Week

Houston-based Kimball Trading and Kimball Trading Canada ofCalgary, two of the Kimball Companies, last week filed for Chapter11 bankruptcy protection in Houston. The move caused marketrepercussions last Thursday, the day after the filing, as Kimballhalted gas flows to customers. The bankruptcy filings do notinvolve the related Kimball Resources or the other KimballCompanies.

Coho Energy was notified by its lenders last week that it wasin default on an $89.6 million over-balance. The company failed tomake the first of five scheduled payments on the balance, whichresulted from an overall $239.6 million debt. The lenders reservedall rights, remedies and privileges as a result of the paymentdefault, but Coho said it expects to continue to discuss afinancing alternative with the bank group.

The Colorado Senate last week approved and sent on to the Housea bill to deregulate retail gas distribution in the state. Thebill’s sponsor, Sen. David Owen, R-Greeley, said he expects thelegislation (SB 99-153) to pass this year.

A very divided FERC last week broke with a decade-old procedureby leapfrogging the preliminary determination (PD) step in fourcontroversial pipeline projects intended to carry Canadian gas fromthe U.S. Midwest to the Northeast gas market. Instead, it deferredaction on the fate of the projects until all of the environmentalreviews are completed – “hopefully” by early next fall. Projectsponsors had mixed reactions: they were disappointed by the breakwith PD procedure, but they also were encouraged by FERC’sassurance of a final vote by fall. And all said – at least publicly- they still planned to move forward with their separate projects,but sources said privately sponsors were re-evaluating whether itwas “worthwhile to go ahead.”

The Iowa Utilities Board (IUB) gave its blessing to the proposedmerger of MidAmerican Energy Holdings Co. and CalEnergy Co. Inc.last week, removing the final regulatory hurdle to a transactionthat will combine and complement the assets and expertise of a U.S.utility with those of a United Kingdom utility. The deal isexpected to be completedon Friday.

In an unusual step last week, FERC Chairman James Hoeckeroffered some advice to the industry negotiators who have beenmeeting in closed-door sessions to craft an agreement on the majornatural gas initiatives contained in the notice of proposedrulemaking (NOPR) and notice of inquiry (NOI).

Moving one step closer to bringing 1.325 Bcf/d of gas fromWestern Canada to Chicago, Alliance Pipeline last week announcedthe start of construction with the clearing of 410 miles offorested rights-of-way for mainlines and laterals in northwesternAlberta and northeastern British Columbia. The entire system isexpected to be completed and in service by October, 2000. Alliancesaid it already has commitments from 37 shippers for 15-yearcontracts worth a total of $8.2 billion. Agreements have beenreached with 93% of landowners along its 2,320-mile route acrossCanada and the United States, while time to complete the NEBproceedings has been built into the construction schedule.

In an unusual step last week, FERC Chairman James Hoeckeroffered some advice to the industry negotiators who have beenmeeting in closed-door sessions to craft an agreement on the majornatural gas initiatives contained in the notice of proposedrulemaking (NOPR) and notice of inquiry (NOI).

The merger bandwagon continued last week as UGI Corp. announceda proposed deal that would join its retail propane marketingbusiness with the largest marketer and distributor of printing andimaging paper and supply systems. UGI will sell UGI Utilities aspart of the transaction, making it the first company “in recenttimes” to completely shed itself of its utility business. Thecompany says it can take such a dramatic step because, unlike otherutilities, it has another “very distinct” business (propane) thataccounts for about two-thirds of its annual revenues.