Winning

Shell Energy Services became Georgia’s third largest marketer last week by winning an auction with a $19.3 million bid for the bankrupt Peachtree Natural Gas’ 170,000 customers. The customer accounts may switch as soon as Dec. 1 or as late as the end of December depending on how fast the Federal Trade Commission (FTC) grants its approval of the sale, sources close to the situation said.

A Georgia bankruptcy court named Shell Energy Services thewinning bidder for Peachtree Natural Gas’ customers yesterday.Shell’s bid of $19.3 million beat out the only other companyinvolved in the bidding, Georgia Natural Gas Services.

Only two-years after winning its hard-fought battle to acquire Portland General Electric, Enron Corp. President Jeffrey K. Skilling last week said the company is considering “alternatives” for the electric utility.

Few traders would dispute that Wednesday was a classic day forwanting to buy early and sell late. Sources reported prices risingsteadily during trading at virtually every point, with the highends of ranges occurring late in the morning. Increases of a dimeor more dominated the market, and Northeast citygates were seeingthe high side of $3 again in some deals.

Oneok increased its offer to acquire Southwest Gas by $1.50Monday, winning the Southwest Gas board of directors’ approval anddefeating an unsolicited bid from Austin, TX-based Southern UnionCo. The new monetary total of the merger is $1.8 billion or$30/share of common Southwest Gas stock. Southern Union had acompeting, unsolicited bid for Southwest of $32/share on the table,but Southwest had reservations concerning Southern Union’stimetable for the deal’s completion.

Following three straight days of gains, bull traders had theirwinning streak cut late Monday after trading in positive territoryfor much of the session. And although many sources were expecting apullback following the near 20-cent price spike last week, somefelt the prompt contract’s inability to make a new high was anegative feature. The May contract finished down 0.8 cents at$2.03.

San Diego Gas &amp Electric (SDG&ampE) completed divestiture ofall its fossil-fueled generation with the selection of Dynegy Inc.and NRG Energy Inc. as the joint winning bidder for its 951 MWEncina Power Plant in Carlsbad, CA.

Buyers appeared to be winning most of the price standoffs inlate bidweek business Thursday. Michigan citygates were down to thelow $1.90s after deals had been done earlier in the mid $1.90s, amarketer said. Another felt it odd to see Michigan trading at aslightly negative basis for a change after hitting plus 24-25 insome cases last winter. But several traders agreed there’s nomystery to the basis weakness; “it’s all that storage” in thestate, one commented. We’ll continue to see Michigan beingdiscounted relative to Chicago deliveries for quite a while, againfor the storage reason, he said.

FERC made three small but significant changes to its pipelinerate of return policy this week, winning the praise of theInterstate Natural Gas Association of America (INGAA), whichrepresents the pipelines. INGAA President Jerald V. Halvorsen saidthe Commission’s action “should help pipelines compete in theincreasingly competitive financial markets for the capital to buildprojects that are necessary to meet projections of a 30 Tcf naturalgas economy by 2010.”