Reached

The battle over who will get to build new pipeline capacity tothe prized Northeast gas market has reached a feverish pitch, withsponsors dreaming up ways to knock out their competitors’ projects.ANR Pipeline and National Fuel Gas Supply Corp., sponsors of theproposed Independence Pipeline, recently proposed a plan that couldwipe out a large part of Columbia Gas Transmission’s MillenniumPipeline project. And Texas Eastern Transmission (Tetco) has joinedthe ranks, devising a proposal that could obviate the need forIndependence altogether and part of an associated project.

American Electric Power and Central and South West Corp. reacheda settlement with FERC trial staff that resolves the market powerand rate issues relating to the pending merger of the twocompanies. Under terms of the settlement, AEP would transfer theoperation and control of its bulk transmission facilities locatedin Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and WestVirginia to a regional transmission organization (RTO). Thesettlement also covers rates for transmission services andancillary services and confirms, subject to FERC guidance oncertain elements, that the previously announced generationdivestiture program will satisfy the market power concerns of theFERC staff. Once the merger is completed, the new company will beserve 4.7 million electric customers in 11 states.

Oklahoma Corporation Commission (OCC) staff, ONEOK Inc. and itssubsidiaries Oklahoma Natural Gas (ONG) and Kansas Gas Service(KGS) reached negotiated settlement of a number of interim issueson rates, unbundling of assets and competitive bidding for gasservices. The stipulated agreement must still be approved by OCCcommissioners. Once that happens, it will hasten wholesale and thenretail unbundling in the state.

Oklahoma Corporation Commission (OCC) staff, ONEOK Inc. and itssubsidiaries Oklahoma Natural Gas (ONG) and Kansas Gas Service(KGS) reached negotiated settlement of a number of interim issueson rates, unbundling of assets and competitive bidding for gasservices. The stipulated agreement must still be approved by OCCcommissioners. Once that happens, it will hasten wholesale and thenretail unbundling in the state.

Western Resources of Topeka, KS, said a stipulation andagreement had been reached with the Kansas Corporation Commission(KCC) staff, resulting in a proposed set of recommendations forsettlement in the company’s merger with Kansas City Power &Light. The agreement has been filed with the KCC. The City ofTopeka has agreed to, and the International Brotherhood ofElectrical Workers local 304 support the recommendations andstipulations. They include:

BP Amoco and the Williams Cos. announced last week they have reached a partial settlement with the Southern Ute Indian Tribe, while leaving the key issues of their dispute to be determined in an upcoming Supreme Court case. The settlement released Williams and BP Amoco from all claims included in the Southern Utes’ lawsuit against them but did not address key ownership issues.

Nipsco Industries reached the brink of gaining a valuable eastcoast influence Thursday as the SEC approved a merger betweenNipsco and Massachusetts-based Bay State Gas Co. The $780 millionmerger was originally announced in December of 1997. Both sides arereviewing final documentation and no other regulatory matters arepending. Nipsco expects the deal to close today.

Potomac Electric Power Co. (Pepco) earlier this week reached amajor settlement to auction off its power generation assets andflow back much of the profits to Maryland customers as part of itsplan to begin offering customer choice beginning July 2000.

Atlanta Gas Light Co. (AGL) reached an agreement with theGeorgia Public Service Commission (GPSC) last week to return to itspre-deregulation billing methods, avoiding a Feb. 3 Commissionhearing intended to charge the utility with disregarding marketconstraints in its rate-charging practices. The utility alsoagreed to refund $14.5 million to overcharged customers. Thereformed bills and the refunds will be sent out in February.