Rated

A-credit-rated Southern California Public Power Authority (SCPPA) said it has completed a $65.1 million purchase of 67 Bcf of Barnett Shale reserves for five California public sector utilities. The majority of the gas will fuel the new 300 MW Magnolia power project in Burbank, CA, as well as other local power plants.

With two A-rated major California utilities and a long list of large natural gas supply and delivery projects, San Diego-based Sempra Energy carries the expectation of “consistent and predictable” financial performance in the months and years ahead, according to an analysis affirming its overall credit ratings and “stable” outlook by Standard & Poor’s Ratings Services, which was released Thursday. S&P San Francisco-based analyst Swami Venkataraman completed the analysis. The utilities provide stability to balance Sempra’s large energy trading and other unregulated businesses, S&P said. S&P gives Sempra an overall “BBB+” corporate credit rating and “A” ratings for Southern California Gas Co. and San Diego Gas and Electric Co. All individual debt issue ratings in the Sempra Energy family of companies were affirmed, too, S&P said. Cash flow and debt coverage ratios that have been dampened in recent years during the developmental phases of several major liquefied natural gas (LNG) and interstate gas pipeline projects are expected to begin improving significantly in 2008 when some of the projects begin coming on line, S&P’s Venkataraman said. “We expect consistent and predictable financial performance at the utilities and Sempra Generation, Venkataraman said. “Consolidated cash flow coverage ratios are expected to be somewhat weak for the rating in 2006 and 2007, given that Sempra is investing substantial sums in its LNG and pipeline[storage] businesses in these years without any cash flows. However, ratios are expected to improve significantly from 2008 once LNG and pipeline cash flows commence.”

With two A-rated major California utilities and a long list of large natural gas supply and delivery projects, San Diego-based Sempra Energy carries the expectation of “consistent and predictable” financial performance in the months and years ahead, according to an analysis affirming its overall credit ratings and “stable” outlook by Standard & Poor’s Ratings Services, which was released Thursday. S&P San Francisco-based analyst Swami Venkataraman completed the analysis.

An increased reliance on natural gas-fired generation by A-credit-rated Silicon Valley Power (SVP) caused Fitch Ratings Wednesday to lower from “positive” to “stable” the outlook for the City of Santa Clara, CA-run electric utility. Fitch affirmed the “A” credit rating on $235 million of outstanding subordinate electric revenue bonds.

El Paso Corp. has formalized an agreement with officials in California, Washington, Oregon and Nevada to resolve the principal litigation and claims following the western power crisis two years ago. The formal settlement, announced on Thursday, was proposed in March (see NGI, March 24). On Friday, the participants took the final procedural step as well, which was required to ensure the settlement is completed.

The Williams Cos. Inc.’s consolidated credit measures have”deteriorated” due to an aggressive capital investment program,ever-widening losses from its communications business and weakenergy prices throughout 1998 and earlier this year, but Fitch IBCAnevertheless gave the company a credit rating of ‘BBB’ basedlargely on the stability of its interstate gas pipelines and thegrowth potential of its diversified energy businesses.

Thursday night’s Access gains, and higher prices in both theover-the-counter and cash market set the stage for the May futurescontract to blast off Friday. In fact, the buzz around the pit atNymex early Friday centered on when, not if, the prompt month wouldfill in the chart gap up to $2.19. But despite all the hoopla andbullish sentiment, the May contract could manage only a half-pennygain from its $2.16 open, leaving the market to trend lowerthroughout the rest of the day. May finished 1.3 cents lower at$2.124.