Payment

Urging retail customers to seek bill payment plans this winter, the Oregon Public Utilities Commission (PUC) Tuesday approved rate hikes for the state’s three principal natural gas distribution utilities, effective Friday (Oct. 1). Increases will range from 7.9% to 20.6%, attributable to the record high prices in the wholesale gas markets, the PUC said.

El Paso Merchant Energy said a final FERC order issued this week paves the way for it to receive a final $70 million payment from a Goldman Sachs subsidiary for East Coast Power LLC, which owns the gas-fired 940 MW Linden cogeneration facility adjacent to Staten Island in Linden, NJ. The total purchase price paid for the plant was $450 million. At closing in October, GS Linden Power Holdings LLC, paid $380 million with the remainder to follow FERC’s approval. El Paso also announced that it agreed to sell its interest in Mohawk River Funding IV to a subsidiary of Bear Stearns for $4.5 million in cash and the assumption of $75 million in debt. El Paso said MRF IV was formed to securitize a long-term power contract with Connecticut Light and Power Co. While the MRF IV debt is non-recourse to El Paso, the company has, nevertheless, included it and other similar debt when calculating its total obligations senior to common stock. The transaction is subject to FERC approval and is expected to close in February 2004.

Key Energy Services has agreed to sell all of its oil and gas properties for $19.7 million. The company expects to use $12.4 million of the proceeds from the sale to pay off its volumetric production payment and to unwind related hedges, resulting in net cash proceeds of $7.3 million. It currently expects to record an after-tax charge of $7.8 million. For the six months ending June 30, the oil and gas properties contributed revenue of $2.9 million and a net loss of $0.5 million. CEO Francis D. John said the company is focused on “developing and enhancing its production services capabilities and will seek to exit those businesses that do not meet these objectives. Our oil and gas operations are not core to our business and, in fact, compete with some of our customers. Therefore, we have elected to exit this business. In addition, the sale of these properties will provide Key with additional cash that will be used for debt reduction and/or expansion of our rental tool operations.” Key is the world’s largest rig-based, onshore well service company and owns 1,492 well service rigs, 2,295 oilfield service vehicles and 76 drilling rigs.

El Paso Corp. said Wednesday a consortium of 50-plus bankers agreed to a one-year extension of the company’s $3 billion revolving credit facility that was due to expire in May 2004.

Following last week’s payment of $75 million in local property taxes, bankrupt Pacific Gas and Electric Co. announced Monday that it had paid $113 million in 2002 franchise fees to 290 cities and counties in which it operates over the northern two-thirds of California.

The newly formed Sempra LNG Corp. plans to acquire Dynegy Inc.’s proposed Hackberry, LA liquefied natural gas (LNG) project for an initial payment of $20 million and additional contingent payments based on development milestones and performance. Pending approvals, commercial operation of the planned 1.5 Bcf/d facility is scheduled for early 2007.

Nicor Services, a subsidiary of Nicor, Inc., introduced a fixed payment plan for retail customers. The Nicor Services Fixed Bill gives customers security by guaranteeing a gas bill amount that remains the same for 12 months — regardless of changes in gas prices or the weather. The way the fixed bill program works is simple. Nicor Services calculates an individual monthly amount for each customer, based on a variety of factors, including the gas usage profile of their home and natural gas market prices. Quotes are good for 24 hours. Once a customer signs up, their monthly fixed bill amount is guaranteed not to change for 12 months. Nicor Services will pay the customer’s monthly utility bill and the customer pays Nicor Services their fixed bill amount. Before the end of a customer’s one-year agreement, a new fixed bill quote is calculated by analyzing the customer’s most recent gas usage profile, and the process starts over from there. Nicor Gas residential customers can receive individual fixed bill quotes and sign up for the program online at www.nicorservices.com or by calling 1 866 FIX-BILL (1 866 349-2455).

California’s financially troubled utilities dodged a bulletearlier this week when the Senate defeated an amendment that wouldhave required them to repay suppliers for all of the power theyreceived as a result of the Department of Energy orders during theDecember-through-February period, even if they go bankrupt.