Reserved

In a move to build up the natural gas side of its business andbecome a Btu trading power, American Electric Power subsidiary AEPResources agreed to buy the midstream gas operations of EquitableResources, principally the Louisiana Intrastate Gas (LIG) system,for $320 million in cash. The addition will be AEP’s firstmidstream gas holdings.

The power price spike to $7,000 MWh this past June in theMidwest was not out of line with the cost of running little-usedpeaking generators, according to a leading marketer, and from aregulatory viewpoint the key lesson was that residential customersdid not have to pay those prices.

As industry replies to FERC’s data requests on the June pricespikes in the power market began to pour in yesterday, critics insome electricity circles said that the questions posed by theCommission were too little, too late to elicit any meaningfulinformation into the causes for the price run-up earlier thissummer in the Midwest.

The U.S. Justice Department has kicked off an investigation intoutility-owned ProLiance Energy LLC for possible antitrustviolations in the Midwest pipeline capacity market. The outcome ofthe probe, as well as a decision by an Indiana appellate court onrelated issues, may have ramifications for other utility-ownedmarketers, sources close to the case say.

Southern California Gas will hold a one-day auction Sept. 1 tosell its exclusive rights to buy 370 miles of large-diametertransmission pipeline and related facilities currently transporting1.1 Bcf/d of supplies from Rocky Mountain and Southwest supplysources. The winning bid(s) will be announced Sept. 16, SoCalGasofficials said this week. A previously announced June8-through-mid-July auction was canceled because of state regulatorydelays, they said. Both the auction and results will be accessiblethrough the large gas-only distribution utility’s on-line GasSelectservice and company website on the Internet(www.socalgas.com/3rdparty/kern).

Duke Energy Power Services and the Utility Commission of theCity of New Smyrna Beach in Florida filed plans with the FloridaPublic Service Commission (FPSC) to build and operate a 500 MWgas-fired merchant power plant in the city. In attempting to buildthe first merchant power plant in the state, Duke will be runningthe gauntlet of opposition from entrenched utilities.

The Gulf Coast from Brownsville, TX, to Spring Hill, FL, hasbeen hit by 34 intense hurricanes this century, and there’s a highprobability one could make an unwelcome visit in 1998. In his firstlook at hurricane landfall probabilities, esteemed hurricaneforecaster William Gray of Colorado State University said the GulfCoast region is 14% more likely to suffer through an intensehurricane (category 3, 4, or 5) and 16% more likely to be hit by alower level cyclone this year than the average landfall probabilityover the past 98 years.

and Marketing Fair Issues Call for Papers

Prosper Business Development Corp., along with Energy.com Corp.,has launched the energy industry’s first cooperative marketingcampaign aimed at eliminating the confusion about gas retail choiceat the small commercial and residential level, and at making itaffordable for gas marketing companies to target these two customerclasses.