Union

Hours after delivering his State of the Union address, President Bush Wednesday issued an executive order that seeks to “strengthen the environmental, energy and transportation management” of the federal government.

Pennsylvania-based natural gas and electric utility UGI Utilities Inc. has purchased the gas utility assets of PG Energy from Southern Union Co. for $580 million. The assets, which will be renamed UGI Penn Natural Gas Inc., will add nearly 158,000 customers to its gas operations. The gas division had been serving 307,000 customers in 14 Pennsylvania counties. The sale is expected to be accretive to earnings in the first full fiscal year of ownership, according to UGI Corp. Chairman Lon R. Greenberg. Morgan Lewis & Bockius LLP provided legal services to UGI in connection with the acquisition. Through its subsidiaries, UGI Corp. owns 44% of AmeriGas Partners LP, the nation’s largest retail propane marketer, and it owns Antargaz, one of the largest liquefied petroleum gas distributors in France.

Another electric utility filed suit last month against Union Pacific Railroad Co. (UP) alleging the railroad has failed to honor coal delivery obligations.

President Bush’s State of the Union address Tuesday night was notable more for what it didn’t say on energy policy — it failed to make any reference to domestic oil and natural gas drilling.

The Kentucky Public Service Commission has approved an $8.1 million rate hike for the natural gas distribution service of Cinergy Corp. subsidiary Union Light, Heat and Power Co. (ULH&P). The base rate increase request covers investments of $123 million in improvements that ULH&P is making to its system, partially offset by reduced maintenance expenses because the improvements in the gas distribution system will lower the number of leak repairs. ULH&P, which serves 92,000 natural gas customers in six Northern Kentucky counties, filed the rate request in February to continue to recover annual costs associated with the utility’s accelerated main replacement program, initiated to improve the reliability and safety of the gas distribution system. ULH&P has replaced 110 miles of cast iron and bare steel pipe through 2005, or about 50% of the cast iron and bare steel mains in its system. ULH&P implemented the rate hike in October, pending commission approval. Typical residential customers will actually see their monthly bills in January reduced to $204.07 from $210.32, based on the approved gas cost adjustments for the month.

The Missouri Public Service Commission has approved Aquila’s sale of a small eastern Missouri gas distribution system to Union Electric Co., a subsidiary of AmerenUE, Missouri’s largest power company and third largest gas distributor. The distribution system provide service to 4,200 customers in the Rolla, Salem and Owensville areas.

Transcontinental Gas Pipe Line Corp. and Trunkline Gas pipeline contend that their existing tariff provisions governing discount rates at secondary transportation points fully comply with the Federal Energy Regulatory Commission’s discount policy. But if necessary, Transco, a Williams pipeline, said it was willing to remove certain words from its tariff to quell agency concerns about its discounting practices.

Production from Dominion’s “wet” gathering system that was being delivered off-system to Equitrans at the Copley and West Union interconnect meters must be shut in immediately, Dominion said shortly after the start of Wednesday’s gas day. “At this point, we do not know when deliveries can resume.” The pipeline has had mixed success in trying to move to Equitrans wet system gas upstream of Hastings (WV) Extraction Plant that was shut in after an Oct. 31 explosion and fire at the plant (see Daily GPI, Nov. 18).

Southern Union Co.’s Missouri Gas Energy (MGE) on Tuesday said it has filed a proposal with the Missouri Public Service Commission (MPSC) to increase base rates and to reduce the volatility of customer bills caused by dramatic changes in winter conditions.