Revise

Dynegy Inc.’s CEO said Wednesday that the company had reached a “defining point” in its rebuilding process, after securing a new $1.66 billion bank credit financing package that won’t come due until 2005. The new facility replaces existing loans held by subsidiary Dynegy Holding (DHI), which would have matured over the next two months.

The Federal Energy Regulatory Commission Wednesday ordered two Duke Energy gas pipelines to revise the right-of-first-refusal (ROFR) provisions in their tariffs to give firm shippers paying maximum rates the opportunity to review third-party bids for capacity under expiring transportation contracts, even in cases where shippers signal an intention to terminate their contracts.

Its reliance on a company’s capital adequacy to determine credit ratings may work for most, but Standard & Poor’s plans to “refine” its analysis methods for energy marketers and traders because of the “recent developments” within the industry. S&P, which began covering the energy trading sector in 1997, noted that the continued price volatility for both power and natural gas markets, the “bilateral and unregulated nature” of the sector and a “lack of adequate trading infrastructure” all played a part in its decision to revamp its methods.

A proposal by Southern Natural Gas Co. to revise tariff provisions that would, among other things, award transportation requests for 90 days or less without holding an open season, is being protested by Indicated Shippers, which argues that the proposal is “contrary to the scheduling equality goals of (FERC) Order No. 637,” and would grant the company “too much discretion to decide when to hold an open season” for shorter terms.

On a day in which market power issues took center stage at FERC headquarters, the Commission last Tuesday proposed revising all existing market-based rate tariffs and authorizations in order to prohibit anti-competitive behavior or the exercise of market power. In addition, the Federal Energy Regulatory Commission also instituted a proceeding to establish a refund effective date should it find that electric power rates are unjust and unreasonable.

Late in the week, Gov. Gray Davis met with the state legislative leaders who on both sides of the aisle were churning out new proposals for salvaging the state energy operations and keeping Southern California Edison Co. out of bankruptcy court. Consumer advocates and the state’s largest businesses are keeping a wary eye. Speculation is high that generators and the governor are going to have to give something, too.

Transcontinental Gas Pipe Line’s proposal to revise the existingcash-out provisions of its tariff has come under heavy attack fromlarge shippers on its system.

KN Energy said it will take a fourth quarter charge as 1998earnings will fall short of market expectations due to record warmweather during November and most of December, plus a decline innatural gas processing marginsto about 1 cent, and lowertransportation revenues.