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Tony Gordon, a managing director in Goldman Sachs' London-based energy group, has left the firm. Gordon had been charged with seeking out hard assets in the European power sector, say market watchers, who add his departure could signify a change of strategy for Goldman. Calls to Gordon, who left the firm earlier this summer, and Isabelle Ealet, managing director and head of commodities, were not returned.

Some 60 energy trading officials gathered in Houston last Monday and Tuesday for The Center For Business Intelligence's inaugural Current Challenges in Energy Trading Conference. With sentiment among energy traders becoming decidedly bearish in the wake of recent cutbacks, industry players tackled the key issues of credit, clearing and risk, against the usual backdrop of consultants sniffing for business. Senior Reporter Peter Thompsonfiled the following stories:

* Soup-like humidity, temperatures in the 90s and midday thunderstorms gave local attendees the chance to impress the out-of-towners with their best Pythonesque routines. "This is mild," was the definitive phrase for the networking breaks. "If you can see the other side of the road, it ain't raining," one Houston local said of the midday downpours, which clearly weren't in the Texas big leagues.

Four companies are preparing to submit technical and commercial bids to India's state-owned transmission company, Power Grid Corp. of India (PGC), in August to build a $100 million transmission project, according to a PGC official in New Delhi. The companies are BSES India, Tata Power, Kalpadaru India in association with Malaysian utility Denaga National Berhab, and Emirates Trading Agency in association with Korean utility KEPCO. The winning bidder will provide financing for the project, which is expected to take around three years to construct. The PGC hopes to activate another seven transmission projects once the Dina-Nagda-Dehgam project is underway, the official adds.

Dominion Energy has held preliminary discussions with Dynegy about buying Northern Natural Gas, the U.S. pipeline it acquired from Enron only last November for $2.45 billion, says an official familiar the matter. However, he played down the chance of any sale being reached. He says talks between the two companies have not progressed far and adds Dominion's initial offer has not proved rich enough for Dynegy.

Commonwealth Edison plans to use the proceeds from a $200 million offering of 10-year first-mortgage bonds to refinance an equal amount of first-mortgage bonds that mature July 15. According to a banker involved in the deal, Commonwealth Edison was able to shave 2.35% off the coupon by refinancing. Trent Frager, a spokesman at ComEd in Chicago, declined to comment.

Energy traders are turning to the derivatives market to hedge against the risk of counterparties going bust, driving them to consider everything from credit default swaps to equity puts on counterparty stock. "In the past we relied on corporate guarantees. What we are looking at [now] is derivatives," said Frank Hilton, chief credit officer at American Electric Power, on his company's approach to dealing with potential defaults. PG&E National Energy Group has also been active in tapping Wall Street dealers on default protection prices, according to Bachar Samawi, v.p. of trading, though he said the cost of protection is holding back many trades. Both were speaking at the Current Challenges in Energy Trading conference in Houston last week.

Lead arrangers Citibank and Mizuho Financial are putting the final touches to a $210 million long-term non-recourse loan being used to help finance the construction of Altamira (495 MW), a $300 million combined-cycle gas-turbine plant in northeastern Mexico. A New York project financier says project sponsors Electricité de France (51%) and Mitsubishi (49%) should receive the construction funds next month. The financier adds that Bank of Tokyo-Mitsubishi and ING Barings have come on board as co-arrangers, but declined comment on their commitment levels. Calls to bankers at BoTM, ING, Citibank and Mizuho were not returned. Officials at EdF and Mitsubishi also did not return calls.

Market participants are viewing the emergence of new clearing platforms as a primary solution to the issue of counterparty credit risk presently undermining energy trading, but determining which platforms will emerge as the industry standard is still shrouded in doubt, they say.

Houston-based Reliant Resources, the unregulated and partially floated affiliate of Reliant Energy, has begun shopping itself, says a Wall Street banker who has spoken to senior management about its plans. He adds the independent power producer hopes to find a buyer following a full spinoff, which is expected to occur shortly. The banker says the recent series of body blows to Reliant Resources--notably its admission of engaging in round-trip power trading, its struggle to replace or extend existing bank debt and its tumbling share price--prompted it to seek a buyer. As of last Thursday, Reliant Resources' share price stood at $8.28, a fraction of its $28.60 52-week high and not far off its $7.28 low. It has a market capitalization of $2.4 billion.