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FERC made three small but significant changes to its pipelinerate of return policy this week, winning the praise of theInterstate Natural Gas Association of America (INGAA), whichrepresents the pipelines. INGAA President Jerald V. Halvorsen saidthe Commission’s action “should help pipelines compete in theincreasingly competitive financial markets for the capital to buildprojects that are necessary to meet projections of a 30 Tcf naturalgas economy by 2010.”

QuickTrade released the first commercial Internet-basedelectronic power trading system this week. Streamline, its biggestcompetitor, is expected to follow suit over the next few months.The QuickTrade system is equipped to handle forward trades at 13hub locations across the U.S. and one in Canada, and so far hasattracted the interest of about 35 traders, 20 of which have signedup to begin utilizing the system.

IPL Energy and MCN Energy took the last major regulatory step inadvancing their 1 Bcf/d Vector Pipeline project this week by filingan application with Canada’s National Energy Board forauthorization to construct the 16-mile Ontario portion of the342-mile line. An application for the larger U.S. portion was filedwith FERC in December.

El Paso Energy sold its 25% interest in NrG Information Servicesto NrG’s remaining partners, NOVA Gas Transmission., TransCanadaPipeLines, and Westcoast Energy. “This decision allows El PasoEnergy to continue focusing on its core businesses, includingnatural gas transmission, gas gathering and processing, energymarketing, and international project development,” said Graciela E.Martinez, El Paso vice president.

FERC earlier this week gave its blessing to the indirect mergerof two Midwest electric utilities – Wisconsin Public Service andUpper Peninsula Power.

An additional 1.6 million customers in 41 Ohio counties could bechoosing alternative gas suppliers this winter, followed by morethan 2.8 million customers in 57 of Ohio’s 88 counties in November1999, if the Public Utilities Commission of Ohio (PUCO) accepts itsstaff’s recommendations. Based on good results in pilot programslast winter in metropolitan Toledo (Columbia Gas), Canton andMarietta (East Ohio Gas) and in greater Cincinnati (Cincinnati Gas& Electric), staff told the full commission the three pilotprograms should be expanded as soon as possible.

Consolidation in the drilling/oilfield services industrycontinued this week, with the announcement that Baker Hughes andWestern Atlas plan to merge in a tax-free, stock-for-stocktransaction valued at $5.5 billion. It will create a company with$6.5 billion in annual revenues and 36,000 employees.

Consolidated Edison announced it plans to sell two-thirds (5,500MW) of its New York City electric generation plants in an auctionstarting this summer. Its plants will be divided into threebundles. Each bundle will include a major generating facility-theRavenswood Generating Station in Long Island City, the AstoriaGenerating Station in Astoria, or the Arthur Kill Station on StatenIsland-and gas turbine generating facilities in Queens andBrooklyn. The company plans to sell two of the bundles throughauction and retain the remaining bundle, which has not yet beenidentified. It expects to receive authorization from the New YorkState Public Service Commission (PSC) by July 1. The auctionprocess would begin later that month, with the winning bidders tobe announced in January 1999.

Consumers Energy will expand its “Gas Customer Choice” retailprogram this April to 100,000 customers state-wide in Michigan,following a one-year pilot that allowed 500 customers in Bay Countyto pick another natural gas supplier. In all, 300,000 customerswill be given a choice of suppliers over the next three years.