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Continuing turmoil within the wholesale markets and an awful month of June for gas versus power prices have forced American Electric Power (AEP) to re-think its 2002 earnings forecast. On Thursday, the company predicted its earnings would be 10% lower than expected this year.

Continuing turmoil within the wholesale markets and an awful month of June for gas versus power prices have forced American Electric Power (AEP) to re-think its 2002 earnings forecast. On Thursday, the company predicted its earnings would be 10% lower than expected this year.

The goals of deregulation within the U.S. power markets “remain frustratingly elusive,” with more states retreating from the process and regulators pursuing investigations into trading and accounting practices, said Standard & Poor’s in a report released this month. Noting that restructuring was supposed to induce more efficiencies and reduced prices, S&P said widening credit spreads and equity prices have instead sent investors “fleeing” from the sector — and the trend may continue for some time.

The daily drubbing of bad news within the energy merchant sector might indicate that the downgrades, asset sales and layoffs are characteristic of the entire energy industry, said Standard & Poor’s (S&P) in a recent report. However, the sector’s problems began “well before” California’s power crisis and Enron Corp.’s bankruptcy, and then were hit by collateral damage. Despite the upheaval, however, companies that have kept their solid, less dynamic cash flow from physical energy assets still retain their “investment-grade characteristics.”

Within less than 24 hours after Northwest Natural Gas and Enron Corp. decided to terminate their $2.98 billion stock/debt-assumption deal for the gas utility to buy bankruptcy-mired Enron’s Portland General Electric (PGE) subsidiary, Moody’s Investors Service Friday downgraded PGE and affirmed the gas company’s “stable rating.”

While California regulators drew more attention for what they didn’t do at Thursday’s twice-a-month business meeting, the increasingly split five-member panel did approve a multi-billion-dollar set of energy efficiency programs for local government and community groups statewide as well as a crucial service agreement between Pacific Gas and Electric Co. and the state power-buying agency. However, the verbal jabs commanded more attention.

Pushed into action by the current concerns regarding credit ratings within the energy industry, Topeka-based Western Resources said Friday that it has closed on two offerings of securities for $765 million to refinance its debt.

Despite the American Gas Association’s (AGA) optimism regarding the growth of natural gas competition within the United States, the Energy Information Administration (EIA) said that concerns about the high energy prices in 2000 and early 2001 and the crisis in California’s deregulated electricity market continue to slow the move toward increased competition in retail natural gas markets.

About 100 residents were evacuated within a five-mile radius of an explosion that occurred along TransCanada PipeLines mainline near Brookdale, MB, on Sunday April 14 at 11 p.m. (CDT). The explosion and fire occurred along a portion of the system in a relatively remote area. There were no reported injuries, and about 5.2 Bcf/d of gas is continuing to flow through three of the six mainline pipes there. By Friday, only one line remained out of service.