Daily GPI

Powder River Basin gas producers may be about to get a moredirect route to Midwest markets. Northern Border Pipeline hasreleased plans to build a new 325-mile greenfield pipeline fromMcCabe, MT, to Gillette, WY, to tap the rapidly growing productionin the Powder River, which is estimated to hold between 10 and 30Tcf of gas.

PG&E National Energy Group, an affiliate of PG&E Corp.,has formally filed an application at FERC seeking the green lightto build the U.S. leg of a 215-mile natural gas pipeline that wouldextend from the Arizona-California border through northern Baja inMexico.

Based on the results of its much-anticipated investigation, FERCyesterday found that the market rules and structure for wholesalesales of electricity in California are “seriously flawed,” and thatthey — along with the imbalance in supply and demand — havecaused and will continue to cause “unjust and unreasonable” ratesfor short-term services in markets operated by the CaliforniaIndependent System Operator (Cal-ISO) and California Power Exchange(Cal-PX).

Market factors, including increased costs for natural gas andNOx credits, increased demand, scarce resources and unusually hightemperatures throughout the West, coupled with flawed market designand regulatory policies, and possibly some exercise of market powerwere responsible for the high power prices in California this pastsummer, according to the FERC staff report on bulk power marketsreleased yesterday.

Colorado Interstate Gas Co. has begun transporting an additional33 Mdth/d of natural gas from the Raton Basin to delivery points onits system following completion of its Picketwire Lateral Loop insouthern Colorado. The Coastal Corp.’s Rocky Mountain pipelinesubsidiary placed the line in service Oct. 24.

Montana Power Co. is no longer in the oil and gas business,after closing the sale of some of its energy assets to PanCanadianPetroleum Ltd. for $475 million in a combination of cash andcredit. The assets include oil, natural gas and gas liquidsexploration, production and marketing companies in the UnitedStates and Canada.

DukeSolutions is hauling in eight independent power facilitiesfor $81 million from Houston-based Waste Management Inc., and hasplans to invest another $20 million into the cogeneration andrenewable energy facilities in California, Pennsylvania, Maine andFlorida. Together, the facilities generate 244 MW and revenues overthe next 15 years could exceed $1 billion.

Reliant Services LLC plans to purchase Miller Pipeline Corp., anatural gas distribution contractor, from NiSource Inc. for $68.3million under an agreement announced this week. Reliant is jointlyand equally owned by subsidiaries of Vectren Corp. and CinergyCorp., and the acquisition will expand its utility servicesbusiness, adding underground pipeline construction, replacement andrepair services.

Natural gas-fired generation continues to proliferate as NewJersey-based PSEG Power said yesterday it will buy 30 gas and steamturbines from GE Power Systems, and Conectiv of Wilmington, DE,announced it had started construction on a 550 MW plant to housesome of the 21 combustion turbines it ordered recently from SiemensWestinghouse and GE.