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Wall Street Reporter Interviews George A. Kast, President & CEO of Global
Water Technologies Business Wire, 07/05/01 Developments in California's energy crisis Associated Press Newswires, 07/05/01 UK: ANALYSIS-Where have all the LME volumes gone? Reuters English News Service, 07/05/01 USA: UPDATE 1-New Power adds customers with two deals. Reuters English News Service, 07/05/01 Factiva Energy Digest Factiva Energy Digest, 07/05/01 India Risks Lower Rating If Deficits Grow, S&P Says (Update2) Bloomberg, 07/05/01 California Seeks Cheaper Long-Term Power Contracts, Paper Says Bloomberg, 07/05/01 USA: U.S. Cash LPG-Propane firms on bullish crude oil fundamentals. Reuters English News Service, 07/05/01 Wall Street Reporter Interviews George A. Kast, President & CEO of Global Water Technologies 07/05/2001 Business Wire (Copyright © 2001, Business Wire) GOLDEN, Colo.--(BUSINESS WIRE)--July 5, 2001--Global Water Technologies, Inc. (OTCBB: GWTR), a full-service cooling water company utilizing advanced technologies and engineered solutions to provide process cooling water to power plants, process industry and municipalities, worldwide, today announced that George A. Kast, President and CEO, has been featured in an interview by Wall Street Reporter. In the interview, Kast discussed industry trends, market potential and growth opportunities in the markets that the Company has cultivated. The interview was conducted on Tuesday, July 3, 2001, at 1:00 p.m. (MT) by Matt Cleary, and is currently audibly available, on the Wall Street Reporter's web site, www.wallstreetreporter.com, by clicking on the CEO Interviews link. Commenting on this interview, George Kast, President and CEO stated: "We are very pleased to be featured in an interview by the Wall Street Reporter. This is a very exciting time for Global Water Technologies, Inc. and we are excited that this forum gives us the opportunity to present our story to the investment community." The interview primarily covered the most recent corporate events and the Company's efforts to implement its business strategy, capitalizing on its competitive advantages in the rapidly expanding power, energy and utility sector. The Wall Street Reporter is a leading information source for professional investors seeking new investment ideas. Their in-depth interviews of CEOs with leading public companies are geared toward sophisticated investors who demand an unbiased, unscripted, first-hand perspective that enables them to make informed investment decisions. About Global Water Technologies Global Water Technologies, Inc. (OTCBB: GWTR) is a company with major interests in the areas of power, energy and water. The company utilizes its proprietary technology to enhance power production by providing cold, clean water to increase operating efficiencies, reduce water use and operating costs. Through this process, GWTR is able to increase their client's power output by up to 10% depending upon age, design and efficiency of the plant. GWTR's client base includes, but is not limited to, the following companies: General Electric (NYSE: GE), Enron subsidiary companies (NYSE: ENE), Raytheon Company (NYSE: RTN), Archer Daniels Midland (NYSE: ADM), British Petroleum Amoco, Mitsubishi, Mobil, Texaco (NYSE: TX), Duke Fluor Daniel, Kerr McGee (NYSE: KMD) and Calpine (NYSE: CPN). Forward-Looking Statement This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Such statements are subject to risks and uncertainties that could cause actual results to vary materially from those projected in the forward-looking statements. The Company may experience significant fluctuations in future operating results due to a number of economic, competitive and other factors, including, among other things, the size and timing of customer orders, changes in laws, new or increased competition, delays in new products, production problems, changes in market demand, market acceptance of new products, seasonal in product purchases, and changes in foreign exchange rates. These factors, and other factors, which could materially affect the Company and its operations are included in the Company's filings with the Securities and Exchange Commission and are incorporated herein. CONTACT: Global Water Technologies, Inc. Steve Rash, 303/215-1100, Ext. 192 info@gwtr.com www.gwtr.com or Equity Growth & Management Tom Waite, 407/444-0375 12:00 EDT JULY 5, 2001 Developments in California's energy crisis By The Associated Press 07/05/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. Developments in California's energy crisis: THURSDAY: - No power alerts as electricity reserves stay above 7 percent. - The Senate Judiciary Committee continues its debate at a hearing over Gov. Gray Davis' proposal to aid financially strapped Southern California Edison. - Lt. Gov. Cruz Bustamante and Assemblywoman Barbara Matthews introduce two additional whistleblowers from power plant operated by Duke Energy. - The grand jury that will probe criminal charges of price gouging by energy generators will convene this week in Sacramento. The 19 new members of the Sacramento County grand jury were assigned by State Attorney General Bill Lockyer and will assess the results of several government investigations. - The U.S. Trustee argues again in bankruptcy court that ratepayers should have a committee to represent their interests in the Pacific Gas & Electric Co. bankruptcy proceedings. WEDNESDAY: - No power alerts as electricity reserves stay above 7 percent. WHAT'S NEXT: - The Senate committee investigating possible price manipulation in California's energy market meets Tuesday. The committee will vote on contempt citations against generators Mirant and Enron who failed to comply with subpoenas for documents. Six other suppliers have until Tuesday to turn over documents. THE PROBLEM: High demand, high wholesale energy costs, transmission glitches and a tight supply worsened by scarce hydroelectric power in the Northwest and maintenance at aging California power plants are all factors in California's electricity crisis. Southern California Edison and Pacific Gas and Electric say they've lost nearly $14 billion since June 2000 to high wholesale prices the state's electricity deregulation law bars them from passing on to consumers. PG&E, saying it hasn't received the help it needs from regulators or state lawmakers, filed for federal bankruptcy protection April 6. Electricity and natural gas suppliers, scared off by the companies' poor credit ratings, are refusing to sell to them, leading the state in January to start buying power for the utilities' nearly 9 million residential and business customers. The state is also buying power for a third investor-owned utility, San Diego Gas & Electric, which is in better financial shape than much larger Edison and PG&E but also struggling with high wholesale power costs. The Public Utilities Commission has approved average rate increases of 37 percent for the heaviest residential customers and 38 percent for commercial customers, and hikes of up to 49 percent for industrial customers and 15 percent or 20 percent for agricultural customers to help finance the state's multibillion-dollar power buys. Track the state's blackout warnings on the Web at www.caiso.com/SystemStatus.html. UK: ANALYSIS-Where have all the LME volumes gone? By Martin Hayes 07/05/2001 Reuters English News Service (C) Reuters Limited 2001. LONDON, July 5 (Reuters) - Years of rising business on the London Metal Exchange (LME) could be over, after volume dropped in the first half of 2001, and many in the world's largest industrial metals market say the growth may never be recaptured. Senior traders cite several factors behind the 16 percent decline in business in the first six months - prices are depressed, rival electronic systems have sprung up, global economies are weak. "The problem is the general conditions that are prevailing at the moment - we are seeing recessionary signs that are dampening the market. It is cyclical, and that is the worry because the cycle is lasting some time," one said. Since 1991, volumes have risen from 16.93 million lots to 2000's record 66.44 million. There have previously been troughs in the business and price cycle, but these did not markedly affect volumes - the 1994/1995 decline was some 500,000 lots. So the concern now is that this downturn is different. "That (lower volume) is horrible. Some business is undoubtedly going off the market, but a lot of people are not making proprietary positions anymore - they are not making any money," a director at an LME associate broker said. "It is going to get a lot worse - it is a bleak picture at the moment for next year. A lot of people will have to ask: 'Is it worth being in the business?'," a manager at another broker said. The LME said this week that total futures and options turnover during Jan/June 2001 fell to 29.899 million lots, down from Jan/June 2000, when volume rose 18 percent to 35.440 million. Traded options turnover has virtually halved, falling to 1.481 million lots from 2.784 million. LME data showed that this half-year was still the third highest on record, only tailing 1999 by 100,000 lots. "(this)...clearly illustrates the continuing health of the LME and the essential part it plays as a hedging medium to the global metal market, despite the current economic environment," the LME said on Thursday. SWITCHED ON SCREENS BLUR THE PICTURE The major factor that emerged last year is electronic trading, either web-based or specific screen-based platforms. Competitors such as Enron Online and Spectron Metals have grabbed business while the LME has also sanctioned and launched its own system, LME Select. Many of these trade LME contracts, so the turnovers are still being incorporated into the Exchange's volumes. But the ethos of screen-trading has implications for broker costs and revenues. "You are seeing more business going towards the screens - and some platforms will offer a less-regulated OTC (over-the-counter) market," the manager said. LME ring-dealers and associate brokers now face even lower commissions. Costs will fall when screens offer straight-through processing, embracing back-office functions such as matching. "In an electronic market, the cost of serving a client drops dramatically and if a customer has direct access to the market, which could happen, he gets direct control," he said. In London's soft commodity markets, which migrated away from trading floors to screens in 2000, commissions have fallen sharply, he noted. For the moment, the LME retains a traditional open-outcry floor - it and London's International Petroleum Exchange (IPE) are the last bastions of this form of trading. Business is also transacted in offices over telephones. But this is also changing with the advent of screens. "In some ways the screens, whoever they belong to, may be the problem," a senior trader said. "In the old days, you used to talk to people more, get a feel for the market, and take a punt. Not so much now - the big boys still chat, but not as much, and with the screens it is almost a 'matched bargain' situation," he said. METAL INDUSTRY SHYING AWAY The malaise affecting prices is not helping, especially as there is little incentive for consumers to buy, while a falling market always sees less speculative activity. Most of this year has seen prices progressively weaker, with copper at its lowest since July 1999, zinc and tin at levels last seen nearly eight years ago, lead at a 12-month low-point and nickel and aluminium at two-month lows. Although prices have been softer, there have been occasions when tightness has prevailed. When the market moves from contango, when nearby prices are cheaper than forward, into backwardation, which is the opposite, hedging dries up. Although the LME derives much of its liquidity from speculators, the bulk of its trade comes from the metals industry - hedging and price protection. "There is routine hedging taking place, but what one would call the strategic positioning is just not happening at the moment," the manager said. MARKET CONTRACTION LIKELY If volumes continue to fall, and there is the pressure on commissions, then further contraction and consolidation in the market appears likely. There are now only 12 ring-dealing members of the LME - those who alone are entitled to trade on the open-outcry floor - down from nearly 30 in the mid-1980s. "There is too much capacity in the market even now, and these ongoing rumours do not help. For months one RDM has supposedly been taking over another. It is about time they got on with it," the senior trader said. "A base metal trading operation may eventually come down to a few people sitting at the end of a treasury desk," the associate broker director said. USA: UPDATE 1-New Power adds customers with two deals. 07/05/2001 Reuters English News Service (C) Reuters Limited 2001. NEW YORK, July 5 (Reuters) - New Power Co., a national energy provider partly owned by powerhouse Enron Corp. , said on Thursday it plans to make two separate acquisitions that would increase its customer base by about 20 percent and raise its visibility in Pennsylvania and Ohio. Financial terms of the agreements with AES Direct, the retail marketing subsidiary of independent power company AES Corp. , and with CoEnergy, a unit of Michigan-based DTE Energy , were not disclosed. Purchase, New York-based New Power, a unit of NewPower Holdings Inc. , which was formed to take advantage of electricity deregulation, said the deals would add a total of 121,000 electric and natural gas customers. At the end of the first quarter, it had about 631,000 customers, a company spokeswoman said. New Power said it signed an agreement to buy AES Direct's customer base and related assets, including natural gas inventory, supply and transportation contracts as well as billing and customer service operations. It also is buying Ohio-based customers from CoEnergy, gaining entry into service areas of four additional utilities. Shares of New Energy were unchanged at $8.75 in morning New York Stock Exchange trade, the low end of a 52-week range of $4.63 to $28.69. Factiva Energy Digest - July 5, 2001. 07/05/2001 Factiva Energy Digest Copyright © 2001 Dow Jones Reuters Business Interactive Ltd., trading as Factiva. POWER & UTILITY *German Utilities Should Expand Abroad, Consultant Says COLOGNE, Germany (Reuters) - Germany's top utilities lag far behind major foreign rivals in the share of revenues derived internationally, which could limit future growth, a consultant told an industry conference on Thursday. "Germany's market leaders lag behind in their market presence in Europe and the rest of the world," said Volker Flegel, a European energy expert at consultancy A.T. Kearney's Munich office. "If they don't act fast, the gap will widen....They have to adopt more of a pan-European perspective," he said, singling out Spain as the most attractive investment target. Flegel said revenues generated outside Germany by the country's top four utilities ranged between 3.0% of turnover at HEW, to 11% at E.ON, 11.7% at RWE (RWEG.DE) and 15.1% at EnBW. By comparison, the shares of foreign sales at U.S. energy groups TXU and Enron were 36% and 18.6%. Foreign sales contributed 18.6% to turnover at French/Belgian group Electrabel and 18.3% at France's EdF. *New Power Adds 20% to Customer Base With Two Deals NEW YORK(Reuters) - New Power Co., a national energy provider partly owned by powerhouse Enron Corp., on Thursday increased its customer base by about 20% and its visibility in Pennsylvania and Ohio with two separate acquisitions. Financial terms were not disclosed. New Power, a unit of NewPower Holdings Inc., which was formed to take advantage of electricity deregulation, added a total of 121,000 electric and natural gas customers to its customer base of about 615,000. New Power said it signed an agreement to buy the customer base and related assets of AES Direct, the retail marketing subsidiary of independent power company AES Corp., which includes natural gas inventory, supply and transportation contracts as well as billing and customer service operations. It also bought Ohio-based customers from CoEnergy, a unit of Michigan-based DTE Energy, gaining entry into service areas of four additional utilities. Full versions of these and other energy stories are available from Dow Jones Interactive and Reuters Business Briefing Factiva Contact: Marc Donatiello, +1 609-627-2659, marc.donatiello@factiva.com. (Copyright © 2001, Dow Jones & Company, Inc.). India Risks Lower Rating If Deficits Grow, S&P Says (Update2) 2001-07-05 09:12 (New York) India Risks Lower Rating If Deficits Grow, S&P Says (Update2) (Adds minister's comment starting in 19th paragraph.) New York, July 5 (Bloomberg) -- India must cap its federal and state government budget deficits or risk having its credit rating lowered, a Standard & Poor's analyst said. India's ``BB'' rating, which is two notches below investment grade, may be cut if the combined deficits widen to more than 10 percent of gross domestic product from nine percent now, Joydeep Mukherji, S&P's associate director and India analyst, said in an interview. ``We continue to watch the fiscal problem very closely as that is the most vulnerable area that could lead to a negative rating action,'' Mukherji said. The warning comes as the government plans to increase spending to bolster a slowing economy. A lower rating would raise the cost of borrowing for the government and Indian companies, already among the highest in Asia. India's benchmark 10-year bond yield is 9.6 percent, higher than 6.5 percent for comparable Chinese bonds and 6.8 percent for South Korean bonds, both of which have an investment grade rating. S&P lowered the outlook on India's rating to ``stable'' from ``positive'' in October. The agency cited India's failure to meet deadlines for sales of state-owned companies. The rating is among the lowest in the region. Last week, an analyst for Moody's Investors Service said India must step up sales of state assets and trim its budget deficit to avoid a reduction in the outlook on its debt. Moody's ``Ba2'' rating, also two notches below investment grade, has a ``positive'' outlook, meaning it may be raised. Growing Debt Fitch cut India's long-term sovereign rating outlook to ``negative'' from ``stable'' on May 31. Fitch, which rates India ``BB+,'' one notch below investment grade, cited ``concerns about fiscal policy, privatization and a deterioration in the investment climate.'' ``Any downward change in the country's rating or outlook will adversely impact investments in India,'' said Kalpana Morparia, executive director of lender ICICI Ltd., which borrowed about $100 million in international markets last year. Years of budget deficits have saddled India with 14 trillion rupees ($297 billion) of debt, equal to about 63 percent of GDP. Servicing the debt leaves little money to invest in schools, hospitals or other projects that could improve the well-being of Indians and raise the rate of economic growth in the world's second most-populous country. Slowdown The economy expanded 3.8 percent in the quarter ended March 31 from a year earlier, down from 5 percent growth the previous quarter and the slowest pace in nearly three years, as a two-year drought pruned rural incomes. In response, Finance Minister Yashwant Sinha said last week he would step up government spending to stimulate the economy. ``Lower growth may mean lower tax revenue and increased pressure on governments to raise spending that could enlarge the combined deficits of the central and state governments beyond 10 percent of GDP this year, potentially weakening the rating,'' Mukherji said. Investors too are getting concerned with the government's profligacy. In the first two months of the fiscal year, the central government's budget deficit has reached a quarter of the target for the year as a whole. ``The growing deficit bothers me,'' said Bharat Shah, who manages 33 billion rupees at Birla Sun Life Asset Management in Mumbai. ``There's a need for a sharp reduction in expenditure that will call for political consensus, which I don't think is in place.'' Without pruning deficits, the government can't hope to lower interest rates. Higher interest rates in India damp the government's plan of attracting more foreign companies to set up businesses locally. Overseas Investment ``The most important thing to do is to get more foreign direct investment, which is the mother of all solutions,'' Shah said. Last year, India managed to attract $4.5 billion in foreign investment, a tenth of what China took in. India's program to sell state assets, reduce tariffs and otherwise free the economy from government interference hasn't moved as fast as expected, Mukherji said. ``India has had about 3 years' worth of economic reforms spread out over the last 10 years,'' he said. For example, the government said it planned to raise 120 billion rupees by selling stakes in more than 20 state-run companies in the fiscal year that began April 1. So far this year, it hasn't sold a single stake. Privatization Privatization minister Arun Shourie said delays in selling stakes in companies such as national carrier Air India Ltd. and state-run hotel chain India Tourism Development Corp. were not unusual and investors need to be patient. ``We are proceeding methodically,'' Shourie told reporters at a news conference late last night. ``Have faith in the process.'' S&P isn't convinced. If the government's economic program fails to gather speed, the country may slip to its pre-1990s growth rate of 3.5 percent a year from an average of more than 7 percent in the 1990s, Mukherji said. The dispute between the Maharashtra State Electricity Board and Enron Corp., the country's biggest foreign investor, which has set up a $3 billion power plant, is a ``long-term disaster'' and a ``bad, loud and clear signal to potential foreign investors,'' Mukherji said. The state electricity board has refused to pay 3 billion rupees for power supplied by Enron's local unit, Dabhol Power Co. India hasn't delivered on guarantees to pay for the power. The dispute is widely seen as a litmus test for foreign investment in India. ``The Indian private sector is used to bad politics and failed economic policies, such as energy reforms, but the foreign private sector is not,'' Mukherji said. --Gautam Chakravorthy in the Mumbai newsroom (91-22) 233-9027 or at chakravorthy@bloomberg.net, with reporting by Anindya Mukherjee, Abhay Singh and Arijit Ghosh in New Delhi/clw/pv/nmn California Seeks Cheaper Long-Term Power Contracts, Paper Says 2001-07-05 14:44 (New York) Washington, July 5 (Bloomberg) -- California Governor Gray Davis said the state would consider accepting some of the $8.9 billion he says energy companies overcharged the state for electricity in the form of lower rates on long-term contracts, the San Jose Mercury News reported. While the money doesn't have to be paid in cash, it ``has to net out to $8.9 billion,'' Davis told the paper. Energy companies such as Duke Power Corp., Enron Corp. and Williams Cos. have said their prices were fair, with some saying the state owes them money. The companies' response to Davis's offer wasn't clear, the paper said. Settlement talks are scheduled to end Monday in Washington, the paper said. Few details have emerged because the overseeing judge imposed a gag rule on the discussions. (San Jose Mercury News 7-3) See {SJMN <GO<} for the San Jose Mercury News Web site. --Russell Hubbard in the Princeton newsroom at (609) 279-4131, or at rhubbard2@bloomberg.net/jjs Story illustration: See {PMATSPSP <INDEX< GP D <GO<} to graph the Bloomberg PowerMatch Index of Southern California power prices. USA: U.S. Cash LPG-Propane firms on bullish crude oil fundamentals. 07/05/2001 Reuters English News Service (C) Reuters Limited 2001. NEW YORK, July 5 (Reuters) - U.S. cash liquefied petroleum gas (LPG) strengthened on bullish crude oil fundamentals early Thursday, traders said. Mont Belvieu, Texas propane gained a penny to trade at 35.88 and 36.00 cents a gallon, while Conway product traded 0.50 cent higher at 40.50 cents a gallon, traders said. U.S. national crude supplies fell by 4.0 million barrels last week, according to the American Petroleum Institute (API), while the Energy Information (EIA) reported a bigger draw of 4.8 million barrels. Crude oil futures on the New York Mercantile Exchange (NYMEX) were up 58 cents to $26.82 a barrel midday on the inventory numbers, while weighing the effect of Iraq resuming exports, which it stopped a month ago in protest of U.N. sanction discussions. Meanwhile, natural gas futures fell 8.10 cents go $3.120 per million British thermal units (mmBtu) amid stronger cash values. Ethanes tracked the strength, with Belvieu purity up 0.50 cent to trade at 26.50 cents a gallon, and mix up 0.63 cents to trade at 25.63 cents a gallon, dealers said. Conway mix talked steady at 24.25/24.88 cents a gallon. In Belvieu, normal butane fell a penny to talk at 41.88/42.50 cents a gallon, isobutane firmed 0.25 cent to trade at 43.25 cents a gallon, and natural gasoline fell 0.50 cent to trade at 51.12 cents a gallon for Dynegy barrels and 52.50 cents a gallon for Enron barrels, dealers said. No deals were heard on the heavies on Conway. Normal butane talked steady at 41.50/41.63 cents a gallon, isobutane down a penny at 50.00/51.50 cents a gallon and natural gasoline up 0.50 cent to be offered at 53.50 cents a gallon, traders said. - ((Soo Youn, New York Energy Desk, 646-223-6057, soo.youn@reuters.com)).
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