Sector

Continuing with its aggressive move into the power sector, the Goldman Sachs Group Inc. last Monday said that it has agreed to acquire 100% of the stock of Cogentrix Energy Inc., a privately-held independent power producer based in Charlotte, NC.

Even with higher finding and development (F&D) costs, the exploration and production (E&P) sector’s strong cash flow and historically low trading levels make it an ideal time for additional wells to be drilled in North America, according to Raymond James’ latest “Stat of the Week.”

Even with higher finding and development (F&D) costs, the exploration and production (E&P) sector’s strong cash flow and historically low trading levels make it an ideal time for additional wells to be drilled in North America, according to Raymond James’ latest “Stat of the Week.”

While its private sector electric utilities squirmed and made contingency plans for a possible Chapter 11 bankruptcy filing, Nevada’s energy regulators put a positive spin on an adverse Enron Corp. court ruling that went against the state’s two electric utilities late last month. When the three-member Nevada Public Utilities Commission met last Wednesday the court decision wasn’t mentioned.

Tripped up by its latest bankrupt unit in the merchant energy sector, San Francisco-based PG&E Corp. announced Wednesday it will ask the federal Securities and Exchange Commission for an extension of its second quarter report while financial statements are still being finalized. PG&E also said it would release is second quarter results next week (Aug. 19) with a conference call the financial community, with or without the unit’s results, which are no longer consolidated with the parent company. PG&E said both the holding company and its other Chapter 11-bound unit, the Pacific Gas and Electric Co. utility, will file for the SEC extension. They seek added time to let PG&E National Energy Group, which filed for Chapter 11 bankruptcy July 8, complete the preparation of its second quarter financial statements. “NEG is currently reviewing its methods for netting certain revenues and expenses, primarily related to hedging activities,” PG&E said in its announcement. “The outcome of this review is not expected to materially affect PG&E Corp.’s operating income, net income, balance sheet or cash flow.” PG&E NEG concurrently filed a proposed reorganization plan last month as part of its Chapter 11 filing. When implemented, the plan would eliminate PG&E Corp.’s equity in the merchant unit. “As the result of the Chapter 11 filing and the resignation of PG&E Corp. representatives from NEG’s board of directors, PG&E Corp. no longer retains significant influence over the evolving operations of NEG, including SEC filings,” the parent company said.

Unlike its other private-sector utility neighbor, Las Vegas-based Southwest Gas Corp. Monday had its credit ratings affirmed (BBB-) and its outlook improved to “stable” by Standard & Poor’s Ratings Services (S&P), which noted that the natural gas utility has about $1.1 billion in debt outstanding. Nevertheless, it faces the prospect of continued frequent rate increase filings on top of a recently received cumulative $41 million general rate hike in Arizona and Nevada.

California’s coalition of state government agencies and private-sector utilities late Friday asked the Federal Energy Regulatory Commission to reconsider its March 26 ruling on future wholesale power refunds to consider all of the additional evidence the state coalition provided early in March. The move came three days after FERC granted a rehearing on the narrower issue of the natural gas pricing formula used in the refund case.

In another case inspired by the added information flowing from ongoing federal and state investigations, Reliant Energy and others were targeted last week in a Los Angeles law firm’s class action lawsuit , alleging a “massive conspiracy” to manipulate wholesale natural gas prices through bankrupt Enron Corp.’s now-defunct online energy trading operation.

Noting that some participants in the energy sector might consider his group to be the “perpetual natural gas bulls,” Raymond James & Assoc. analyst Marshall Adkins said the market has proven that “we have, in fact, been overly bearish.” Citing the summer gas storage re-fill problem, Adkins said that Raymond James is once again upping its 2003 gas price forecast from $5/Mcf to $6/Mcf.