Electric Power news briefs, Nov. 5

Nevada state regulators granted Sierra Pacific Power Co.'s request to increase natural rates by $12.24/month effective immediately. The Las Vegas, Nev., company said it requested the increase in June to counter unprecedented hikes for natural gas paid last winter. The increase covers the increased costs of natural gas from August 2000 to April 2001. Company officials said while gas prices declined during the summer, they were edging back up as the winter heating season approached.

The UK's National Grid Group PLC reported signing a definitive agreement outlining how National Grid will manage the Alliance Transco, including investment of $1 billion in start-up and transmission acquisition costs. The agreement was filed with the Federal Energy Regulatory Commission. Pending two key FERC approvals, the definitive agreement provides that a wholly owned subsidiary of National Grid will serve as the managing member of the Alliance Transco.

The California Energy Commission gave the go-ahead to Valero Refining Co., a unit of Valero Energy Corp., San Antonio, Tex., to build a 102 Mw cogeneration project at the Valero refinery in Benicia. The $100 million plant will consist of two combustion turbine generators. Power generated by the plant will run the refinery, in effect taking it off the state's electrical grid. Excess power will be sold on the open market. Completion of the plant is scheduled by the end of 2002.

The Houston-Galveston Area Council has chosen a unit of TXU Corp., Dallas, as its retail electricity provider, signing an aggregator contract worth more than $200 million, TXU reported. H-GAC is the voluntary association of almost 150 counties, cities, independent school districts, and soil and conversation districts in the Houston/Galveston area. The contract becomes effective in 2002, and terms range from 1 to 2 years.

American Electric Power Co. Inc., Columbus, Ohio, reported completing acquisition of Quaker Coal Co. Under the revised agreement, AEP will pay $101 million for Quaker assets that include surface and coal mining operations and associated facilities and coal reserves in Kentucky and Ohio; coal reserves in Pennsylvania; property interests in Colorado, and royalty interests in West Virginia. AEP also will assume liabilities of $40 million. Separately, AEP said it completed the $270 million purchase of MEMCO Barge Line Inc. from the Electric Fuels Corp. unit of Progress Energy Inc., Raleigh, NC. The acquisition adds 1,200 hopper barges and 30 towboats to AEP�s 605 barges and 15 towboats. The combined business unit will move roughly 50 million tons/year of dry bulk commodities.

The Long Island Power Authority said it installed 55 fuel cells manufactured by Plug Power Inc., Latham, NY, at its West Babylon, NY, substation connected directly to the grid. Presently, 18 of the 55 fuel cells are fully installed and generating electricity for LIPA's grid under a $7 million demonstration project. The fuel cells could produce as much as 1 million kw-hr of electricity over the duration of the program.

Elwood Energy LLC, a joint venture between subsidiaries of Peoples Energy Corp., Chicago, Ill., and Dominion Resources Inc., Richmond, Va., said it closed a $402 million bond issue. The 25-year bond financing of the 1,409 Mw gas-fired facility rests primarily on cash flows whose revenues are derived from three separate power sales agreements, the last of which expires in 2017, the company said. One of the largest independent peaking power generation facilities in the country, Elwood began operation in the summer of 1999.

The Ohio Power Siting Board said it approved construction of a $191 million, 480 Mw gas-fired power plant by DPL Energy LLC, a unit of DPL Inc., Dayton, Ohio.. The plant, to be built near Harrod, Ohio, will be a peaker unit designed to meet power needs during periods of high demand. It is expected to be in operation by summer 2002. The plant will connect to an existing 345,000 v Ohio Power Co. transmission line. A Columbia Gas Transmission pipeline will provide gas for the project.

Palo Verde nuclear generating station's Unit 3 began producing electricity for the western power grid Monday after a 37-day refueling operation, one of its shortest ever, said operator APS, a unit of Pinnacle West Capital Corp., Phoenix, Ariz. The unit's next refueling will be in the spring of 2003. Unit 2 is expected to return to service by midNovember.

PG&E Corp., whose California utility Pacific Gas & Electric Co. was forced into bankruptcy protection due to the state's energy crisis, said third-quarter net income more than tripled to $771 million, or $2.12/share, from $225 million, or 62¢/share, a year earlier. Excluding special items, earnings from operations were $256 million, or 70¢share, compared with $248 million, or 68¢/share, a year earlier. PG&E said operating revenues fell to $6.30 billion from $7.50 billion in the same quarter last year.

Energy trader Aquila Inc., Kansas City, Mo., said net income increased to $37.2 million, or 37¢/share, from $23 million, or 27¢/share, a year earlier. Revenues increased 10% to $8.8 billion from $8.0 billion, said Aquila, which is 80%-owned by UtiliCorp United Inc. Aquila said it acquired interests in six power plants in December 2000 when it purchased the assets of GPU International. Operating results from those projects have continued to be stronger than expected, it said.

Laclede Gas, a unit of Laclede Group Inc., St. Louis, Mo, said residential winter gas rates would decrease 35% or about $54/month, under a proposal pending before Missouri state regulators. The adjustment reflects the actual cost of acquiring gas supplies at the wholesale level, storing them, and transporting them from production fields to Laclede's service area, the company said.

Madison Gas & Electric Co., Madison, Wis., reported filing a registration statement with the Securities and Exchange Commission to create a holding company named MGE Energy Inc. It said MGE will build and own new power plants to meet growing customer needs. Under the holding company proposal, shares of MGE common stock would be exchanged on a one-for-one basis for shares of MGE .