Retail

Due to a revenue recognition issue at its SouthStar retail marketing joint venture, AGL Resources Inc. reported that it is revising its earnings guidance for fiscal year 2001 to between $1.49 and $1.51 per share, from the current First Call consensus of $1.55 per share. SouthStar is a partnership among AGL Resources, Piedmont Natural Gas and Dynegy Inc.

A significant number of customers who have entered into an electric retail open access (ROA) enrollment process sponsored by Consumers Energy Co. are holding back on taking the next step for open access service, according to a recent investigation done by staff at the Michigan Public Service Commission (PSC). Although PSC staff did not find a direct correlation between the low participation rates and problems with Consumers’ enrollment process, it voiced concerns over whether the company will be able to handle a much larger anticipated volume of customers once full electric open access kicks in at the start of next year in Michigan.

The NewPower Co., a subsidiary of NewPower Holdings Inc., signed a definitive agreement to acquire the customers and related assets of AES Power Direct, a retail marketing subsidiary of AES Corp. The company has also signed a definitive agreement to purchase the customers and natural gas inventory related to the Columbia Gas of Ohio and Dominion East Ohio gas customer choice programs of CoEnergy Trading Co. CoEnergy is a subsidiary of DTE Energy Co. Together, the deals significantly expand NewPower’s presence in Ohio, where the company will add over 82,000 natural gas and electric customers, and in Pennsylvania, where NewPower will add approximately 38,000 natural gas customers. The deal also marks NewPower’s entrance into the service territories of four additional utilities: Dominion Peoples, Dominion East Ohio, Toledo Edison and Ohio Edison. NewPower is also entering the gas market for Cincinnati Gas & Electric. As part of the AES Power Direct transaction, NewPower will acquire related natural gas inventory, supply and transportation contracts and infrastructure, including billing and customer service, in Peoria, IL, and Toronto, ON. NewPower will acquire from AES Power Direct and CoEnergy a total of approximately 112,000 natural gas customers in the service territories of Columbia Gas of Pennsylvania, Columbia Gas of Ohio, Dominion Peoples, Cincinnati Gas & Electric, Dominion East Ohio, and Washington Gas Light customers in Virginia and Maryland. In addition, NewPower will add approximately 7,000 AES Power Direct electric customers in the Toledo Edison and Ohio Edison markets.

Amid a buzz about higher retail rates and the need to conserve to cut down on summer’s looming blackouts, California Gov. Gray Davis Wednesday signed a new law (SB 6X) creating the “California Consumer Power and Conservation Financing Authority,” which will have broad powers to construct, own and operate electric generation and power facilities and finance energy conservation programs. The law becomes effective in 90 days.

The bankruptcy of Pacific Gas & Electric Co. may stand as a large roadblock in the state’s plan to make wholesale changes to the electric industry, particularly buying up all existing transmission, but the governor last week seemed determined to persevere. The signing of a landmark “memorandum of understanding” (MOU) between the state of California and Southern California Edison last week, the beginning of talks with San Diego Gas and Electric Co. and verbal olive branches to PG&E reflect the governor’s resolve to dig the state out of hole it finds itself in. He hopes to reach an agreement with SDG&E before the end of this month.

California Gov. Gray Davis “delivered” on his plan to buy outthe transmission systems of the financially-troubled investor-ownedutilities in the state Friday, outlining the framework of a deal,but with no dollar signs attached and no on-the-record agreementswith the utilities.

Columbia Gas of Ohio has dropped two marketers from its retail choice program in the last three weeks after the marketers failed to deliver gas into Columbia’s system to serve their customers. The defaults are the latest of several small marketers across the country to succumb to the volatility and high prices in the natural gas market. The current market “is accelerating the evolution of the marketplace,” said Columbia spokesman Steve Jablonski. “We’re seeing a shake-out in one winter that otherwise might have taken years.” Columbia has continued to deliver gas to customers of the marketers, Summit Natural Gas and Power Solutions and Nicole Energy Services. The customers will now go back on tariff rates. One other Ohio marketer has dropped out since the program started. Energy Max was terminated last Aug. 30. “We tried to work with all three,” Jablonski said, but were unsuccessful. Columbia’s Ohio choice program currently has 14 marketers and about 500,000 customers, out of 1.3 million Columbia customers. Nicole had about 300 mostly small commercial customers and Summit had 3,800. Columbia of Ohio’s current tariff rates are $7.30 an Mcf. The company has made a gas cost recovery filing to raise the rate to $8.60 in February.

Columbia Gas of Ohio has dropped two marketers from its retailchoice program in the last three weeks after the marketers failedto deliver gas into Columbia’s system to serve their customers. Thedefaults are the latest of several small marketers across thecountry to succumb to the volatility and high prices in the naturalgas market.

New York Assemblyman Robin L. Schimminger is trying to convincethe state to open an investigation into the bankruptcy of IroquoisEnergy Management LLC, which left approximately 19,000 residentialnatural gas customers with an estimated $1.8 million out-of-pocketloss due to non-refunded pre-payments.