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Duke Energy is actively looking to acquire natural gas-fired assets or a pipeline in the southeast region of the U.S. as part of the company's strategy to take advantage of low asset valuations in the energy sector, said Richard Sherrill, coo. "We have been looking to expand our southeast regional portfolio for some time because we believe it has the best prospects and it now seems to be the right time," Sherrill explained. Duke currently owns and operates seven gas-fired facilities in the region that have a combined capacity of 4,650 MW.

Arlington, Va.-based AES is considering some form of equity offering as part of a plan to raise an additional $1 billion in cash by year-end 2003. Newly installed CEO Paul Hanrahan said during an investor conference call June 19 that in addition to asset sales, the company will consider issuing equity to meet the $1 billion target. A timetable or size has not been set, nor is there a definite commitment to issue equity. Hanrahan, who replaced longtime CEO Dennis Bakke, says the company's priority is to increase liquidity and achieve an investment-grade rating within three years.

Banc of America Securities' held its annual Energy & Power Conference at The Palace Hotelin New York on June 17-19. Some 200 executives, analysts and bankers from the utility, oil and gas sectors, attended. Reporter Amanda Levinfiled the following stories:

Dearborn, Mich.-based CMS Energy has inked an extension until July 12 on a $450 million revolver that expired last Monday. A planned new 364-day facility stalled in syndication (PFR, 6/17) after CMS became entangled in the round-trip trading fiasco. Barclays Capital, Bank One, Bank of America, Citibank, J.P. Morgan and Union Bank of California, who are all in the original facility, agreed to the extension, says John Barnett, a CMS spokesman. He was unable to provide details on the terms. CMS wanted the extension to give it more time to renegotiate terms on the replacement facility.

DTE Energy is set to tap the convertible and common stock market for some $350 million within the next few weeks to give it room to pursue expansion opportunities. Scott Simons, a spokesman in Detroit, says the offering will give DTE greater balance sheet flexibility to pursue its growth objective through buying or building energy assets. He adds the issuance, which is formally earmarked to take down short-term debt, is also in line with the objective of maintaining a solid investment-grade rating.

Duke Capital Partners, the mezzanine financing unit of Charlotte, N.C.-based Duke Energy, is looking to make a foray into merchant power projects. Gerald Stalun, managing director of the power group, says the unit is looking at a number of merchant opportunities where plants have stalled in construction, or developers have held off construction, because traditional bank financing is no longer available. Anemic forward curves and increasing skittishness over credit quality have ensured a rough ride for the few merchant deals to hit the project finance market this year (PFR, 2/25).

Albany, NY-based Energy East will use the proceeds from a $400 million offering of 10-year notes to repay the entire cash portion of its $1.4 billion pending acquisition of RGS Energy Group, the parent company of Rochester Gas & Electric. Mona Yee, an analyst at Fitch Ratings in New York, says the remainder of the acquisition was funded through a $300 million issuance of common shares and $700 million of debt. New York utility regulators approved the merger in February and the Federal Energy Regulatory Commission approved it last September.

U.S. energy concern Aquila has made a U-turn over plans to shut down its European trading business. Aquila traders told counterparties Thursday morning that it remains committed to the European energy market, note rivals. Just last Tuesday an Aquila spokeswoman told PFR that its London-based trading operations were set to be unwound in an orderly fashion (see earlier Breaking News story).

Bank of America is reportedly planning to launch an electricity trading desk in New York and has hired four former Enron traders to staff the operation. The quartet consists of Rogers Herndon, who heads the team, Gautam Gupta, John Suarez and Paul Broderick, according to market officials. David Mooney, global head of commodities, referred calls to BofAÕs media relations department. Jeff Hershberger, a spokesman in New York, says BofA is not currently a participant in the power derivatives market and does not comment on future business plans. Herndon referred calls to Mooney.

U.S. energy giant Aquila has pulled the plug on its European trading and wholesale merchant operations, as part of a broader plan to retrench to the U.S. and to de-emphasize its trading business globally. Mary Gallagher, head of public relations in London, says the news was broken to staff this morning. "We're not Enron. But we got caught up in the maelstrom. It's been a painful roller-coaster ride these past few months."