Week

Providence Gas Co. (ProvGas) was granted a rematch with state regulators and Aurora Natural Gas of Dallas last week but got only a token $5,000 knocked off of a $323,000 fine the state imposed in September for affiliate favoritism and tariff violations. Judge Stephen T. Scialabba also granted the company’s request for rehearing and reconsideration of $300,000 in refunds to marketers ordered in the Aurora Natural Gas LLC v. Providence Gas Co. case (Docket No. D-98-1).

Although 1997 saw record financial results for Consolidated Natural Gas (CNG), the company said last week a management reorganization is needed to ensure further growth. CNG is reorganizing its four local gas utilities and its interstate natural gas pipeline and storage operations.

Westcoast Energy Inc. last week challenged BC Gas’ request for an abbreviated approval process for the Southern Crossing pipeline proposal and called for a full public review of the re-filed proposal by BC Gas to build a $350 million pipeline across Southern British Columbia. Westcoast maintains the Southern Crossing project is too expensive and that there are other alternatives.

FERC last week rejected a proposed service agreement in whichColumbia Gulf Transmission tried to push the envelope too far bynegotiating terms and conditions of service with one of itscustomers, Entergy Louisiana Inc. (ELI)

SaskEnergy and Enbridge Consumers Gas last week dropped out ofthe competition for a distribution franchise in Nova Scotia once itbecame clear the provincial government would allow industrialcustomers to apply for direct connections to the Maritimes andNortheast Pipeline. Their departure leaves only Sempra Atlantic Gasand Maritimes NRG competing for province-wide distributionfranchise rights and seven small municipal agencies competing forsite-specific franchises.

SaskEnergy and Enbridge Consumers Gas last week dropped out ofthe competition for a distribution franchise in Nova Scotia once itbecame clear the provincial government would allow industrialcustomers to apply for direct connections to the Maritimes andNortheast Pipeline. Their departure leaves only Sempra Atlantic Gasand Maritimes NRG competing for province-wide distributionfranchise rights and seven small municipal agencies competing forsite-specific franchises.

While technical conference participants hotly debated FERC’snatural gas transportation initiatives last week, there appeared tobe some areas of agreement – starting with the need for more timeto argue.

While gas industry officials debated the merits of capacityauctions, electronic trading experts last week indicated suchauctions were doable from a technical standpoint but would firstrequire a certain amount of standardization of products,definitions and practices. This immediately raised the eyebrows ofsome critics, who believe that too much standardization could beharmful to the gas industry.

The Energy Information Administration released its Annual EnergyOutlook 1999 (AEO99) last week, projecting gas demand will grow byabout 50% to 33.17 Tcf by 2020 from 1997 levels of 22.59 Tcf, whichis a 1.7% average annual increase.