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To: Oak Tree who wrote (87357)	2/15/2001 10:16:48 PM
From: Second_Titan	Read Replies (2) \| Respond to of 95453

Ooops Looks like CA will be burning less gas than hoped for this Summer. Of course it may be dark in some areas. Generators:No Plans To Build Peaking-Pwr Plants In Calif By JESSICA BERTHOLD OF DOW JONES NEWSWIRES LOS ANGELES -- Major electricity suppliers with experience building power plants in California said Thursday they have no plans to construct new peaking units in the state for operation by summer 2001. Their position raises questions about whether Gov. Gray Davis will be able to get 5,000 megawatts of new power on California's grid by July, a target he announced last week. Davis' plan offers incentives to generators, but it also leaves key issues unsettled, creating uncertainty in the market. And time is short. If the new plants are to come on line, construction will have to begin by mid-March. "We're not going to be able to have any peakers this summer," said Mark Palmer, spokesman for Enron Corp (ENE). "It's not possible physically, and there's no market that would allow plants to be profitable." Davis' plan calls for 5,000 megawatts of additional generation to come on line in the state by July 2001. Roughly half of that power will come from large plants now under construction and from easing environmental restrictions, thus allowing plants currently off line to run as long as operators buy emission credits. The other half will come from peaking generation units - typically small units designed to run only during periods of high demand. The state Independent System Operator has contracts for construction of 1,279 MW worth of peakers. The governor hopes to get 1,000 MW more through an emergency order cutting the permit process from four months to 21 days. But generators say cutting permit time is not enough of an incentive for generators to build in the state. "While the governor's announcement about streamlining the approval process appears attractive on the face of it, there are still problems of creditworthiness and regulatory uncertainty," said Richard Wheatley, spokesman for Reliant Energy (REI). "We have to allocate our equipment for projects which will have the greatest potential to succeed. We don't have any projects that could be on the ground in California this summer." Generators Fear They Won't Recover Investment Generators say they are wary of investing more capital, in part because the state Department of Resources would likely be signing the contracts for the 1,000 MW of emergency power, and they've been burned once already by the DWR. Generators thought the DWR was covering the state's entire "net short" electricity needs in recent weeks. But last week, the agency said it has not been paying for power it deemed unreasonably priced. That means the bills got passed to the state's two investor-owned utilities, which haven't paid their power bills in weeks due to cash and credit problems. Another problem, say generators, is that they don't know what rate of return they can expect from the peakers. The governor's order says the peaker power must be sold only to the DWR and at a "reasonable rate" - but that rate has not been defined. "Exactly how the state determines reasonableness is the key question," said Tom Williams, spokesman for Duke Energy (DUK). Williams added that Duke wouldn't build peakers for the summer, because the company "already has enough risk in that market right now." If the state could guarantee a workable market for power this summer, generators would rush to build in the state, because they'd know they could recover their costs, said Enron's Palmer. But with the state's history of price caps, generators simply see to much uncertainty, he added. A Mirant Corp. (MIR) spokeswoman said the company had not announced any plans to build new peakers. Calpine Corp. (CPN) said it was still considering its options, but planned to concentrate this summer on larger generation projects already under way in California. ISO Peaker Program Also In Jeopardy The ISO peaker program, which has 1,279 MW of projects due on line by summer and currently in various stages of completion, is also in jeopardy due to generators' concerns they won't be paid enough to cover their investment, said an ISO spokesman who helps manage the peaker program. "Credit concerns are a real issue among generators at this point," said Bob Theaker, ISO manager of reliability contracts. "The way our tariff authorizes us to pay generators, we would levy an uplift on people who serve load through the ISO grid - in essence, it comes down to the utilities." Theaker said the governor is still looking into ways that generators would be paid for their peaker contracts, given that the utilities are unable to pay. "A lot of projects are in suspended animation right now as people wait to see how they will get paid," Theaker said. "We don't know how far (the governor's) discussions have progressed, but it's got to be resolved soon because the development and building of these projects requires a 3-4 month lead time." Theaker added that mid-March would be the latest that construction could begin or resume if the state expected to see any power from peakers by June 15.

To: Oak Tree who wrote (87357)	2/16/2001 5:31:04 PM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

Oak Tree - "when everyone thinks things are down is when they are actually about to get better" ... actually; people have been saying that since NAZ 3900-3500 fwiw. The pundits have been calling a tech bottom since April of last year... how about reality: 2900 points down from the top and only 200 up from the bottom for the NAZ ... if that doesn't sober one up - nothing will. We are still at historic valuation multiples - way, way, way over "normal" let alone recessionary valuation levels. The sober arguement can be made - that if we never saw the NAZ over 3000 in the last two years; that THIS - right here, right now - THIS a historic valuation BUBBLE of unprecedented proportions - right here, right now, today at NAZ 2400. Would you like me to pass the smelling salts (VBG) ?

To: Oak Tree who wrote (87357)	2/16/2001 5:36:13 PM
From: isopatch	Read Replies (1) \| Respond to of 95453

Oaktree. WHO is "everybody"??? Recent sentiment surveys DO NOT show everyone is bearish. In fact, just the opposite is the case. There is still far too much complacency and the bull/bear numbers are no where near what has historically occured coincident with important market bottoms. As a few of us have been saying here, for a long time, the market (including the patch and tech sectors) has quite a bit lower to go. Isopatch