Sales

Last week’s announcement by Montana Power that it is getting outof the energy utility business may be the start of a new push toseparate electric transmission and distribution, with an increasein merchant transmission proposals, spurred by both shareholdersand regulators of the utilities, according to one of the nation’sfirst merchant power transmission companies. U.S. electrictransmission systems collectively represent a $70 to $90 billionset of assets.

Sithe Energies Inc. and Cabot LNG Corp., a wholly ownedsubsidiary of Cabot Corp., made a 20-year gas sales and purchaseagreement valued at more than $4 billion. Cabot LNG subsidiaryDistrigas of Massachusetts will be the principal supplier of gas tofuel Sithe’s Mystic Station, a 1,600-megawatt generating plant inEverett, MA.

Faced with the possibility of loosing its electric marketinglicense in New Jersey because of seedy marketing maneuvers,Sempra’s Energy America cut a deal with the state’s Board of PublicUtilities last week, agreeing to halt its marketing efforts for athree-week span, retrain its agents and stop all “unconscionablemarketing tactics.”

Tengasco Inc. of Knoxville, TN, is now selling gas from its SwanCreek gas field in eastern Tennessee. “We have signed an amendedagreement with Hawkins County Utility District in Rogersville, TN,to sell natural gas for industrial and residential customers,” saidMike Ratliff, Tengasco CEO.

Much like the rest of the majors, Phillips Petroleum is back ontrack in terms of strong financial results with $221 million in netincome in the third quarter, up from $46 million for the sameperiod last year. But CEO Jim Mulva said the sale of its midstreamGPM business, and possible “joint venturing” of its chemicals,refining and marketing operations are still on. The GPM sale isexpected to take place before the end of the year.

TransCanada CEO Doug Baldwin let investors know that this yearis just the beginning of the cost-cutting and asset shuffling atthe company. He said to expect $3 billion of the company’s $26billion in assets to be put on the auction block by the end of2001. That includes those assets that have been or will be soldthis year: Angus Chemical, which was bought by Dow Chemical in thethird quarter; the prior transfer of ownership in Northern Borderto TC Pipelines LP; and the company’s liquids marketing business,which is expected to be sold in the fourth quarter. He warned thereis still a lot of underperforming fat to be trimmed, and anotherso-far-unannounced collection of assets could go in the fourthquarter.

Despite a plea from Nevada regulators to postpone action, theFederal Energy Regulatory Commission last week readily approved a$4 billion merger of the state’s biggest electric and gas providers- Sierra Pacific Power and Nevada Power.

Joining a sports marketing push that is picking up momentumamong energy companies nationally, Sempra Energy has inked acombination energy services and promotional deal with the operatorsof a new basketball-hockey arena being built in downtown LosAngeles. Sempra’s CEO indicated this was just the first of a seriesof “major branding initiatives” the newly formed San Diego-basedutility holding company will be rolling out over the next 12months.

Calpine Corp. power marketing affiliate Calpine Power Servicessigned a one-year sales agreement with LG&E Energy Marketing(LG&E) to provide 150 MW from Calpine’s Texas power systembeginning January 1999. Calpine’s Pasadena Power Plant will provide140 MW of electricity, with the additional 10 MW coming from thecompany’s Texas City and Clear Lake facilities. With thisagreement, Calpine has now sold all of the power from its existingPasadena facility through 2001.