NGI The Weekly Gas Market Report

Commissioner William Massey, who took over as FERC chairmanFriday, is likely to have the shortest term as FERC chairman onrecord, with the Bush administration looking to replace him withCommissioner Curt Hebert Jr. as acting chairman possibly as earlyas this week, according to a member of the Bush energy transitionteam.

Niagara Mohawk (NIMO) shareholders last week approved an $8.9billion merger with Britain’s National Grid Group plc a couple daysfollowing a major rate reduction deal that was offered to New Yorkratepayers and regulators in exchange for approval of the marriage.

As one of his first acts as president, Sen. Pete Domenici (R-NM)has called on President George W. Bush to order the three federalagencies that have jurisdiction over U.S. energy supply to craftcoordinated policies to address the energy crisis facing thenation.

A federal appeals court in Washington D.C. has dismissedchallenges by California regulators and other petitioners to FERC’sapproval of the the controversial contract arrangement that awardedDynegy Marketing and Trade more than 1 Bcf of turned-back capacityon El Paso Natural Gas.

The Energy Information Administration (EIA) again raised itswholesale and retail gas price projections for the winter andconfirmed that gas storage levels at the end of December were lowerby 10% than the previous record low set in 1976.

Any Department of Energy (DOE) initiative seeking to imposemandatory reliability standards in the electric industry would alsohave to tackle the issue of competition to be effective, theFederal Trade Commission (FTC) says.

American Electric Power announced last Thursday it has made amajor move to expand its wholesale natural gas business in theSouthwest, agreeing to acquire the 2.4 Bcf/d Houston Pipe Line(HPL) along with the Bammel storage field, one of the largeststorage fields in North America, from Enron. AEP said since somedetails remain to be worked out, it was not disclosing the terms ofthe transaction at this time. AEP will be acquiring the stock ofHPL and it expects to complete the deal in the next couple months.

The California Public Utilities Commission (CPUC) thinks DynegyPower Marketing Inc. doth protest too much.

It appears the Guardian Pipeline project received what it wantedfor the holidays after all, even though it came a week or two late.The pipeline cleared one of the larger regulatory hurdles, as theFederal Energy Regulatory Commission (FERC) staff issued a FinalEnvironmental Impact Statement (EIS) on the project, deeming theconstruction and operation of the 149-mile natural gas pipelinefrom Joliet, IL, to Ixonia, WI, an acceptable environmental action.