WASHINGTON: Stymied in their plans to build new coal-burning power plants, American utilities are turning to natural gas to meet expected growth in demand, risking a new spiral in the price of that fuel.

Utility executives say they have little choice. With opposition to coal plants rising across the United States, they see plants fired by natural gas as the only kind that can be constructed quickly and can supply reliable power day and night.

But North American supplies of natural gas will be flat or declining in coming years, according to the Energy Information Administration. The United States already has high prices for natural gas, a problem that has hurt homeowners and many industries, like chemical and fertilizer producers. Some experts fear that a boom in natural gas demand for electrical generation will send prices even higher.

It has happened before: The price of natural gas tripled in the late 1990s and early in this decade, partly because so many companies built generators to use the fuel. In some places, the power plants became white elephants as higher gas prices made them too expensive to operate, compared with coal plants.

Now, with many coal plants being canceled and demand for electricity rising by 2 percent or so a year, utilities may be forced to build and use a new generation of gas-fired plants regardless of the operating cost - and consumers will bear the burden of higher electric rates.

“Coal has been removed in many places as an option,” said Art Holland, a vice president of Pace Global Energy Services, a consulting firm in Washington that advises utilities.

New nuclear plants are on the drawing board but will take at least a decade. Sun and wind power, though growing, remain a small part of the electricity mix in the United States, and they provide only intermittent power.

“Were having by default to fall back on gas, as though we learned no lesson from the gas-fired boom,” Holland said.

A wave of public opposition to coal-burning plants, motivated partly by broad fears about global warming and partly by local aesthetic concerns, is making their construction more difficult. Wall Street weighed in on Monday: Three big investment banks announced that in deciding whether to make loans for new coal plants, they would calculate the projects financial viability, taking into account potential future charges for carbon dioxide emissions.

Citigroup, JPMorgan Chase and Morgan Stanley said they had negotiated this policy with seven major utility companies, most of them major coal burners, and two advocacy groups, the Natural Resources Defense Council and Environmental Defense.

Power generated with natural gas is already sold at a premium. In Florida, for example, where five coal projects have been derailed in the last year, Barry Moline, the executive director of the Florida Municipal Electric Association, looks at Tallahassees municipal utility as an indicator of the future.

It is nearly 100 percent gas-fired, he said, while Gulf Power, to the west, is 70 percent coal. Tallahassees electrical rates are about 40 percent higher than Gulf Powers.

Companies that have canceled coal plants have two immediate options other than building gas plants. They can work to hold down customer demand, though most would have to do so on a far more ambitious scale than before. Or they can wait to see what happens.

Experts say electricity shortages are a distinct possibility in coming years.

“Theres going to be a lot of white knuckles, frankly, as building does not go forward aggressively on any kind of plant, and demand keeps going up,” said Ernest Moniz, a physics professor at the Massachusetts Institute of Technology and a former under secretary of the Department of Energy.

Government statistics lag too much to have captured the shift toward gas-fired power plants, but anecdotal evidence abounds. Tampa Electric in Florida, Pacificorp in Wyoming and Utah and Southwestern Power Group in Arizona are among the companies planning or studying gas-fired plants.

Coal companies, while acknowledging some high-profile plant cancellations, say they expect continued growth in coal-fired generating capacity, albeit at a more moderate rate. Pace, the consulting firm, recently cut by a third its projection for new coal-fired generating capacity between now and 2025, while doubling its estimate of the amount of gas-fired capacity likely to be built.

“Prior to 2007 there was a build-up, and a momentum for people planning to go in the direction of pulverized coal-fired plants, and during 07 there was definitely a downturn,” said Ronald Ott, the director of coal plant construction at Black Veatch, an engineering and construction company specializing in electrical projects. Amid concern about coal emissions linked to global warming, he said, his companys clients have tripled the number of natural-gas projects under discussion.

WASHINGTON: With Democrats in a strong position to win the White House after eight years of Republican rule, antitrust lawyers say any controversial corporate deals should be announced soon if they hope to get approval before next January.

Even relatively uncontroversial deals may face delays as senior antitrust regulators leave the Bush administration as the election approaches.

The head of the U.S. Federal Trade Commission, Deborah Majoras, has already said she will depart this month. The FTC and the Justice Department combine efforts to enforce antitrust law.

Phillip Zane, who specializes in antitrust matters for the law firm Baker Donelson, said that a Democratic administration was likely to take a tougher line on merger reviews than the Bush team.

“If I had any sort of close deal, Id rather have it go now,” Zane said. “It may be that some of the airline deals are close deals.”

Record fuel prices and a weakening economy are pressing large U.S. airlines to consider consolidation. Last week, pilots at Delta Air Lines and Northwest Airlines revived conversations on merging their contracts, a crucial step if the carriers are to proceed with merger talks.

A big airline merger would get antitrust scrutiny but could be hard for regulators to challenge, said Evan Stewart, an antitrust attorney for the law firm Zuckerman Spaeder.

“The profit margin is just so horrible, the cost of oil and other things, the union cost,” Stewart said. “Some of these companies are in such terrible shape.”

Antitrust experts disagreed about whether Microsofts interest in taking over Yahoo would be a close call for regulators.

Zane said that Republicans and Democrats would probably have a similar view of a Microsoft takeover of Yahoo because of rapid changes in the Internet search and advertising market.

“Traditional Republicans would have taken a very strong view of privacy but the new breed of Republicans” are less concerned, Zane said.

But Stewart disagreed. “Yahoo-Microsoft - thats one thats more likely to have a political overtone to it,” he said.

The last time a Democrat was in the White House, the Clinton administration accused Microsoft of abusing its dominance of the market for computer operating systems.

The FTC under President George W. Bush has thus far declined to go after Intel, which Europe accused of trying to squeeze out its main rival, Advanced Micro Devices. However, Andrew Cuomo, the New York state attorney general and a Democrat, has started an investigation about Intels monopoly power.

Daniel Booker, an antitrust attorney for the law firm Reed Smith, had a different concern. “Thats a transaction that, rather than being worried about approved or not approved, Id be worried that I wouldnt be able to get a decision.”

Thats because senior regulators often leave as a change in administration approaches, slowing down decision-making. Majoras, the FTC chief, said she would leave in late March to join Procter Gamble as general counsel in June.

A new administration will take office in January 2009.

While the pace of deal-making has slowed because of the credit crunch, Bruce McDonald, a lawyer with the Jones Day law firm and a former Justice Department deputy assistant attorney general for antitrust during the current administration, said Democratic and Republican antitrust regulators would come to the same conclusion about the vast majority of mergers.

McDonald said there “may be some difference, but that difference, if much at all, will manifest itself in the marginal case.”

While regulators publicly insist that they press cases that should be litigated, they have lost major painful court fights.

“To some degree you have to take that into account,” said Andrew Gavil, who teaches antitrust law at Howard University. “Its easy to say you should bring more cases, but its also easy to say, Bang your head against the wall. “

Travelers to Britain’s two largest airports are in for a costly shock. Beginning Apr. 1, the British Airports Authority (BAA), owned by Spanish construction company Ferrovial («www.businessweek.com»), has won the right to raise passenger charges at London’s Heathrow and Gatwick airports to help pay the cost of needed infrastructure improvements.

On Mar. 11 Britain’s Civil Aviation Authority (CAA), the industry regulator, announced that BAA can boost charges by 23.5% to 12.80 ($25.65) per passenger at Heathrow, then by an additional 7.5% above the rate of inflation for the next four years. At Gatwick the increases start at 6.79 ($13.58)—a 21% rise over current levels—with charges growing by 2% over inflation until 2013.

The extra fees could come as a blow to airlines and passengers already suffering the effects of record fuel oil and rising ticket prices. But for Ferrovial, whose 2007 net income fell by 48.5% to €733.7 million ($1.1 billion), the additional revenue couldn’t come at a better time. The Spanish company is trying to refinance at least 4.1 billion ($8.2 billion) in debt related to its «www.businessweek.com» (BusinessWeek.com, 6/27/06), which operates seven British airports. The company was recently forced to sell off its duty-free shops, and speculation continues that it may be forced to divest further assets, including possibly an entire airport, to meet repayments on more than $46 billion of net financial debt. Airlines Quick to Condemn

Markets had mixed reaction to the news. Shares in Ferrovial rose as much as 9% on Mar. 11 and closed up 6.6%. But airlines, which will be forced to pass the fees on to passengers via higher ticket prices or take a hit to their profits, fell broadly. British Airways («www.businessweek.com»), which can better absorb the higher passenger fees thanks to its business class and international travelers, was down 1.6%. Low-cost carriers—for which the fees will constitute a much larger chunk of ticket prices—fell more. Britain’s EasyJet («www.businessweek.com») was down 3.3%, while Ireland’s Ryanair («www.businessweek.com»), Europe’s largest airline by passenger load, sank 3.5%.

The airlines were quick to condemn the CAA’s announcement. “Heathrow passengers will pay, on average, 17% more than the [British] competition commission recommended in September, 2007,” said Paul Ellis, BA’s general manager of airport policy and infrastructure, in a statement. “These overly generous charges far exceed what is required to upgrade facilities.”

Industry analysts disagree, saying the extra funds are needed to bring Heathrow and Gatwick up to the standards of their Continental competitors—including everything from speeding up baggage handling to adding additional security lines for reduced waiting times. What’s more, most don’t think the added fees will drive business from Heathrow, still Europe’s No. 1 airport, to competing hubs such as Amsterdam and Paris. Boosting Ferrovial’s Bottom Line

“Flights won’t be cut back just because passengers’ costs have increased,” says Clement Wong, travel and tourism manager at market intelligence firm «investing.businessweek.com» in London. “More investment is needed, particularly as the liberalization of Europe’s airline market takes hold.” The new transatlantic Open Skies agreement, set to take effect «www.businessweek.com» (BusinessWeek.com, 1/14/08), will increase competitive pressure on Heathrow.

The biggest impact of the Mar. 11 announcement likely will be felt by Ferrovial, which is urgently trying to refinance its debt just as market conditions have choked off easy credit. Equity analysts say the additional passenger fees mandated by the CAA will boost Ferrovial’s bottom line, helping it secure refinancing. Citigroup («www.businessweek.com»), for instance, now estimates the Spanish company’s commercial revenues from Heathrow alone will reach 2.13 billion ($4.27 billion) by 2013, compared to 1.38 billion ($2.77 billion) last year.

Finalizing a new debt agreement—now expected to be completed in the second quarter of 2008—can’t come soon enough. Ferrovial’s debt-servicing payments rose from €1.23 billion ($1.89 billion) in 2006 to €1.9 billion ($2.9 billion) last year, predominantly due to obligations associated with the BAA acquisition. To help repay its outstanding loans, the Spanish company has been offloading assets, including its Budapest airport for 1.3 billion ($2.6 billion) in May, 2007, and its World Duty Free business for 546.6 million ($1.09 billion) earlier this month.

To be sure, BAA remains a highly profitable business for its Spanish owner. Operating margins topped 40% last year, and the British-based unit contributed just over half of Ferrovial’s overall pre-tax earnings. By allowing Ferrovial to increase passenger fees at Heathrow and Gatwick, Britain’s aviation regulator has handed the Spanish company a gift. Whether that will be enough to stop further asset sales remains to be seen. But it should lead to some much-needed improvements at Heathrow and Gatwick.