Electric Power news briefs, July 24
Pennaco Energy Inc. ... Consolidated Edison Co. of New York Inc. ... Air Products & Chemicals Inc. ... El Paso Merchant Energy Co. ... Avista Power LLC ... Portland General Electric Co. ... Virginia State Corporation Commission ... PowerGen PLC ... LG&E Energy Corp. ... Powerspan Corp. ... FirstEnergy Corp. ... Beacon Group ... American Electric Power Co. Inc. ... Calvert Group ... Zero Stage Capital ... Ninotsminda Oil Co. ... AES Gardabani ... TXU
Pennaco Energy Inc. reported the company's net proved reserves have increased 93% since yearend 1999 to an estimated 195.4 bcf of natural gas on July 1, 2000, up from 101.5 bcf on Jan. 1. All of Pennaco's proved reserves are natural gas reserves located in the company's Powder River basin coalbed methane project. Virtually all of the proved reserves added in the first 6 months of 2000 were the result of drilling activities. The present value of estimated future net revenues before income taxes, as of July 1, 2000, totaled $293.5 million, using a 10% discount rate and a June 30, 2000 natural gas price of $3.86/MMbtu. Pennaco also reported the company has purchased a put option which establishes a floor price of $3.10/MMbtu for about 3.2 bcf of production from Aug. 1 through Dec. 31, or about 26% of Pennaco's expected production for the second half of 2000.
Consolidated Edison Co. of New York Inc. has signed a long-term agreement under which Air Products & Chemicals Inc. will supply its facilities with bulk and cylinder gases, including liquid and gaseous nitrogen, hydrogen, sulfur hexafluoride, and a number of other industrial gases and specialty gas mixtures, Air Products said. The multiyear contract, which is expected to generate revenue in excess of $15 million for Air Products, provides all of Con Edison's generating and support facilities�totaling more than 60 delivery locations�with the gas products and services Con Edison requires for production and distribution of electricity.
El Paso Merchant Energy Co., a business unit of El Paso Energy Corp., said it is expanding its commercial platform in the electric power industry by forming EP Power Finance LLC. The new organization expands the financial services platform of El Paso Energy and complements its EnCap Investments unit., the company said. EP Power Finance primarily will focus on power and power-related opportunities in the North American energy marketplace. EP Power Finance will provide subordinated debt and structured financial products to developers and acquirers of merchant power generation assets. The group will offer debt capital with a higher risk-return profile for transactions that range from greenfield development projects to the acquisition of multi-asset generation portfolios, according to El Paso.
Avista Corp. subsidiary Avista Power LLC will build a 280 Mw combined-cycle gas turbine power plant at the Coyote Springs site near Boardman, Ore, the company reported. The rights for the project were purchased from Enron North America and Portland General Electric Co. The Coyote Springs 2 project will be built adjacent to the site of Coyote Springs 1, a similar gas turbine project completed in 1995, owned and operated by Portland General Electric. Coyote Springs 2 will be owned by Avista Power LLC and operated by Portland General Electric under a 15-year contract. Terms of the agreement were not released. Completion is scheduled for June 2002.
The Virginia State Corporation Commission (SCC) has approved the merger of PowerGen PLC and LG&E Energy Corp. The merger of the two energy companies means PowerGen will indirectly control Kentucky Utilities Co., a subsidiary of LG&E that operates in Virginia as Old Dominion Power Co. Under the agreement , an average investment of $2 million/year will be made for the next 5 years to improve transmission, distribution, and general electric plant in the company's service territory in Virginia. The US Securities and Exchange Commission must still approve the merger.
Powerspan Corp., New Durham, NH, reported the company has closed on over $26 million in new financing from a group of investors, including FirstEnergy Corp., the Beacon Group, American Electric Power Co. Inc.(AEP), Calvert Group, and Zero Stage Capital. Investments in Powerspan by AEP and others will be used to accelerate product development and commercialization of Powerspan's patented Electro-Catalytic Oxidation (ECO) technology for coal-fired power plants, the companies said. ECO provides the functionality of four separate control technologies into a single integrated system and produces valuable by-products that become the feedstock for other industrial processes, the companies reported. In pilot testing, Powerspan has reported significant reductions in nitrogen oxides, sulfur dioxide, particulate matter, mercury, and other emissions.
CanArgo Energy Corp., Calgary, said its wholly owned subsidiary, Ninotsminda Oil Co. (NOC), has executed a binding participation agreement with AES Corp. unit AES Gardabani. Under the agreement, AES Gardabani will earn a 50% interest in identified prospects at the Cretaceous stratigraphic level by funding a portion of the cost of a three-well exploration program on CanArgo's Ninotsminda license in the Republic of Georgia. The first well of this three-well program will be N97 (C1) which is expected to commence next week. In the event of a successful exploration program, the agreement mandates a long-term gas sales contract to units 9 and 10 of the Gardabani thermal power plant, recently acquired by AES. NOC already has a contract to supply gas to the Gardabani plant from the shallower Middle Eocene reservoir in its producing Ninotsminda field.
TXU Energy Services, a unit of TXU Corp., Dallas, has selected Enermetrix.com Exchange, Maynard, Mass., as it energy e-commerce platform to serve US customers. TXU, a global investor-owned energy services companies with assets of more than $40 billion, delivers energy to 9 million customers, primarily in Texas, the UK, continental Europe, and Australia.