Relationship

For the next two to three years, certain oil/natural gas pricing relationships are “likely” to be ongoing themes, energy analyst Stephen Smith noted in his latest monthly report. And, except for extreme cold winter shortfalls, “we don’t expect to see sustained periods when Henry Hub gas prices exceed Gulf Coast distillate prices.”

Sen. Dianne Feinstein (D-CA) has asked the Senate Committee on Governmental Affairs to investigate the possibility of an improper relationship between the energy industry and the Federal Energy Regulatory Commission based on an exchange between FERC Chairman Curtis Hebert and Enron Chairman Ken Lay as reported recently in The New York Times.

Sen. Dianne Feinstein (D-CA) has asked the Senate Committee on Governmental Affairs to investigate the possibility of an improper relationship between the energy industry and the Federal Energy Regulatory Commission based on an exchange between FERC Chairman Curtis Hebert and Enron Chairman Ken Lay as reported in The New York Times.

A Maryland Circuit Court has upheld the state public service commission’s authority to regulate the relationship between utilities and their affiliates. In an order issued last July, the Maryland PSC extended its regulatory reach to cover not only marketing affiliate relationships with the regulated utility, but also those of so-called “non-core” affiliates, such as energy service companies. The order angered gas and electric utilities, who sought to have it overturned.

BP and PricewaterhouseCoopers are expanding their businessprocess outsourcing (BPO) relationship, first begun four years agoin South America, to now include North America. The contractaddition, worth more than $200 million over nine years, willinclude BP’s newly acquired ARCO and Vastar onshore and offshoreU.S. Lower 48 operations.

The substantial energy management outsourcing relationshipbetween New England gas distributor Yankee Gas and energy marketerTransCanada Gas Services continues to grow. After a competitivebidding process, Yankee signed a new one-year contract that allowsTransCanada to manage another large part of Yankee’s gas supply,storage and long-haul pipeline capacity.

The substantial energy management outsourcing relationshipbetween New England gas distributor Yankee Gas and energy marketerTransCanada Gas Services continues to grow. After a competitivebidding process, Yankee signed a new one-year contract that allowsTransCanada to manage another large part of Yankee’s gas supply,storage and long-haul pipeline capacity.

Williams and AES Corp. re-lit the flame of their cozyrelationship yesterday. Williams signed a 20-year agreement withAES to supply gas and market 832 MW of generating capacity andassociated energy and ancillary services from AES’ planned Red Oakpower facility in Sayreville, NJ. Financial terms of the agreementwere not disclosed.

Williams and Utilicorp United continued their prosperousrelationship yesterday as the two companies announced a four-yeargas supply contract between Williams Gas Pipeline-Central and a 600MW power plant in Cass County, MO, that is 50% owned by Utlicorp.No financial terms were disclosed. Williams said gas is expected toflow in time for the testing phase of the plant in the early summerof 2001.