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Co-sponsors Aquila and ArcLight Capital Partners are looking to raise a $200 million project level loan to fund the acquisition of the Lodi Gas Storage facility in Northern California. Co-bookrunners DZ Bank and Union Bank of California have begun sounding out banks on taking co-arranger slots, according to one market official. Aside from having the rarity value of gas storage paper, the twist in the deal is that it resembles a power plant financing in that it has a long-term tolling structure. These facilities typically have short-term tolling agreements, says one banker. A spokeswoman at Aquila and bankers at DZ declined comment. Calls to UBoC were not returned and ArcLight officials in Boston could not be reached.

The Comision Federal de Electricidad, Mexico's national power company, has awarded Iberdrola the rights to build, own and operate La Laguna II, a $350 million 500 MW thermoelectric project in the state of Durango. The Spanish utility beats rivals Union Fenosa, Electricité de France, Enel, AES and TransAlta that also bid for the project (PFR, 6/3), according to a project financier familiar with the matter. Officials at the CFE and the power companies did not return calls or declined comment.

Reliant Resources is looking to refinance $1.93 billion in two Orion Power non-recourse loans with a structure that cross-collateralizes the stronger New York project with its Midwest counterpart, say bankers familiar with its plans. Financiers involved in either of the two mini-perm transactions have been told to expect terms of the new deal to be released at the end of this month or the beginning of September. The rattled Houston power player has been looking for some time at ways to refinance the $1.2 billion Orion Power Midwest project loan, which matures in October, and the $730 million Orion Power New York facility that matures two months later. The initial plan was to refiance the debt at the corporate level, but this strategy was abandoned once Reliant Resources became embroiled in the round-trip trading scandal (PFR, 6/23).

Dan Gordon, former head of the Merrill Lynch U.S. power and natural gas trading team snapped up by Allegheny Energy for $490 million last year, is stepping down from the top trading job at the Hagerstown, Md., player. Allegheny last week announced it is paring back its trading effort and will focus on leveraging its Midwest and Mid-Atlantic assets. Gordon is stepping down from his role as president of global markets and will become a strategic advisor. He will advise on downscaling the operation and also on the legal action related to the company's long-term California contracts, says spokeswoman Janice Lantz. California has been looking to re-negotiate a number of contracts signed at the height of its power shortage. Lantz says Allegheny is not among the counterparties that have re-negotiated. Calls to Gordon were not returned.

Tractebel North America's initial price pitch of 1 3/8% over LIBOR on its planned $1.6 billion non-recourse plant financing is leaving project lenders unimpressed. They say the spread is out of line with where the power project finance market now stands. Indeed, they say the question isn't whether the deal will be done at that price, because it won't, but rather how much pricing will have to be jacked upwards.

The City Public Service of San Antonio in Texas is looking to issue $516 million of electric and gas system revenue and refunding bonds and will use part of the proceeds to pay down existing debt. Karl Pfeil, an analyst at Fitch Ratings in New York, says the proceeds will also be used to replenish its coffers after spending $150 million in cash over the last 18 months to upgrade its transmission and distribution assets. Calls to officials at CPS were not returned by press time.

Richmond, Va.-based Dominion Energy reportedly has entered merger discussions with Allegheny Energy, the second time it has seriously courted the Hagerstown, Md., company in two years. Wall Street bankers and analysts who have spoken to Dominion about its plans say it has set the ball rolling again now to take advantage of Allegheny's depressed share price and the general downturn in the wholesale energy market. Over the past three months Allegheny's stock price has plummeted more than 50% to around $19. A tie-up between Dominion and Allegheny would create a $19.1 billion energy concern, given their current market values of $16.7 billion and $2.4 billion, respectively.

Brian Senior, managing director and head of energy trading and asset management at U.K. utility Innogy, has been allotted the top power trading post at RWE Trading. John Wilkinson, a spokesman at Innogy, says that following the Swindon-based utility's merger with RWE, Senior will mix his time between running Innogy's U.K. energy desk and RWE Trading's German and European power book. Senior was out of the office on vacation last week and could not be reached for comment.

Deutsche Bank and Bank of Tokyo-Mitsubishi are struggling to arrange some $400 million in financing for the construction of two combined-cycle gas turbine plants being developed by Spanish utility Union Fenosa, says a banker familiar. The plants, dubbed Tuxpan III and IV, will have 938 MW of combined generation capacity and are located in the state of Vera Cruz, Mexico.

Bonds Issue Date Maturity Issuer Amount Offer Price Type of Security Coupon (%) Spread To Treasury Moody's S&P Bookrunner(s) 8/2/02 8/9/17 EDP Finance 312.2 98.936 Fxd/Straight Bd 6.625 180 A2 A+ Deutsche/Goldman/UBS 8/6/02 2/13/04 RWE 49 100.045 Mdm-Trm Fl Nts Floats - A1 A+ Lehman M&A Date Date Effective Target Name Target Advisors Target Country Acquiror Acquiror Acquiror Country Value ($mil) Announced Advisors 8/1/02 - Gelsenwasser (E.ON) - Germany RWE - Germany - 8/1/02 - Kraftwerk Laufenberg(Watt AG) - Switzerland Enalpin - Switzerland - 8/2/02 - Blackstone Station - U.S. Harvard University - U.S. 14.6 8/5/02 8/5/02 Electricity Direct - U.K. British Gas Trading(Centrica) - U.K. 98.916 8/5/02 8/5/02 Thuega - Germany E.On - Germany - 8/5/02 8/5/02 Zeag Zementwerk Lauffen Dresdner Kleinwort Benson Germany Energie Baden-Wuerttemberg AG - Germany - 8/6/02 - Nordvestjaellands Energi - Denmark NESA - Denmark 337.664 Source: Thomson Financial Securities Data Company. For more information, call Rich Peterson at (973) 645-9701.