Pacific Gas and Electric started its second auction of electricgenerating plants in Northern California, placing four gas-firedpower plants and the company’s geothermal facilities on the blockthis week. The auctions are in support of California’s move towardfull competition in the energy utility industry.
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Articles from Pacific
UPR Examining Possible Midstream Asset Sale
Union Pacific Resource has reiterated its intention to examine apossible sale of its gas gathering and processing business orselected non-core assets as part of a “deleveraging” programfollowing its recent $3.5 billion purchase (including assumption ofdebt) of Norcen Energy. At the time of the Norcen deal, UPR said itintended to sell $500-$700 million in assets to cut its debt toequity ratio, which ballooned to 73% following the Norcen deal fromabout 40%. But the company has valued its midstream assets, whichare located in Texas, Louisiana, Wyoming and Colorado, at about $2billion. The assets produced about $150 million in pretax operatingincome in 1997. The company has 25 operating plants and relatedpipeline facilities. A UPR spokesman said the company is justbeginning to evaluate its options but noted the market formidstream assets has been hot. UPR’s announcement follows similarplans announced recently by Aquila Gas Pipeline and EquitableResources. “These assets have been selling at a much higher cashflow multiple than E&P assets.”
$6.6 Billion PE, Enova Merger Passes CPUC Review
California regulators have approved the $6.6 billion merger ofPacific Enterprises and Enova Corp., allowing the formation of acompany that will serve 21 million gas and electric consumers inSouthern California. But the merger partners did not get all theyrequested. The CPUC ruled merger savings of $174.9 million must bereturned to ratepayers and savings of $161.5 million returned toshareholders over the five years following completion of the mergerrather than over 10 years
Some Discord on PG&E’s Gas Accord
The first bidweek under Pacific Gas & Electric’s Gas Accordtransportation framework was a rough ride for many doing businessin the drastically changed northern California market. WhilePG&E went ahead with its massive computer system upgrade onschedule, few shippers were prepared to handle it.
CPUC Judge Recommends Approval of PE-Enova Merger
A California Public Utility Commission administrative law judgehas recommended approval of the proposed Pacific Enterprises-EnovaCorp. merger, citing potential savings of $288 million spread overfive years and divided equally between ratepayers and shareholders.
Enova-PE Merger Set to Cross Critical Junctur
An important juncture in the proposed $5 billion merger ofPacific Enterprises and Enova Corp. is expected this week when anadministrative law judge with the California Public UtilitiesCommission recommends a proposed decision to the five-memberregulatory body. The CPUC is then expected to act by the end ofMarch. No one is expecting the proposed decision or the ultimatefinal one by the state to turn down the marriage of the holdingcompanies for Southern California Gas Co. and San Diego Gas andElectric Co., but it is unclear whether the conditions placed onthe deal will make it financially unattractive for one or both ofthe companies
PG&E, California Producers Negotiate Gathering Sale
In a deal that could be the first of its kind in the nation,Pacific Gas and Electric is locked in serious negotiations withnorthern California natural gas producers to sell them itsextensive utility gas gathering system linked to in-state wells,most of which are in the dry gas fields of the greater SacramentoValley. The deal being sought, which is expected to take the betterpart of 1998 to gain final regulatory approvals, is an offshoot ofthe omnibus Gas Accord unbundled intrastate transmission andstorage services that start March 1. The parties will not put adollar value on the facilities involved in the negotiations, but itis conservatively estimated at tens-if not hundreds-of millions ofdollars, involving hundreds of miles of low- and medium-pressurepipelines and related gathering facilities linked to more than 100producers.