Yesterday

FERC yesterday set the merger between Western Resources Inc. andKansas City Power & Light (KCP&L) for evidentiary hearingon issues involving market power and customer protection.

Expiration day in the natural gas pit had a little something foreveryone Monday. While bears were greeted yesterday morning by alower open that paved the way for declines to the $1.80 level,aggressive afternoon buying put a smile on bull-traders’ faces asit led the April contract back above Friday’s best levels. But whenall the dust had settled and the final settlement price was handeddown from the data room at Nymex, neither bull nor bear could claimthe see-saw battle as a victory or a defeat. April finished downjust 0.2 cents at $1.852 and the May contract echoed that sentimentclosing 0.2 cents lower to $1.883.

New Century Energies and Northern States Power, two mid-sizedcombination utilities, decided on marriage yesterday to create amuch larger company, fend off competitors and prepare for comingderegulation. Through a $4.7 billion merger of equals ($9 billionbased on combined market capitalization), the companies will createa Minneapolis-based electric and gas utility conglomerate with 3million power customers and 1.5 million gas customers in 12 statesfrom Mexico to Canada.

Energy Secretary Bill Richardson yesterday said the long-awaitedClinton administration bill to restructure the retail powerindustry would be on congressional lawmakers’ desks after theyreturn from Easter recess in mid-April.

Rep. Robert Franks (R-NJ) told natural gas executives yesterdaythe Pipeline Safety Act of 1995, which is up for reauthorization inCongress this year, has been a success story so far and that hedoesn’t think it should be changed.

Signaling what could become a trend among large producers, Shellyesterday said it is stepping into the independent power generationbusiness with partner Bechtel Enterprises.

Clinton administration officials met with major and independentproducers at the White House yesterday and assured them that ahigh-level group would be established to examine the conditionsthat are contributing to the depressed state of the oil and gasindustry.

A very divided FERC yesterday broke with a decade-old procedureby leapfrogging the preliminary determination (PD) step in fourcontroversial pipeline projects intended to serve the Northeast gasmarket. Instead, it deferred action on the fate of the projectsuntil all the environmental reviews are completed – “hopefully” byearly next fall.

Too little, too late was the apt expression for the futuresmarket yesterday, which continued lower despite what someconsidered to be the most constructive fundamentals yet thiswinter. And so the April contract took a page out of the Marchcontract’s playbook, slipping 3.8 cents to $1.659 amid a tight,6-cent trading range. Estimated volume was high for the usuallyquiet day-after expiration with 65,714 contracts changing hands.