Western Markets: An Investor's Minefield
CALIFORNIA ELECTRIC RESTRUCTURING. California Assemblywoman Diane Martinez, chairwoman of the Utilities and Commerce Committee, has introduced two new bills aimed at protecting consumers in a competitive market. But the measures already have been put on hold for this year. The first bill, AB 579, would cut rates for residential and small-volume commercial customers by 20 percent, rather than by 10 percent as promised in the state's restructuring act, AB 1890. Her measure also would finance the rate in part by eliminating the securitization bond issue planned under AB 1890. The other bill, AB 1154, would prevent utility recovery of stranded nuclear assets above market costs.
COAL FUTURES CONTRACT. The New York Mercantile Exchange has submitted to the Commodity Futures Trading Commission a proposed coal futures contract, which NYMEX hopes to launch later this year. A contract unit would consist of 37,200 million British thermal units of coal, at a delivery facility on the Ohio River between Milepost 306 and 317, or on the Big Sandy River. The delivery period would begin no earlier than the first day of the month and at least seven days before the end of the month, but would be completed by the last day of the month.
TWO subsidiaries, Union Gas and Centra Gas Ontario Inc., of Westcoast Energy Inc., merged to form Union Gas Limited. Since 1994, Union Gas and Centra Gas Ontario have operated under a shared services agreement. Union Gas Limited will handle all business formerly handled by Union Gas and Centra Gas Ontario.
Consumers Energy and The Salvation Army operate the PeopleCare program to help needy families by providing food, shelter, clothing and other emergency aid. PeopleCare distributed more than $700,000 to 14,000 families across Michigan in 1997. Also, Consumers Energy provided energy bill credits of about $1.5 million.
Illinois Power Co. hired PECO Energy Co. to run its 950-megawatt Clinton nuclear power plant. Clinton has been shut down since September 1996 due to a variety of operational and maintenance difficulties. The initial contract with PECO is for three years, with an option for renewal.
In an effort to ensure that Internet users can easily locate PG&E Corp.'s website, PG&E changed its Internet address to www.pgecorp.com.
Turkey's Ministry of Energy and Natural Resources selected the consortium of CMS Energy, Ihlas Holding and Howard Energy Group to be the exclusive electricity distributor and operator of Turkey's Bursa-Yalova electric distribution systems. CMS Energy's international utility subsidiary, CMS Electric and Gas Co., will hold the concession rights to the privatized assets and 30 percent ownership interest. Ihlas Holding will hold 55-percent ownership and Howard Energy Group will hold 15 percent ownership in the consortium. CMS will serve as operator for the consortium. Operating rights to the Bursa-Yalova system will run for 30 years.
Shell Oil Co. acquired Tejas Gas Corp. for $1.45 billion, following approval of the merger agreement by Tejas shareholders. Shell's existing natural gas midstream business will be combined with Tejas. The new company will operate under the Tejas name as an affiliate of Shell Oil Co.