sale

The fire sale price levels for power generation assets in the U.S. has drawn another set of players into the increasingly crowded field bidding for power plants. Carl Icahn and Panda Energy International last Wednesday said that their affiliated companies have signed a joint venture agreement to co-fund Panda Acquisitions Group, which will actively seek to purchase U.S. energy assets and related infrastructure.

Two Canadian companies will be the 50-50 owners of the Canada-to-U.S. Alliance Pipeline with the sale, announced Thursday, of Duke Energy’s 23.6% interest. Calgary-based Enbridge Inc. and Fort Chicago Energy Partners each will pay Duke an estimated C$203 million (US$137 million) to add an 11.8% interest each in the pipeline. The two also will acquire Duke’s share in the Aux Sable processing facility.

Clobbered by the transfer and sale of various merchant energy assets in the fourth quarter, San Francisco-based PG&E Corp. reported a loss of $874 million, or $2.36/diluted share, for 2002, compared to earnings of $1.099 billion, or $3.02/diluted share, in 2001. The merchant energy unit, PG&E National Energy Group (NEG), booked a $3.4 billion loss in 2002. Without various accounting charges and so-called “headroom” for excess power generation revenues over cost, all lines of business on an operating basis showed a profit, but at lower levels than in 2001.

Williams said Wednesday that it has completed the sale of its interest in the Canadian and United States segments of Alliance Pipeline to Enbridge Inc. and Fort Chicago Energy Partners LP for $173 million in cash. First announced in September, the purchase price represents 1.1 times the book value of the interest (see Daily GPI, Sept. 24).

With an initial investigation of several special purpose entities (SPEs) used by Enron Corp. completed, the court-appointed examiner now will carefully scrutinize “a number of significant questions” about the complex off-balance-sheet transactions, including what role they played in the company’s collapse, whether they were illegally used to manipulate financial statements, and if the SPEs were illegal, whether the officers, directors or professionals involved may be liable.

With an initial investigation of several special purpose entities (SPEs) used by Enron Corp. completed, the court-appointed examiner now will carefully scrutinize “a number of significant questions” about the complex off-balance-sheet transactions, including what role they played in the company’s collapse, whether they were illegally used to manipulate financial statements, and if the SPEs were illegal, whether the officers, directors or professionals involved may be liable.

As several competitors struggled for their very survival last week, Duke Energy reported earnings rose to 57 cents per share in the second quarter from 54 cents a share a year ago, due to hefty profits in the company’s gas pipeline business, which it said offset lower results for its sagging merchant energy business. Wall Street responded favorably to the news, with Duke Energy stock gaining about 27% in value for the week to trade at $22.45 a share late Friday.

The sale of natural gas in Nova Scotia will remain open to competition. However, now the distributor will be allowed to sell natural gas directly during a seven-year development period — and others may market natural gas as well. Also, large industrial users will be able to connect directly with an offshore supply of gas before it goes into the Maritimes and Northeast pipeline.

The United States Bankruptcy Court in New York has approved the sale of two of Enron North America’s gas purchase agreements to Occidental Energy Marketing, Inc. (Oxy), which will assume responsibility for supply agreements with Peoples Energy utility subsidiaries The Peoples Gas Light and Coke Co. and North Shore Gas effective April 1.