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Trigen Energy announced it is mounting a legal battle to forcePECO Energy to honor terms of a Gray’s Ferry power purchaseagreement. Trigen said the Grays Ferry Cogeneration Partnershipreceived a letter from PECO saying the Pennsylvania utility couldnot pay the full contract price for electricity from the 150 MWcogeneration plant. The plant sells electricity to PECO and steamto Trigen-Philadelphia Energy. It is located in Philadelphia andwent into commercial operation earlier this year. Ironically,Exelon, a wholly owned subsidiary of PECO Energy, is a one-thirdowner in the project with Trigen and NRG Generating.

Rep. John E. Ensign (R-NV) proposed legislation late last weekthat would provide a 50-cent income tax credit for each gallonequivalent of natural gas, propane and methanol used in vehiclesplaced in service after Dec. 31, 1997. The tax credit will act as a”significant financial” incentive for fleet managers and others tostep up their use of clean, domestic fuels.

Reacting to frigid weather spreading into the Southeast, Sonatis implementing an Operational Flow Order Type 3 effective todayfor four groups: Birmingham Group, South Main Zone 2, South MainZone 3 and Brunswick Line. The OFO will be extended Wednesday tothe East of Wrens and Savannah Line groups. Due to compressorproblems, Sonat said, the level of interruptible service in the twoSouth Main zones will be less than normal in limitation periods. Inaddition, an OFO Type 22 notice to become effective Wednesday forseven groups was issued by Sonat affiliate South Georgia NaturalGas.

Against a backdrop of enthusiastic support from producers, Rep.William M. “Mac” Thornberry (R-TX) last week introduced the firstpiece of legislation aimed at “completely overhauling the currentsystem” used by the federal government to collect royalties on oiland natural gas produced on federal land.

Union Pacific Resources Group (UPR) last week closed on the $2.6billion acquisition of Norcen Energy Resources, greatly increasingits production foothold in Western Canada, Latin America and theGulf of Mexico, including some deep-water prospects.

The Independent Petroleum Association of America (IPAA) broughta lawsuit in federal court in Washington D.C. last week challengingthe validity of a new regulation that bars producers from deductingthe full cost of transporting natural gas to the marketplace.

One-call pipeline safety legislation moved much closer tobecoming law last week as the Senate voted to add it to omnibustransportation legislation and in the House representatives RichardHugh Baker (R-LA) and Frank Pallone (D-NJ) introduced a bill thatis nearly identical to the one-call legislation already passed bythe Senate.

Recent estimates of natural gas consumption by the EnergyInformation Administration seem to confirm that weather is notalways the determining factor when it comes to energy use. The gasindustry might want to thank God for that. EIA shows consumption isup in the face of much warmer temperatures and much fewer heatingdegree days this winter.

Consolidated Edison announced last week it plans to selltwo-thirds of its New York City dual fuel-fired electric generationplants (5,500 MW) in an auction starting this summer as part of itsongoing electric restructuring plan, which was signed lastSeptember. About 5,050 MW of its total generating capacity isnatural gas- and fuel oil-fired. The rest burns kerosene.