 employees, $10 billion in assets and thelargest regulated utility customer base in the nation.

FERC last week gave New York utilities a conditional go-ahead tocreate the New York Independent System Operator (NYISO), making itthe fourth ISO that the Commission has approved so far.

In a dramatic step toward the development of a whole new way ofgenerating electricity, Plug Power demonstrated last week the firstresidential fuel cell to successfully power a home.

The Maritimes & Northeast Pipeline project last week crossedanother major milestone on its way toward bringing gas toNortheastern markets from Atlantic Canada for the first time inNovember 1999. FERC issued a final environmental impact statementon the 200-mile U.S. upstream portion of the system, concluding itwould have limited adverse environmental impact with therecommended mitigation.

The futures market continued to receive strong technicalfollow-through buying on Monday, adding to gains posted last weekthat some analysts feel could be signaling the end to the two-monthdowntrend in natural gas prices.

FERC last week denied a complaint in which KN WattenbergTransmission LLC accused a western LDC and pipeline affiliates ofimproperly bifurcating their pipeline projects to sidestepCommission jurisdiction.

Following an extensive four-month, $700,000 review of FERC’sprocedures and organization by staff and Andersen Consulting, theCommission yesterday formally announced its changes in structureand regulatory approach. The initiative, which includes creatingseveral new offices, efforts to increase pre-filing activities andnew regulatory approaches designed to speed up processing ofapplications, will be made effective over the next 18 months.