Electric Power news briefs, October 17

National Fuel Gas Co. ... Reliant Resources Inc. ... FirstEnergy ... Public Service Co. of New Mexico ... San Juan Coal Co. ... Tucson Electric Power ... CMS Energy Corp. ... Fortis Inc. ... Magnum Hunter Resources ... Oneok Resources Co. ... TotalFinaElf ... Electricit�e France ... Texaco Inc. ... National Electric Power Authority ... Eskom ... Enron Corp. ... Chevron Corp. ... Calpine Corp. ... Seminole Electric Cooperative Inc. ... City Gas Co. of Florida ... Utility Engineering Corp.


National Fuel Gas Co., Buffalo, NY, said after a review of its derivative positions it has determined it will report a $3.5 million aftertax gain from derivative activities of its retail marketing subsidiary, National Fuel Resources Inc.(NFR) for the 2000 fiscal fourth quarter ending Sept. 30. The company also said at Sept. 30 it accrued a loss contingency of $1.6 million aftertax on the unhedged portion of fixed-price natural gas sales contracts entered into by NFR for fiscal year 2001.The company also stated that its previously reported third quarter income would decrease by $5.4 million aftertax due to the reclassification of NFR's derivative instruments from hedges to mark-to-market instruments. Accordingly, the company is restating its previously reported third quarter net income to $9 million, compared with the $14.5 million previously reported. National Fuel said anticipates fiscal 2000 earnings to be $3.20-$3.30/share, or net income of $125 million-$129 million.

Reliant Energy Inc. said its wholly owned subsidiary Reliant Resources Inc. has filed a registration statement with the US Securities and Exchange Commission for the previously reported initial public offering of Reliant Resources common stock. The deal is expected to raise about $1.3 billion. Reliant Resources, Houston, is a provider of electricity and energy services with a focus on the competitive segments of the electric power industry in the US and Europe. Goldman, Sachs & Co. and Credit Suisse First Boston will act as colead managers.

FirstEnergy Corp. reported net income of $198.2 million, or 89�/share for the third quarter 2000, up from net income of $185.8 million, or 82�/share in the third quarter of 1999. For the 9 months ended Sept. 30, 2000, net income was $473.7 million, or $2.12/share, compared with $447.9 million, or $1.97/share, for the nine months ended Sept. 30, 1999. Improved earnings results reflect the addition of nearly 30,000 new electricity customers in FirstEnergy's regulated service area during the 9- month period, and a near tripling of power sales to customers in unregulated energy markets, including Pennsylvania, New Jersey and Delaware, the company said.

PNM, Public Service Co. of New Mexico said it has negotiated a revised agreement with the coal supplier for San Juan generating station that is expected to save PNM $400 million-$500 million in fuel costs over the next 17 years. Under the agreement between PNM, San Juan Coal Co. and Tucson Electric Power Co., which also owns a portion of the generating station, San Juan Coal Co. will replace the two surface mining operations that now supply the plant with a single underground mine which is expected to provide a higher quality coal at a lower cost per ton. The mine is scheduled to be in full production by November 2002.

CMS Energy Corp. said it sold 11 million primary shares of common stock for about $305 million Tuesday. With the new issue, CMS Energy has about 120.9 million common shares outstanding. The shares were sold in a block trade to Credit Suisse First Boston. CMS said proceeds will be used to repay debt.

Canada's Fortis Inc. said it has closed its public offering of 1.5 million common shares for gross proceeds to the company of $51.6 million. The offering was underwritten by Scotia Capital Inc. and CIBC World Markets Inc. The company has granted the underwriters an option to purchase up to 225,000 additional common shares at $34.50/share prior to Nov. 16 to cover overallotments.

Magnum Hunter Resources Inc. said it received net proceeds of $20.6 million from Oneok Resources Co., a wholly-owned subsidiary of Oneok Inc., through the voluntary exercise of 100% of their public warrant shares at an exercise price of $6.50/share. Through the exercise of these warrants, Oneok Resources Co. has increased its current ownership interest from approximately 32% to 38% of Magnum Hunter's outstanding securities.

Two years after signing a protocol for the integrated gasification and combined cycle (IGCC) project to be carried out by TotalFinaElf (TFE), Electricit�e France and Texaco Inc. on TFE's Gonfreville refinery site in Normandy, the three partners are now studying a possible realization of the 4 billion franc project in two stages. The first would involve a cogeneration plant to produce steam and electricity from natural gas at a cost of some 1.5 billion francs. In the second stage the gasification of the refinery's heavy oil cuts to produce hydrogen, steam, and 450 Mw of electricity would be carried out as initially scheduled using Texaco's conversion process for heavy fuel oil.

Nigeria's state-run National Electric Power Authority (NEPA) has reached an agreement with South Africa's power giant Eskom to rehabilitate NEPA's transmission lines and participate in the execution of transmission line projects in Nigeria. Eskom will also refurbish some hydroelectric dams in northern Nigeria. Olusegun Agagu, minister of power and steel, told Eskom the government is also prepared to formalize concrete agreements with Eskom to facilitate both countries' drive to achieve "remarkable" growth in their national economies.

Enron Corp. is seeking $135 million in order to proceed with Phase II of the 2,450 Mw power project at Dabhol, India, near Ratnagiri, in southern coastal Maharashtra. A 15% equity state was originally offered to the Maharashtra State Electricity Board (MSEB), but the board was unable to meet its commitments due to fiscal constraints, sources said. Enron already holds a 50% stake in the project and is not permitted under Indian rules and lender agreements to increase its equity holdings, said Wade Cline, India's chief operating officer for Enron India. Enron has appointed Credit Suisse First Boston to scout for a suitable partner.

Chevron Corp. is negotiating to purchase majority stakes in three natural gas-fired independent power producer (IPP) projects having generating capacity of 1000 Mw with a view to acquire at least 30% ownership. Jay Pryor, managing director of Chevron Offshore (Thailand), the local unit of Chevron, revealed that the move to expand the gas interests in Thailand forms part of a strategy to take advantage of deregulation of the country's power and natural gas industries and a growing gas market. He said deregulation will lead to opportunities in areas such as transmission, distribution, and power generation. Pryor declined to name the three IPP sponsors which the firm is negotiating with, but said he hopes a deal will be struck by the end of this year.

Under an agreement between Calpine Corp. and Seminole Electric Cooperative Inc., Tampa, Fla., Seminole will have access to all the output from Calpine's proposed 540 Mw Osprey power station facility, Auburndale, for a period of 17 years, beginning with the plant's projected commercial operation date of June 2003, Calpine reported. The terms of the agreement are reviewable by the parties every 5 years. The contract, which commits all of the plant's output to the Florida market, will support Calpine's petition for determination of need, which is currently pending before the Florida Public Service Commission with hearings scheduled Nov. 29.

City Gas Co. of Florida, a division of NUI Corp., has received approval from the Florida Public Service Commission to increase its annual base rates $1.64 million effective Nov. 16. The monthly bill for an average residential customer using 20 therms/month of gas is expected to increase $1.44, from $27.33 to $28.76. A decision on the remaining $5.56 million in requested reimbursement is expected by Jan. 16, 2001, the company said.

Utility Engineering Corp., Amarillo, said it acquired Proto-Power Corp., an engineering services and consulting firm at Groton, Conn. Proto-Power will be a wholly owned subsidiary of Utility Engineering. Proto-Power employs approximately 150 people. Terms were not disclosed.

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