Recent

Following a 4-day, 20-cent price rally, bulls in the natural gaspit cooled their heels yesterday as traders took profits amid ahost of negative short-term technical factors. After peaking forthe day shortly after 11:00 A.M. (CST) at $3.165, selling hit themarket in two distinct waves. It was the second thrust that pushedMay below key support at $3.10 to settle at $3.098, down 6 centsfor the session.

With little in the way of technical or fundamental news, naturalgas futures were held to an extremely-tight, 4-cent range in quiettrade yesterday. By finishing at $2.949, the May contract was just0.1 cents below its opening price and 2.2 cents lower for the day.Estimated volume was thin, with only 31,720 contracts changinghands.

The recent Oscar winners have nothing on San Francisco’svenerable Gran Dame of combination energy utilities, Pacific Gasand Electric Co., whose film career and notoriety seem destined towin increasing Hollywood scrutiny if not gold statuettes.

Although FERC’s recent effort to clarify its interconnectionpolicy was a “major step” in the right direction, the ElectricPower Supply Association (EPSA) said greater reforms are needed toprotect new generators seeking to interconnect to the power grid.It has asked the Commission to issue a policy statement that would”comprehensively” spell out “the rights, obligations andexpectations” of interconnecting generators and providers ofinterconnection/transmission services.

Although a recent rate case settlement allowed PG&E to raiseits distribution rates, the hike will not translate into higherbills for customers. The utility said its revised gas tarifffiling, which the California Public Utilities Commission yesterday,will actually reduce overall residential gas rates by 3.1%.

The somewhat surprising recent firmness of swing prices held uponce again in most cases Friday, refusing to yield to either thenormal drop in weekend demand or a continuing dearth of fundamentalweather support.

DPL Inc. announced it has sold its financial interest in MarketHub Partners (MHP) to a subsidiary of NiSource for $29 million incash. This sale follows DPL’s recent announcement of the sale ofits natural gas retail distribution business to Indiana Energy. MHPis a natural gas storage company headquartered in Houston. DPL wasrequired to separate its electric business units with the Julypassage of Ohio electric restructuring legislation. In so doing,the company said it was going to explore options for its gasbusinesses while focusing on electric generation. DPL said it hascontinued to expand its natural gas-fired generation business withthe addition of 475 MW through two plans called “Phases One” and”Two.” Two more phases, which have yet to be announced, willincrease that capacity by 320 MW. These expansions are occurring inboth Ohio and Indiana, DPL said, and will be immediately accretiveto earnings as these units come online starting in the summer of2000.

The Virginia Corporation Commission (SCC) has given finalapproval to the merger of Dominion Resources Inc. (DRI) andConsolidated Natural Gas Co. CNG). The SCC said it is satisfied therecent approval of the merger by the Securities and ExchangeCommission (SEC) is not inconsistent with the Virginia commission’sprevious orders. The SCC reserved the opportunity to review the SECorder to ensure that Virginia’s ability to safeguard Virginiaratepayers was maintained. The merger means the control of VirginiaNatural Gas (VNG), a subsidiary of CNG, will transfer to DRI, theparent company of Virginia Power.

Natural gas traders were greeted yesterday morning by somethingseldom seen in recent years – a serious blast of below normaltemperatures in the key gas-consuming Northeast U.S. But evensub-freezing temperatures and gale force winds, which are expectedfor much of the eastern seaboard today, were not enough to overcomethe deleterious effects of forecasts calling for a quick return toabove-normal temperatures by the weekend. After an early buyingsurge failed to punch through $2.42, the January contract cameunder a heavy wave of selling that propelled prices lower to finishat $2.304, a 4.8-cent decline for the day.