Wins

Illinois Power Co. received unanimous approval last week fromthe Illinois Commerce Commission to transfer all its fossil-fueledgenerating stations and associated support staff to a newsubsidiary of parent company Illinova Corp. The move still requiresFERC approval. If completed it would be the first time an electricutility was allowed to transfer its entire fossil generating fleetto a separate unregulated affiliated company, Illinova said. Thespin-down was one of the requirements set out in a merger agreementsigned last month by Illinova and Dynegy. That merger is expectedto be completed early next year.

Illinois Power Co. received unanimous approval yesterday fromthe Illinois Commerce Commission to transfer all its fossil-fueledgenerating stations and associated support staff into a newsubsidiary of parent company Illinova Corp. The move still requiresFERC approval. If completed it would be the first time an electricutility was allowed to transfer its entire fossil generating fleetinto a separate unregulated affiliated company, Illinova said. Thespin-down was one of the requirements set out in a merger agreementsigned last month by Illinova and Dynegy. That merger is expectedto be completed early next year.

In a key move last week, the Federal Energy RegulatoryCommission endorsed an innovative hourly firm transportation (HFT)service that will enable a gas pipeline to quickly respond to thepeaking needs of power generators. With this action, Reliant EnergyGas Transmission – which proposed the service – becomes the firstpipe to move away from the traditional daily and monthlytransportation markets.

Wisconsin Gov. Tommy G. Thompson says he supports phase two ofANR Pipeline’s Wisconsin 2000 Expansion that would add 194 MMcf/dof firm capacity to meet peak-day requirements and the needs of thegrowing power generation market in the state.

TransCanada del Bajio was awarded a permit to build and operatea system to transport gas from Calamanca, Guanajuato, Mexico, tothe capital city of Aquascalientes. Mexico’s Energy RegulatoryCommission (CRE) awarded the permit to the consortium made up of TransCanada Pipelines Ltd. (95%) and Mexico’s Corporacion GUTSA(5%). The project entails construction of a 126-mile network of 12-and 16-inch pipelines with capacity of 90 MMcf/d. TransCanada delBajio will invest $56.4 million during the first five years of thesystem’s operation. The project is intended to supply gas to theBajio geographic zone whose distribution permit has been put up forbidding by the CRE. The winner of this permit will be announced byDec. 17.

FERC last week gave the green light for ANR Pipeline to moveahead with construction of its Wisconsin Loop Expansion Project,which would provide about 116 MMcf/d of additional capacity toLDCs, marketers and power generators in the state. This puts ANRout in front of competing projects that also intend to vie for themarket.

Westcoast Energy is leading an international consortium awardeda $250 million contract by Pemex Exploracion y Produccion (PEP) toconstruct and operate a 250 MMcf/d offshore gas compression andliquids recovery facility. The facility is to be located near theexisting Akal-GR platform in the Cantarell oil field in the Bay ofCampeche, Gulf of Mexico. The project will help to recover gas fordelivery into the Mexican national pipeline system, which is beingexpanded to meet the needs of new gas distribution concessions andpower generation plants.

Columbia Gas of Pennsylvania last week beat out Equitable Gas inthe bidding to provide service to new commercial and residentialbuildings that are slated to be constructed on a former LTV steelsite on the city of Pittsburgh’s South Side. The site, which isowned by the city’s Urban Redevelopment Authority (URA), currentlyis in the midst of major redevelopment.

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.”