Service

The Department of the Interior’s Minerals Management Service(MMS) is beginning its third royalty-in-kind (RIK) pilot, puttingit in the business of selling Gulf of Mexico (GOM) gas productionit accepts in place of cash royalties. The pilot is intended totest a different approach to RIK, using a competitive auction tomove up to 260 MMBtu/d initially.

Pinnacle West Capital Corp., the holding company for ArizonaPublic Service and 30% owner of the Palo Verde Nuclear GeneratingStation, is making the leap into natural gas in a big way,developing one of the largest gas-fired electric generatingfacilities alongside its Palo Verde switchyard.

Frontier Energy, a subsidiary of Sempra Energy, beganconstruction of a distribution system in Warren County, NC, wherefirst-time gas service is expected to play a significant role inthe county’s economic revitalization, the company said. The WarrenCounty pipeline is part of a $55 million distribution system beingbuilt by Frontier to serve residents and businesses in sevennorthwestern North Carolina counties.

The New York State Public Service Commission approved anapplication by Empire State Pipeline to construct a newinterconnection with CNG Transmission Corp. facilities in OnondagaCounty, NY.

The Interior Department’s Minerals Management Service (MMS) hasissued a final rule for determining royalties for natural gasproduced on Indian lands. Under the new rule, which was publishedin the Aug. 10 Federal Register, Indian leases would have theoption to either compute royalties on wellhead gas using apublished price index, continue using the existing gross-proceedsmethod for arms-length contracts, or use the current MMS benchmarksystem for non-arms-length sales. If gas is processed, Indiantribes then would adopt a “dual accounting” method under whichroyalties would be based on whichever has the greater value for gas- before processing or after processing. In most cases, it’s thelatter.

The Interior Department’s Minerals Management Service (MMS) hasissued a final rule for determining royalties for natural gasproduced on Indian lands. Under the new rule, which was publishedin Tuesday’s Federal Register, Indian leases would have the optionto either direct producers to compute royalties on wellhead gasusing a published price index, continue using the existinggross-proceeds method for arms-length contracts, or use the currentMMS benchmark system for non-arms-length sales. If gas isprocessed, Indian tribes then could adopt a “dual accounting”method under which royalties would be based on whichever stage hasthe greater value for gas – before processing or after processing.In most cases, it’s the latter.

ANR Pipeline has picked up landowner support for its suitagainst the Wisconsin Public Service Commission (PSC) that chargesthe PSC unlawfully kept secret filings made by Wisconsin Gas forits competing Guardian Pipeline.

Georgia broke all records in unbundling 95% or 900,000 customersfrom Atlanta Gas Light’s merchant service in just nine months. Nowit’s up to the policy-makers “to justify the amounts of savings,determining if consumers are really better off,” AGL PresidentPaula Rosput told state regulators Tuesday.

ANR Pipeline, charging Wisconsin Public Service Commissionfilings by Wisconsin Gas for the Guardian Pipeline project wereunlawfully kept secret, is suing the PSC in Dane County, WI,Circuit Court. ANR wants the court to reverse and set aside PSCorders conditionally approving Guardian. ANR seeks remanding of thecase and the opportunity to intervene in a contested case hearing.