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Construction of a new 710 MW gas-fired cogeneration plant toreplace a 75-year old coal-fired powerhouse supplying Ford MotorCompany’s massive Rouge complex and Rouge Steel Co. in Dearborn,MI, is going into overdrive following a boiler explosion lastTuesday that killed one person, critically injured a dozen othersand destroyed the power plant.

Eastern markets maintained the week’s general pattern of flatpricing Friday, even eking out small increases here and there. TheWest tended to be a little softer due to the usual weekend fall-offin demand, but the declines there were fairly minuscule at no morethan 1-4 cents down in nearly every case.

The Chicago Mercantile Exchange announced Thursday it has filedfor regulatory approval to offer exchange-traded, heating degreeday (HDD) and cooling degree day (CDD) futures and optionscontracts. The CME said these indexes will help companies manageweather-related financial risks. A start date will be set afterCommodity Futures Trading Commission (CFTC) approval.

While the March Nymex futures contract began Friday’s tradingsession on yet another up-note, a late sell-off brought it backdown to settle 2.9 cents lower on the day. The spot month went upas high $1.875, where it flirted with crossing over the 40-daymoving average, only to finish the day at $1.80.

Cinergy Corp. has moved to integrate its purchase of ProducersEnergy Marketing, LLC (ProEnergy) with its own commodity marketingoperation, cutting some ProEnergy executives and planning theintegration of its smaller Houston office into the larger ProEnergyfacilities in Houston.

Volume growth in the power marketing business dwarfed that ofgas with some marketers posting year-to-year increases of more than1,000% and gains of more than 100% not unusual. Total sales volumesfor the year for the top-20 gas marketers rose 17%, or 17 Bcf/d, to117 Bcf/d, whereas for the power marketers volumes soared 103%, or935.81 million MWh, to 1,841.44 million MWh. Such leaps are notsurprising considering power marketing is a less mature businessthan gas and targets a much larger market. (See table, page 4)

The recently joined Altra Energy Technologies and QuickTrade LLCposted record gas trading volumes Jan. 28 when their combinedtrading systems reached 30 Bcf in deals. Previous record volumesfor the stand-alone companies when combined were less than 30 Bcf,said Altra Chairman Rusty Braziel

Despite bullish prospects two years ago with the advent ofderegulated energy markets, California independent gas producers atthe start of 1999 are still struggling against depressed prices,slow developing electric and gas restructurings and a hard core ofthree major investor-owned utilities that have proven to beformidable competitors. One independent producer, Tri-Valley Corp.,in Bakersfield still expects to ride out continuing years of redink until real gas/electric competition and increased oil/gasprices eventually make current projects profitable in the long run.

Columbia Energy Chairman Oliver G. “Rick” Richard III saysproposals espousing seasonal ratemaking and negotiated terms andconditions are the most important of the many reform initiativespending before FERC, and deserve priority. Obtaining regulatoryapproval for both will be a “key initiative” of pipelines thisyear.