Week

Representatives of the major utility industries, natural gas,electricity and telecommunications, met in Houston this week tojointly address Y2K issues. Gary Gardner, chief information officerof the American Gas Association (AGA) cited interlocking activitiesas the basis for the meeting. For instance electricity powers manyof the pipeline compressor stations that keep the natural gasflowing. “Although gas companies have manual overrides that can beused in the event of an electrical power shortage or outage, fieldpersonnel posted at the compressor stations will rely ontelecommunications devices to communicate with their headquarters.

Following three straight days of advances the bears reclaimedthe futures market last Friday when early selling pressure piercedthrough several interim levels of support. From that point the routwas on as the February contract plummeted sharply lower inafternoon trading. Only the final bell could halt the decline thatleft the prompt month down 11.4 cent to $1.778.

After nearly two years of deliberation, the Commodity FuturesTrading Commission last week conditionally approved a new rule,permitting the New York Mercantile Exchange to hold a three-yearpilot during which futures contracts can be exchanged for positionsin swap transactions (EFS transactions).

TransColorado Gas Transmission started pressuring up it Phase 2extension into western Colorado last week and expects to begintransportation services from the northern Rockies to the San JuanBasin some time next month, pending FERC approval of its ratedesign.

FERC last week upheld an earlier order that paved the way forGeorgia’s largest utility to implement retail unbundling behind itscitygate in late 1998.

Georgia deregulation proved it is in full throttle last week asthe municipality representing the city of Marietta formed analliance with Columbia Energy’s Georgia affiliate, Columbia EnergyRetail Corp. The alliance calls for a 10-year deal with the city ata guaranteed base price of 39.9 cents per therm for one year and acontractual promise to be competitive for the other nine. Themunicipality includes between 30,000 and 40,000 gas customers.

The Commodity Futures Trading Commission (CFTC) last weekapproved a New York Mercantile Exchange (NYMEX) application totrade electricity futures and options based on delivery at thePennsylvania-New Jersey-Maryland (PJM) western hub. And slated forapproval today is the proposed and competing Chicago Board of Trade(CBOT) PJM western hub electricity futures contract.

Midcoast Energy Resources last week piled more assets onto its growing Texas-Louisiana pipeline empire with two separate deals worth a combined $4.55 million.

FERC last week changed its tune and cleared the way for NorthernNatural Gas to acquire off-system, interruptible capacity fromthird-party pipelines. On rehearing of a July order, the Commissionfound that since Northern Natural sought the IT capacity to augmentits own operations, rather than for the purpose of re-marketing it,its request did not raise the concerns cited in a 1997 TexasEastern Transmission (Tetco) case.