Report

Interstate pipelines last week unveiled a “global” proposal onseasonal ratemaking and flexible terms and conditions of service atthe fourth industry pow-wow exploring major FERC gas initiativesand possible alternatives. Seasonal ratemaking, which would enablepipes and LDCs to recover more value for capacity when it’s ingreatest demand, is emerging as the industry’s front-runnerreplacement for the Commission’s much-criticized auction mechanism.

While Congress continues its unending debate over repeal of thePublic Utility Holding Company Act (PUHCA), the Securities andExchange Commission (SEC) just about did the deed last week with anorder allowing a subsidiary of the California-based Sempra Energyto have controlling interest in a North Carolina partnership thatwill construct, own and operate a gas utility distribution systemin North Carolina. (Rel. 35-26971)

The only non-affiliated shipper that has signed up for firmtransportation service on the Maritimes &amp Northeast Pipelineproject clearly is regretting it now. Boston Gas told FERC lastweek a request by Maritimes in January to amend its pipelinecertificate, eliminate about 140 miles of laterals in Maine andraise its mainline rates 61% because of the loss of numerous U.S.markets shows a lapse in rationality.

Sempra Energy has signed a comprehensive multi-million-dollar,five-year deal with Lockheed Martin Corp. to be its exclusiveenergy provider in 26 eastern states. Lockheed Martin expects tofinalize a similar deal for its western facilities with Enron sometime in March, according to Lockheed Martin energy manager SamJohnson.

Investigators believe a recent line break on the NOVA GasTransmission Ltd. (NGTL) system was caused by stress corrosioncracking (SCC). The line break occurred Feb. 7 about 18 miles northof Highway 11 and 45 miles southwest of Drayton Valley. There wereno injuries. The pipeline involved in the line break wasconstructed in 1980. “We will take the data and evidence wegathered at the site and prepare a more detailed analysis toconfirm our preliminary assessment,” said John Walker, vicepresident plant maintenance.

Reliant Energy improved its West Coast portfolio last week byannouncing a six-year agreement with the Springfield, IL municipalutility City Water, Light and Power (CWLP) to market its total 600MW generation. Financial terms of the deal were not disclosed.

On the heels of a decision showing that Canadian landowners canforce changes, the National Energy Board has called hearings on 38objections to the route of Alliance Pipeline Project.

Florida-based FPL Energy Inc. said it will build, own andoperate a 1,000 MW, gas-fired power plant in Paris, TX, that willbe one of the largest independent generation projects in the state.Electricity generated at the site, about 100 miles northeast ofDallas, will be sold primarily in the Texas wholesale market. Threefirms, Texas Utilities Electric Co., Texas-New Mexico Power, andConstellation Power Source, have contracts to buy 700 MW of theplant’s output for various periods. Construction of thecombined-cycle plant is to begin immediately. Commercial operationis scheduled for mid-2000. The maximum daily quantity of gas thatwould consumed by the plant is 170,000 Dth/d.

Carolina Power &amp Light announced it is considering sites inRichmond and Rowan counties, NC, for new natural gas-fired electricgeneration to be operational in 2001 and 2002. CP&ampL plans tobuild up to seven combustion turbine units totaling about 1,100 MWto be operational by June 2001 and may build additional units to bein service in June 2002. The projects are part of CP&ampL’spreviously announced generation expansion of about 4,000 MW, or40%, by 2007. Each combustion turbine unit represents a capitalinvestment of about $40 million. Construction is scheduled to beginby the end of 1999. CP&ampL also is building additional peakinggeneration at two existing plant sites-in Wayne and Buncombecounties-and has broken ground on a 160 MW gas-fired peaking plantin Monroe, GA. Natural gas to fuel a plant in Richmond County wouldcome through North Carolina Natural’s (NCNG) pipeline andTranscontinental Gas. Last November, CP&ampL announced its plan toacquire NCNG and to make it a wholly owned subsidiary. CP&ampLanticipates receiving regulatory approval for the acquisition bymid-1999.