The natural gas industry’s views on whether FERC should continue to waive price caps on short-term capacity release transactions beyond the Sept. 30 expiration deadline are, at best, mixed so far. But customers in the West are adamant — they want price caps, at least in some limited form, reinstated in markets served by El Paso Natural Gas and Northwest Pipeline.
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S&P Lowers Credit Ratings on CMS Utility, Pipeline Units
Standard & Poor’s lowered the corporate credit rating on CMS Energy Corp.’s subsidiaries utility and pipeline subsidiaries, Consumers Energy Co. and CMS Panhandle Pipeline Cos, to double-‘B’, which is in line with the ratings of the parent company. S&P also lowered the senior unsecured rating on CMS Energy to single-‘B’-plus and removed all the ratings of CMS and its subsidiaries from CreditWatch with negative implications. The outlook for the company is still negative.
Utilities Support Texas Gas’ Capacity Auction
Three major New York utilities are supporting the application of Texas Gas Transmission to establish a web-based auction for short-term firm and interruptible capacity on its system (RP02-378).
Reliant’s New CFO Former Goldman Sachs Director
Mark M. Jacobs, a former managing director of Goldman Sachs & Co., has been named CFO of Reliant Energy and Reliant Resources Inc., effective July 29. Reliant has been without a top financial officer since May, when CFO Stephen W. Naeve, who carried the title for the entire company, was named to replace Reliant Resources COO Joe Bob Perkins. Perkins resigned as the energy round-trip scandal was unfolding (see Daily GPI, May 17).
House Lawmakers Try to Block Drilling Offshore California
House lawmakers were expected to vote late Tuesday on an amendment to an Interior Department spending bill that seeks to block further oil and natural gas drilling on 36 disputed leases off the coast of California.
Industry Brief
Rand Capital Corp. invested $500,000 in convertible promissory notes in Buffalo, NY-based Somerset Gas Transmission Co. LLC as part of a $3 million private placement bridge loan. Rand’s investment also provided a warrant for a minority equity interest in the company, which is planning to provide interstate natural gas pipeline transportation services from the Chicago hub and Appalachian producing basins to markets in the Northeast and Mid Atlantic. Somerset’s plan involves gas transportation through its own pipelines and the lines of others. One of Somerset’s initial acquisitions was a 40-mile section of gathering line and related facilities in Indiana County, PA, from Columbia Gas Transmission Corp. “The Somerset management team has worked for more than five years to assemble a network of pipelines and rights-of-way to transport natural gas,” said Rand CFO Daniel P. Penberthy. “Rand’s funding will allow the company to continue this acquisition strategy as the company completes their pipeline network. In this regard, Rand’s investment is structured to provide both a current return and provides the option for Rand to participate in the company’s next round of financing.”
Another Junior Independent — Panaco — Files for Bankruptcy
For the second day in a row, another Houston-based small independent producer has announced plans to file for bankruptcy. Panaco Inc. said Tuesday it would file a voluntary petition for relief under Chapter 11 in the U.S. Bankruptcy Court, on the heels of Contour Energy Co., which announced similar plans on Monday (see Daily GPI, July 16).
Transportation Notes
Florida Gas Transmission extended an Overage Alert Day notice for its market area, which began Monday, at least through Tuesday and tightened the tolerance for negative daily imbalances from 10% to 5%.
S&P Lowers Credit Ratings on CMS Utility, Pipeline Units
Standard & Poor’s lowered the corporate credit rating on CMS Energy Corp.’s subsidiaries utility and pipeline subsidiaries, Consumers Energy Co. and CMS Panhandle Pipeline Cos, to double-‘B’, which is in line with the ratings of the parent company. S&P also lowered the senior unsecured rating on CMS Energy to single-‘B’-plus and removed all the ratings of CMS and its subsidiaries from CreditWatch with negative implications. The outlook for the company is still negative.
Top Reliant, CMS Wholesale Trading Execs Resign
Joe Bob Perkins, COO and president of Reliant Energy Inc.’s wholesale group and group president of the wholesale businesses for Reliant Resources, as well as Shahid J. Malik, president of Reliant Energy Services, both resigned Thursday. Their news was followed in the afternoon by CMS Energy Corp., also caught up in the energy trading melee, which reported that Tamela W. Pallas, president and CEO of the company’s energy market unit, also has resigned.