Utilities

QUIZ

On average, how much does the price of natural gas effect the price of electricity and why?

(Scroll down for answer)

Energy Companies Exit Trading, Banks Enter

There has been talk on the street that big banks would fill the void of energy companies bolting the energy trading business. In addition, speculation has it that big banks would not only take over trading operations, but would likely snatch up physical energy assets, such as power plants, transmission lines and gas pipelines. Bank of America is the latest large financial institution continuing to drive those speculations. The Charlotte-based bank, the nation's third largest, announced in October it had filed with the FERC for permission to trade wholesale electricity. The request, certainly one that would have been turned down quickly only two years ago, is expected to meet with FERC approval.

Kentucky Governor Says Slow Deregulation

Kentucky Gov. Paul Patton, chairman of the National Governors Association, as well as other Southern governors, maintains that a proposal by the Federal Energy Regulatory Commission to force deregulation nationwide will result in higher energy prices in the South. Patton said before a U.S. Senate Committee that met in October that the FERC proposal will penalize states in the South that have low-cost electricity to benefit states outside the South that do not provide low-cost power. The FERC proposal is known as a Standard Market Design that is designed to develop a national power grid operated by regional groups. It will ultimately, according to Southern governors attending the hearing, result in higher energy costs in the South and lower energy costs outside the South, or, better described as a leveling of the playing field in the cost of power throughout the U.S. Every year hundreds of companies locating in the South, especially heavy users of power, cite the South's low-cost of energy in their decision.

Publication Touts Four Southern Utilities

Site Selection magazine has named Richmond-based Columbia Gas, Atlanta-based Georgia Power, Louisville-based LG&E and Raleigh-based Progress Energy to its Top 10 Utilities for Economic Development. Those were the only Southern-based utilities to make the top 10. The magazine based its ranking on the number of jobs created and new capital investments made in the utilities' service areas in 2001.

Duke Scraps, Suspends Plant Building

Charlotte-based Duke Energy is suspending or cutting up to $2 billion in planned power plant construction. The utility has scrapped a $500 million power plant planned for New Mexico, a $300 million plant in Illinois and a $180 million facility in Florida. Duke has suspended construction of another plant in New Mexico and one in Washington State. Both facilities were approximately 40 percent complete. Finally, the company has eliminated weekend and overtime work on a plant it is building in Nevada. Almost all of Duke's suspended or scrapped plants are in the Western U.S. Two plants being built in the Eastern U.S., a $400 million facility in Pennsylvania and a $600 million plant in Ohio will start up as planned next year.

TECO Energy Suspends Plant Construction at Two Sites

Tampa-based TECO Energy has suspended construction on a pair of gas-powered power plants in Arkansas and central Mississippi. A spokesperson for TECO said the company would resume building on the plants once power prices increase.

FPL Group Spends $800 Million for Nuclear Facility

Florida-based FPL Group has agreed to purchase an 88.2 percent interest in the 1,161-megawatt Seabrook Station nuclear plant located in New Hampshire. The transaction gives FPL Group more than 3,000 megawatts of power generation assets in the Northeast.

Progress Energy Signs Peak Power Agreement with Duke

Duke Power and Progress Energy, two large North Carolina-based utilities, recently signed an agreement in which Progress will provide peaking generation capacity to Duke. The power, when needed, will come from Progress Energy's Rowan Energy Complex located north of Charlotte. The contract runs from June 1, 2004 to May 31, 2008.

TVA Rates to Remain Unchanged

The Tennessee Valley Authority, which provides much of Tennessee's power and power to six other Southern states, will keep electricity rates this year the same as last year. The announcement marks the fifth consecutive year the nation's largest public utility will keep rates firm.

Florida Power to Cut Electricity Rates

In April, officials with Florida Power cut rates to its customers by nine percent. In fact, on May 1, Florida Power reduced electricity prices for the company's almost 1.5 million customers to a level that's 10 percent lower than the national average. Now the company is reducing rates for the second time this year. Next month the company will reduce rates that will show a decrease from $91.65 for 1,000 kilowatt-hours to $80.58 in just one year. Florida Power is a subsidiary of Raleigh-based Progress Energy.

QUIZ ANSWER

On average in most states, the cost of natural gas makes up roughly one-third the cost of electricity. Why? Much of the electricity produced today is generated by natural gas-fired plants