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U.S. Securities and Exchange Commission

SECURITIES AND EXCHANGE COMMISSION

(Release No. 35-27667; 70-10097)

Northeast Gas Markets LLC, et al.

Supplemental Order Amending Previous Order

April 16, 2003

Northeast Gas Markets LLC ("NEGM"), Beverly, Massachusetts, a nonutility subsidiary of KeySpan Corporation ("KeySpan"), Brooklyn, New York, a registered holding company; and KeySpan's utility subsidiaries Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York ("KEDNY"), Brooklyn New York; KeySpan Gas East Corporation d/b/a KeySpan Energy Delivery Long Island ("KEDLI"), Hicksville, New York; Boston Gas d/b/a KeySpan Energy Delivery New England ("Boston Gas") and Essex Gas Company d/b/a KeySpan Energy Delivery New England ("Essex Gas"), both located in Boston, Massachusetts; and EnergyNorth Natural Gas, Inc. d/b/a KeySpan Energy Delivery New England ("ENGI"), Manchester, New Hampshire1 (collectively "Declarants"), filed with the Securities and Exchange Commission ("Commission") a post-effective amendment to a declaration ("EnCana Declaration"), filed under sections 12(f) and 13(b) of the Public Utility Holding Company Act of 1935, as amended ("Act"), and rule 54 under the Act. The Commission issued a notice of the filing of the EnCana Declaration on November 22, 2002 (Holding Co. Act Release No. 27607).

By order dated January 14, 2003 (Holding Co. Act Release No. 27638) ("NEGM Order"), the Commission, among other things, authorized NEGM to provide contract services to the KeySpan Gas Utilities with respect to their gas supplies provided specified conditions were met.

As discussed in the NEGM order, the KeySpan Gas Utilities as well as several gas utilities not affiliated with KeySpan ("Unaffiliated Utilities"), have each entered into contracts with EnCana Corporation ("EnCana") to supply Canadian gas beginning on January 15, 2003 ("EnCana Gas Contracts"). NEGM assisted the Unaffiliated Utilities and the KeySpan Gas Utilities in their negotiation and execution of the new EnCana Gas Contracts. The Unaffiliated Utilities and the KeySpan Gas Utilities also entered into a management service agreement and agency agreement (collectively, the "M&A Agreement") under which NEGM agreed to provide contract services to the utilities for the EnCana Gas Contracts beginning January 15, 2003.

Page 7 of the NEGM Order presently states:

". . . Declarants request authority . . . (B) until March 31, 2006, for NEGM to enter into transactions, under the EnCana Gas Contracts and the M&A Agreement described above, to provide contract services to the KeySpan Gas Utilities with respect to their gas supplies provided the following conditions are met: (1) the price charged to a KeySpan Gas Utility (a) is no greater than the prices that unaffiliated entities pay to NEGM for the same type of contract services and (b) will not be greater than $0.0128 per Mcf with respect to the KeySpan Gas Utilities; (2) the non-price terms of any NEGM gas contract services provided to a KeySpan Gas Utility are the same as those provided to non-affiliated entities obtaining the same type of service from NEGM; and (3) the KeySpan Gas Utility's cost of gas is regulated by its applicable state commission and the utility treats the price paid for NEGM services as a cost of gas." (emphasis added)

The Declarants request that the above italicized clause be removed from the NEGM Order. Declarants state that removal of the italicized language will serve to clarify that the authority for NEGM to enter into contracts to provide contract services to the KeySpan Gas Utilities described above is not limited to the EnCana Contracts and M&A Agreement but rather applies to new contract service arrangements with the KeySpan Gas Utilities through March 31, 2006, provided that the other conditions stated in the NEGM Order are met. This supplemental order deletes from the NEGM Order the italicized clause quoted above.

Further, Declarants request that the reports NEGM is required to file under the NEGM Order ("Quarterly Report Filings") be consolidated into the rule 24 quarterly reports KeySpan makes under its financing order issued on November 8, 20002 ("Financing Order"). Specifically, the Quarterly Report Filings will be filed within sixty days after the end of each of the first three calendar quarters and ninety days after the end of the last calendar quarter, in accord with the Financing Order.

IT IS ORDERED, under the applicable provisions of the Act and rules under the

Act, that the EnCana Declaration, as amended, be permitted to become effective, subject to the terms and conditions prescribed in rule 24 under the Act.

For the Commission, by the Division of Investment Management, pursuant to delegated authority.

Margaret H. McFarland
Deputy Secretary

 


1 KEDNY, KEDLI, Boston Gas, Essex Gas and ENGI are collectively referred to as the "KeySpan Gas Utilities."

2 Holding Co. Act Release No. 27272, as supplemented by Holding Co. Act Release No. 27287 (December 1, 2000).

 

http://www.sec.gov/divisions/investment/opur/filing/35-27667.htm


Modified: 08/05/2003