News

Reliant Energy, formerly Houston Industries, expanded itsMidwest retail gas marketing business with the acquisition ofcertain assets of National Energy Management LLC and Koch MidstreamServices Co.’s Chicago operation. Together, these retail marketingbusinesses serve more than 2,200 accounts in the Chicago andsouthern Wisconsin areas and have annual revenues exceeding $65million.

Thunder Creek Gas Services LLC, a joint venture of Devon EnergyCorp. and KN Energy, has begun construction of a 126-mile gasgathering system in the Powder River Basin of northeast Wyoming.The system is expected to be operational by fall at a total cost ofabout $100 million.

The fate of the Millennium, Independence, SupplyLink andMarketLink pipeline expansion projects, which together representabout 1.7 Bcf/d of new pipeline capacity directed at northeasternmarkets from the Midwest, have been scheduled for discussion onlyat FERC’s next regular meeting March 10. That move has sparked aconsiderable degree of speculation among FERC observers andpipeline representatives.

NIPSCO Industries is changing its name to NiSource Inc.(pronounced Nye-source), in an attempt to signal a new directionfor the company as a multi-state supplier of energy and waterresources and related services. The company’s logo will remain thesame, continuing to incorporate beams bursting from a point oflight.

Salomon Smith Barney (SSB) said it is expecting a decline of 400MMcf/d in gas production during the first quarter of this yearcompared to the same period last year and a drop of about 1 Bcf/dby the second half of the year because of the sharp decline indrilling activity. SSB is forecasting gas production in 1999 willbe down 1 Bcf/d compared to last year.

A top FERC official dismissed any hint the Commission wasdragging its feet on key pipeline projects that would ship naturalgas to the Northeast – namely the proposed Millennium, SupplyLink,MarketLink and Independence lines. “…[W]e love new pipelines,”said Richard O’Neill, director of the Office of Economic Policy,”but we don’t want these new pipelines to turn into strandedcosts.” Also, he cited environmental concerns.

Implementation of a mandatory capacity auction, as proposed byFERC in its mega-notice of proposed rulemaking (NOPR), couldjeopardize the opportunity for natural gas to gain a greater shareof the prized electricity market in the future.

Despite three of Atlanta Gas Light’s nine gas customer poolssurpassing the Georgia Public Service Commission’s (GPSC)requirements to become fully competitive, the GPSC is uncertainabout moving forward with the customer assignment process becauseof planned legislation that would declare Atlanta Gas Light’s (AGL)entire service territory competitive possibly as early as thisfall.

Retail gas unbundling in California is “currently beingundermined” by Dynegy Marketing and Trade’s withholding of asignificant portion of firm transportation capacity on El PasoNatural Gas from the market, the head of the California PublicUtilities Commission (CPUC) said last week. As a remedy, CPUCPresident Richard A. Bilas called on FERC to implement regulationsprohibiting the “hoarding” of pipeline capacity and to investigateallegations of anticompetitive conduct, which he contends wasevident in the Dynegy-El Paso arrangement.