Month

Industry executives who were expecting FERC to act soon on majorpolicy initiatives addressing second generation Order 636 issueswill be sorely disappointed. Commissioner Linda Breathitt saidyesterday she didn’t expect to see any action on the notice ofproposed rulemaking (NOPR) and notice of inquiry (NOI) for possiblyanother six months.

Altra Energy Technologies said it set new records for physicallydelivered natural gas and natural gas swaps for the thirdconsecutive month in a row on Aug. 31. On that day, 146 Bcf ofdelivered gas and 135 Bcf of swaps were traded. The previous highwas 132 Bcf for natural gas and 133 Bcf for swaps. David Hanson,Altra’s vice president of gas marketing said greater liquidity andefficiency in the system played a part in increasing transactionintensity.

Enron Oil & Gas (EOG) closed the share exchange to establishEOG as an independent company yesterday. Under the exchange, which wasannounced last month, Enron Corp. exchanged 62.27 million of its 82.27million shares of EOG common stock for EOG’s China and Indiaoperations (see story July 21). EOG alsocontributed $600 million to an India subsidiary that has beentransferred to Enron. In addition, EOG issued 27 million shares at$22.25 per share and received net proceeds of $578.3 million. Pendingcompletion of another convertible stock offering, Enron’s remaininginterest in the company will be less than 3%. EOG will soon adopt anew name EOG Resources Inc. Forrest E. Hoglund, EOG chairman, whoannounced his planned retirement in Sept. 1998, retired effectiveAug. 15. Mark G. Papa, formerly president and CEO, was electedchairman and CEO. Edmund P. Segner III, formerly vice chairman andchief of staff, was elected president and chief of staff.

Houston Street Exchange said its web-based wholesale powertrading floor, HoustonStreet.com, experienced a successful firstmonth of operations as users bought and sold more than 270,000 MWh.It also said that more than 60% (70 out of 110) of the activewholesale power trading companies in the United States have eitherfully registered to trade power on HoustonStreet.com or are in theregistration process.

Construction is scheduled to begin this month on the PacificNorthwest’s first merchant power plant, a natural gas-fired 500 MWplant in the southern Oregon city of Klamath Falls just north ofthe California border and east of the Cascade Mountains. Commercialstart-up is scheduled for July 2001. The City of Klamath Falls,using $300 million tax-exempt public revenue bonds, will own theplant. PacifiCorp Power Marketing will build, manage, operate andfuel the plant. And PG&E Gas Transmission/NW will transport gasthrough an enlarged portion of its 80-mile, east-to-west MedfordLateral off its main north-to-south interstate pipeline thatcarries Canadian supplies to markets in California as well as thePacific Northwest. The plant is expected to need about 9 MMcf/d forits peak output. The City of Klamath Falls will use half of theplant’s electricity generation to operate municipal facilities, andPacifiCorp will market the remaining power, mostly to surroundingprivate- and public-sector utilities.

Ground was broken this month for development of a $275 million,540 MW natural gas-fired power plant in Arizona by San Jose,CA-based Calpine Corp., and close observers of California electricrestructuring are indicating this plant may be the first of manymore out-of-state plants designed to serve California.

Despite the study by the Mid-America Interconnected Network(MAIN) last month indicating that power supplies in the Midwesthave greatly improved over last year, there are some who aren’tquite ready to write off the possibility of a recurrence of pricespikes for the region this summer.

Columbia Energy has accepted defeat in the three-month battlewith Dominion Resources for a merger with Consolidated Natural Gas.Columbia officially withdrew its $6.7 billion offer late Tuesdayfollowing a sweetened merger bid by Virginia Power parent Dominionset at $6.4 billion and the CNG board’s unanimous approval of arevised agreement with Dominion.

Any traders who decided that since April proved to be a goodmonth for long supply positions, they should continue the strategyfor May may be regretting that decision now. Though there is stillample time for price recovery-and at least one major aggregatorremains very bullish about the May swing market-the earlyaftermarket was headed south to the tune of about a dime or morebelow indexes in weekend deals done Friday.