Steps

Dynegy Inc. has taken “all the right steps” in its long-termplanning over the last three to four years and “the future is nowat Dynegy,” Chairman Chuck Watson said in announcing vastlyimproved profits in 1998 over 1997. Overall the company had 1998net income in the plus column of $108.4 million or $0.66 perdiluted share, a figure just slightly larger than the one recordedin the minus column in 1997.

A battle over the role of municipal utilities in a deregulatedenergy market apparently stands in the way of final approval ofcomprehensive energy deregulation legislation in New Jersey.Tuesday, the state senate approved the bill, S5, containing anenergy deregulation package that would force the state’s gasindustry to allow supply competition statewide starting Dec. 31,and statewide electric generation competition starting August 1.The senate passed the bill by a margin of 28 to seven with threeabstentions and two senators not present. The bill then made itsway to the general assembly where, late Tuesday night, thelegislators amended it and sent it back to the senate.

As several observers expected, cash prices started to retracetheir steps back down Thursday after having peaked the day before.Declines ranged from as little as a nickel to nearly 15 cents, butmost were in the neighborhood of a dime.

California regulators are scheduled today to take additionalsteps to open up the natural gas business by removing allrestrictions to the core aggregation program and unbundling gasutility billing services so nonutility firms can compete to providethat function. The actions are part of a larger program aimed atmaking a final decision on gas industry restructuring by the end ofthis year.

California regulators have taken steps to smooth the way for thestate’s first merchant underground natural gas storage field, thefirst wells for which are being drilled beginning this week about50 miles north of Sacramento in a depleted dry gas field in ruralnorthern California.

While FERC’s regulatory gas options paper so far has been kepttightly under wraps, Commissioner Curt L. Hebert Jr. clearly is nothiding his views on some of the most important issues theCommission will face over the next few years. In an articlepublished in the Energy Law Journal, Hebert begins to tackle thequestion of how the Commission can “develop incentives that willspur the industry to act more competitively.”

One-call pipeline safety legislation moved much closer tobecoming law this week as the Senate voted to add it to omnibustransportation legislation and representatives Richard Hugh Baker(R-LA) and Frank Pallone (D-NJ) introduced a nearly identicalone-call bill in the House of Representatives. The Senate alreadyhas passed one-call as a stand alone bill (S. 1115) but includingit in the larger transportation package increases its chances ofbecoming law.