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News Digest

Fortnightly Magazine - November 1 1999

not review the construction or operation of the plant because Enron intends to operate it entirely as a merchant plant. The commission noted that Enron will apply to the FERC to obtain authority to operate the plant as an exempt wholesale generator under federal law. Cause No. 41411, Aug. 25, 1999 (Ind.U.R.C).

Telephone Service Charges. The California PUC adopted a set of performance measures and procedures to determine whether incumbent telecommunications local exchange carriers are providing competitive carriers with "parity of access" to their operations support systems, which are used to initiate new service and changes in service for end-use customers. The commission said the level and method of assessing penalties for failure to meet the performance benchmarks will be decided in a separate incentives phase of the proceeding. R.97-10-106, I.97-10-017, D.99-08-020, Aug. 5, 1999 (Cal.P.U.C.).

Internet Commerce

Power Trading. Houston Street Exchange on Sept. 13 launched HoustonStreet.com, the first fully Web-based wholesale electric power trading floor available throughout the United States, enabling energy traders to buy and sell wholesale electricity with the click of a mouse. Previously, only power traders in the Northeast (NEPOOL, PJM and NYPP) could buy and sell power on the site.

The company says it has adapted its site to address the "subtle differences" in how traders buy and sell power in different regions. HoustonStreet.com allows traders to post offers, make bids, counter and re-counter based on the product and terms of their choice.

Mergers & Acquisitions

Unicom + PECO. Unicom announced on Sept. 23 a definitive merger agreement with PECO Energy through formation of a new holding company, touting expected cost savings of around $100 million after the first year and $180 million three years after the closing of the deal. PECO shareholders would receive either one share of the new company or $45 per share in cash; Unicom shareholders would get 0.95 shares of the new company or $42.75 per share in cash. The companies would fund the $1.5 billion in cash payments (a ceiling of $750 million for each set of shareholders) from the sale of the fossil generation fleet of Commonwealth Edison, Unicom's wholly owned subsidiary.

Dominion Resources + CNG. Virginia regulators approved the merger of Dominion Resources Inc. and Consolidated Natural Gas Co. by accepting a settlement that requires the merger partners to sell or spin off DR's Virginia Natural Gas Co. Within 12 months of completion of the deal to alleviate market power concerns, CNG would become a wholly owned subsidiary of Dominion Resources.

"The agreement ¼ to divest ownership of VNG constitutes one of the most important of the undertakings set out in this [s]tipulation," the commission said in its order.

Meanwhile, the Ohio PUC, which is not required to approve the merger but conducted a structural review at the request of East Ohio Gas Co. (CNG's natural gas distribution company in Ohio), has filed a statement with the U.S. Securities and Exchange Commission supporting the merger. The Ohio commission told the SEC that it would continue to exercise jurisdiction over East Ohio Gas, and that the merger would have