Week

A road block to retail competition in Oklahoma was smashed lastweek when Oklahoma Governor Frank Keating vetoed Senate bill 565, alast-minute attempt to derail gas unbundling in the state. The billwould have pushed back the effective date for unbundling untilOctober 2001 and erased the final rules completed by the OklahomaCorporation Commission in April and approved by the legislature andthe governor.

The D.C. Court of Appeals last week rejected a challenge bySouthwest Gas Corp. to the capacity-release program of El PasoNatural Gas.

KeySpan Energy Corp. combined last week with Long IslandLighting Co. (LILCO) to form MarketSpan Corp., a new holdingcompany dedicated to market growth in the Northeast as well asinvestments in energy in North America and abroad.

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

The June Nymex contract made it 2 for 2 for up days this week,as the spot month gained another 4.1 cents to settle Tuesday at$2.256. Sources said the market followed cash prices higher butalso warmed further gains may be limited. “This is the fifth timeJune has failed to rise above $2.27. Moreover, the daily lows havebeen rising also, so sooner or later something’s going to have togive,” an analyst told GPI.

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.

American Electric Power Co. Inc. (AEP) and Central and SouthWest Corp. (CSW) last week sought FERC approval of the merger oftheir operations into one of the largest electric utility companiesin the nation.

Pacific Gas & Electric said less than 1,000 of the more than60,000 customers who lost natural gas service last week in SantaCruz County, CA, were still without service Monday. A massivelandslide Wednesday had ruptured two main transmission pipelinesserving the county, which is southwest of San Jose. More than 600PG&E workers and another 190 from Southern California Gasworked thoughout the weekend to restore service. Facilities withhot showers were set up in two towns for those without gas to heatwater. It was PG&E’s largest gas restoration project since the1989 Loma Prieta earthquake caused severe damage to thedistribution system throughout Northern and Central California, thecompany said.

Following three days when trading volume at the New YorkMercantile Exchange averaged 117,518 contracts, the May contractgained a mere 1.4 cents to $2.342 amid a session when “only” 74,378contracts changed hands. Sources said much of the activity onFriday was simply position covering ahead of both the weekend andthe expiration of the May contract this Tuesday.