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Indicated Producers wasted little time last week in seeking rehearing of a FERC order that spelled out procedures for producers to repay $500 million to customers who purchased gas produced in Kansas in the 1980s at prices that, because they included the state’s ad valorem tax, exceeded the allowed federal limits.

Natural gas producers lost a major battle last week when FERC denied hearing of an earlier decision ordering them to refund an estimated $500 million to customers who were sold gas produced in Kansas in the 1980s at prices that, because they included the state’s ad valorem taxes, were above the legal limit allowed by federal law.

Southern Company Energy Marketing remains committed to growing its wholesale business, and at the other end of the pipe, developing a business to serve producer needs in an increasingly complex energy industry.

The Supreme Court last week refused to review a lower court’s ruling permitting the assessment of royalties on a 1992 gas contract settlement between a Kentucky producer and Enron Gas Marketing.

Engage Energy Canada and EPCOR announced a gas/electricity alliance called Encore Energy Solutions, which will serve municipal utilities and large commercial and industrial customers with energy cost and price risk management.

Metromedia Co. has purchased a majority interest in New Jersey-based CPM Energy Inc., formerly Cogen Marketing Power, for an undisclosed amount of cash, making it possibly the largest aggregator of natural gas and electricity in the nation.

Matching the size of natural gas mega-mergers south of the border, the planned C$11 billion combination of TransCanada PipeLines and NOVA Corp. announced last week would integrate pipeline control of the main Canadian producing province and transportation across the top of the continent to U.S. and Canadian markets.

Texas Utilities last week said it approached Britain’s The Energy Group with “possible interest in the company” in competition with PacifiCorp, which made a failed tender offer to acquire the company back in June. Discussions between Texas Utilities and Energy Group “are at a preliminary stage and may or may not lead to an offer being made for the company,” Texas Utilities said.

Financial analysts and pipeline executives descended on the Federal Energy Regulatory Commission last Friday to urge that regulated pipeline returns be improved because they have fallen so far behind that the financial market is being driven away. On the other side of the debate, however, producers labeled pipelines cash cows that should be reined in. And other observers advised the Commission to stick with the status quo.