Wednesday, June 07, 2006

Foreign Ownership

Energy Biz Insider:
Foreign ownership of American utilities is not uncommon. For example, National Grid owns Niagara Mohawk and E.ON owns LG&E Energy Corp. In those cases, state regulators are pleased with the level of capital being placed in new infrastructure as well as the amount of investments in economic development. And with the repeal of the Public Utility Holding Company Act in last year's energy bill, cross-border offers could become more commonplace.

Tuesday, June 06, 2006

PPL's Rate Caps

Seeing the havoc that’s resulted from caps expiring on rates of other electric companies, PPL is taking steps to avoid the same fate when its cap runs out in December 2009.

It’s too early to predict what will happen when PPL’s cap expires, a change set in motion by the state’s deregulation of the electric industry 10 years ago.

But PPL... and the state Public Utility Commission, which oversees the industry, have no interest in letting history repeat itself.

NY Without Indian Point

The New York Times:
New York's electrical grid could get along without the Indian Point nuclear reactors, but replacing their output would be difficult and expensive, according to a report by a special committee of the National Academy of Sciences.

The committee said that electric demand is growing so fast in the region that even if the reactors stay in operation, simply keeping the lights on in peak summer periods will be a challenge in coming years.

Environmentalists Debate Wind Power

The New York Times:
Dan Boone has no doubt that his crusade against wind energy is the right way to protect the Allegheny highlands he loves. Let other environmentalists call him deluded at best, traitorous at worst. He remains undeterred.

For four years or more, Mr. Boone has traveled across the mid-Atlantic to make every argument he can muster against local wind-power projects: they kill birds and bats; they are too noisy; they are inefficient, making no more than a symbolic contribution to energy needs.

Wind farms on the empty prairies of North Dakota? Fine. But not, Mr. Boone insists, in the mountainous terrain of southwestern Pennsylvania, western Maryland or West Virginia, areas where 15 new projects have been proposed. If all were built, 750 to 1,000 giant turbines would line the hilltops, most producing, on average, enough electricity to power 600 homes.

Wind projects are in the midst of a huge growth spurt in many parts of the country, driven by government incentives to promote alternatives to fossil fuels. But Mr. Boone, who wields a botanist's trowel and a debater's knife with equal ease, wants to slow them down with community activism, regulatory action and legal challenges.

Politics & Utility Rates in MD

Baltimore Sun:
Baltimore Gas and Electric Co. is learning that political storms can strike as suddenly as those Mother Nature serves up.

Hours after it posted instructions for how its residential customers could "opt out" from a plan that would spread out, with interest, the 72 percent rate increase effective July 1, the company learned of Gov. Robert L. Ehrlich Jr.'s call for a special legislative session to address the issue - bringing new uncertainty.

ACLU Questions AT&T Merger

The New York Times:
The American Civil Liberties Union asked the Federal Communications Commission yesterday to withhold approval of AT&T's acquisition of BellSouth until it reviews allegations that the companies gave customer records to the government without warrants.

In its filing, the A.C.L.U. cited a provision in the Telecommunications Act that says that in considering a merger, the commission must "weigh the public-interest harms of the proposed transaction against the potential public-interest benefits."

The group said the F.C.C. should determine if AT&T and BellSouth handed over phone records to the National Security Agency's surveillance program and, if so, whether that violated any privacy laws.

Monday, June 05, 2006

Vinson & Elkins

Was Enron's law firm, Vinson & Elkins, as blind to the company's shenanigans as it maintains? Internal messages reviewed by BusinessWeek suggest the firm doubted the legitimacy of some of Enron's business practices

American Water vs. FLOW
Last year, Felton, Calif., a community of 6,000 in the Santa Cruz Mountains, mobilized its troops, went up against California American Water, a subsidiary of American Water Works, and won the first round in an effort to acquire its local water system.

Over three months, 60 volunteers visited every house in Felton three times, answering questions about why the water company should be publicly owned and what the financial impact of such a move would be.

California American launched a counter-campaign, saying the company was a good corporate citizen that delivered a good product and that property owners wouldn't save any money if the water district was publicly owned.

In the end, the community overwhelmingly voted to impose a property tax of between $600 and $700 per property owner to raise money to finance condemnation of its water system.

The same themes -- a wronged corporation defending itself and a band of citizens struggling against deep corporate pocketbooks -- have become standard in campaigns and water battles in towns across the country.

Maryland LNG

The Baltimore Sun:
While pledging support for eastern Baltimore County residents fighting a plan to build a liquefied natural gas terminal on Sparrows Point, Gov. Robert L. Ehrlich Jr. told those same activists yesterday that he was disappointed that they had asked for a state ethics inquiry into the work of his personal attorney...

Many Dundalk residents have vowed to fight the plans by global power supplier AES Corp. to build a $400 million LNG terminal at the site of the former Bethlehem Steel shipyard.

The residents have gained the support of elected officials at all levels of government but have questioned the depth of the governor's opposition, given that his personal attorney has worked on behalf of owners of the shipyard property.


Andrew Ross Sorkin of the New York Times' DealBook:
THE world of mergers and acquisitions sometimes requires a suspension of disbelief and even a purposeful lapse in rational thinking. But last week, two midsize energy companies, Mirant and NRG Energy, lost their marbles.

Hurricane Season & Natural Gas

Energy Biz Insider:
The winter scare is over. But a summer storm could tip the nation's natural gas balance. The concern is over whether a devastating hurricane such as the one experienced last summer could happen again. Right now, there's enough natural gas in the supply chain to meet expected demand. But, a heated summer compounded by natural disasters could put a crimp in the system that could result in exacerbated prices.

Friday, June 02, 2006

Private Foreign Ownership

Chicago Tribune:
For many towns across the country, it once seemed like a good idea to have municipal water utilities in the hands of private companies.

Now, bristling against skyrocketing rates, spotty service and foreign ownership, a number of towns across Illinois and the U.S. are waging fierce battles to regain control of their drinking water. A host of them are fighting [RWE,] a German conglomerate that has snapped up more than 1,800 American water utilities.

Eastern Shore Pipeline Expansion

MSN Money:
Eastern Shore Natural Gas Co., a subsidiary of propane gas supplier Chesapeake Utilities Corp., said Friday that it intends to expand the capacity of a pipeline between Maryland and Delaware through a $93 million project.

McDowell Sworn In at FCC

New Telephony:
The FCC on Thursday became officially rounded out when Chairman Kevin J. Martin swore in the group’s fifth member and third Republican, Robert M. McDowell.

McDowell’s term runs until June 30, 2009.

Gas Pipeline to Northeast

From Bloomberg via the New York Times:
CenterPoint Energy and Duke Energy have proposed a 1,600-mile pipeline to transport natural gas to the Northeast from production areas in West Texas and the Rocky Mountain states to meet growing demand.

The pipeline, an expansion of an earlier plan, would extend from the Waha area, near Midland, Tex., to the Philadelphia area, the companies said in a joint statement yesterday. A 60-day auction will be held to determine interest in the project, which would have the capacity to move as much as 1.75 billion cubic feet of gas a day. No estimate of the cost was provided by the companies.

Exelon-PSEG Still Good

The Newark (NJ) Star Ledger:
Exelon Chief Executive John Rowe yesterday defended the economic merits of its proposed acqui sition of Newark's Public Service Enterprise Group, arguing the $16 billion deal still makes sense for shareholders despite a change in market conditions that has significantly boosted the value of each company.

V&E Pays Enron $30 million
Enron Corp.'s former outside law firm, Vinson & Elkins, has agreed to pay the company $30 million to settle claims of contributing to the failed energy giant's 2001 collapse by signing off on fraudulent or shaky deals.

Constellation Compensation

Baltimore Business Journal:
Thirteen executives at Constellation Energy Group Inc. stand to receive up to a total of $73 million in payouts from company stock and incentive plans if the company's proposed merger with a Florida power company goes through.

Seven of those executives also could reap a share of $27.5 million in cash severance if they are fired after the $10 billion merger with FPL Group Inc of Juno Beach, Fla closes.

The disclosure came in a letter to leaders of the Maryland General Assembly, who made a broad request for information from the Baltimore-based energy company.

Thursday, June 01, 2006

Mirant Sues NRG

Philadelphia Inquirer:
Power company Mirant Corp. yesterday sued rival energy producer NRG Energy Inc., contending that NRG was unfairly rejecting its nearly $8 billion takeover bid.

Atlanta-based Mirant sought a court order in Delaware directing NRG not to obstruct its attempts to acquire NRG. Mirant asserted that NRG is using a "transaction ploy" to turn aside the offer by contending that Mirant is using confidential information from NRG's former financial adviser.

PA PUC OKs AT&T-BellSouth merger

Central PA Business Journal:
The Pennsylvania Public Utility Commission unanimously approved the $67 billion merger of AT&T Inc. and BellSouth Corp. Under the terms of the merger, BellSouth will become a wholly owned affiliate of AT&T. The change in ownership of BellSouth will be seamless for its Pennsylvania customers, who are mainly large businesses, according to the commission. The rates, terms and conditions will remain the same. On March 31, the companies filed a joint application for approval of a merger. While the Communications Workers of America filed a petition to intervene, the union never followed up with a formal objection, according to a statement from the commission.

NRC Approves Exelon Merger

Chicago Tribune:
Federal nuclear regulators on Wednesday approved a merger between Public Service Enterprise Group Inc. and Chicago-based Exelon Corp., but more hurdles remain before the companies can combine. The Nuclear Regulatory Commission's decision allows Exelon to operate the four nuclear power plants in which Newark, N.J.-based Public Service has a majority stake. Other regulatory approval is needed before the merger can be completed. The most contentious could be winning approval from the Board of Public Utilities in New Jersey, where Public Service is the biggest utility.

ConEd in Baltimore

Baltimore Messenger:
Stephen Rosenstein is in the right business. He's full of energy - and energy is what he's selling.

"I spoke to one group last night. I'm speaking to two more groups tonight. I was up at 5 o'clock this morning typing names on an Excel spreadsheet," said Rosenstein, owner of Park Heights-based Maryland Energy Consortium.

Rosenstein, representing Con Edison, is scrambling to hook up with Baltimore Gas & Electric customers who are anxious about a looming 72 percent electricity rate increase July 1.

V&E After Enron

Amid all the carnage that has surrounded Enron's collapse, one player in the drama has remained remarkably unscathed: Vinson & Elkins, the giant Houston law firm that played a central role advising the company throughout its spectacular rise and fall.

NRG Stock Surges

Independent power producer NRG Energy Inc. generated some heat around its own stock Wednesday after rejecting Mirant Corp's $8 billion takeover bid.

Shares of Princeton, N.J.-based NRG soared as much as 19% early Wednesday to hit a new 52-week intraday high of $51.38 that put it among the most actively traded stocks on the New York Stock Exchange. NRG shares finished the session with a 15.7% gain for the day at $49.75.