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Enron Mail |
California Generators' Shares Tumble on Bankruptcy (Update1)
Bloomberg, 04/06/2001 Bear Stearns's Kevin Boone on Pacific Gas & Electric: Comment Bloomberg, 04/06/2001 California Generators' Shares Tumble on Bankruptcy (Update1) (Adds Enron comment and updates share prices. For more on the California electricity crisis, see {EXTRA <GO<}.) Houston, April 6 (Bloomberg) -- Shares of California power- sellers Mirant Corp., Duke Energy Corp. and Dynegy Inc. fell more than 9 percent after Pacific Gas & Electric Co., the state's largest utility, filed for Chapter 11 bankruptcy protection. ``The concern with the generators is clearly that they're not going to get paid anywhere near (the price) they sold power for to the California grid,'' said David Schanzer, a Janney Montgomery Scott LLC analyst. Shares of Atlanta-based Mirant, which owns California plants able to produce enough power to light 3 million homes, fell as much as 10 percent to $27.70 earlier. The stock was down 94 cents at $29.96 in late trading. Charlotte-based Duke, which produces 3,000 megawatts, or about 5 percent of the state's power, fell $2.20 to $40.20 after reaching $38.44, down 9.3 percent. A megawatt is enough to light 1,000 typical U.S. homes. Houston-based Dynegy, which controls 2,800 megawatts of power in a partnership with NRG Energy Inc. of Minneapolis, fell $3.11 to $47.81 after falling as much as 9.7 percent to $46. NRG Energy shares fell $1.50 to $29.90. Calpine Corp., a San Jose, California-based generator and power-plant developer, fell $5.04, or 9.9 percent, to $45.60. Houston-based Reliant fell $1.85 to $43.50. Tulsa, Oklahoma-based Williams Cos. fell $1.17 to $40.70. Enron Corp. of Houston, which sells power and natural gas in California, fell $1.56 to $54.14. Enron's exposure to Pacific Gas & Electric ``will not have any material effect on earnings or our financial condition,'' Enron spokesman Vance Meyer said. Enron is the world's biggest energy trader. Pacific Gas & Electric, owned by San Francisco-based PG&E Corp., and Edison International's Southern California Edison, the state's second-largest utility, together have losses of more than $14 billion because they paid more for electricity than state regulators allowed them to charge consumers. Shares of PG&E fell $4.31, or 38 percent, to $7.07. Trading was halted earlier before the bankruptcy announcement. Edison fell $4.49, or 36 percent, to $8.15. The company said it still expected the state to work out a plan to end the energy crisis. --Margot Habiby in the Dallas newsroom (214) 740-0873, or mhabiby@bloomberg.net, with reporting by Mark Johnson in Princeton, through the Princeton newsroom, (609) 279-4000/taw/alp/p Bear Stearns's Kevin Boone on Pacific Gas & Electric: Comment 2001-04-06 16:47 (New York) (For more stories on the California energy crisis, see {EXTRA <GO<} New York, April 6 (Bloomberg) -- The following are comments made by Kevin Boone, a bond analyst at Bear Stearns & Co., on the filing for Chapter 11 bankruptcy protection by PG&E Corp.'s Pacific Gas & Electric, California's largest investor-owned utility. ``It's obviously a big surprise. I'm not sure it's going to be the most constructive way to solve the issue, but it may eliminate the political element of the equation, make it a matter of law and keep the extraneous things out of the equation. ``There really were too many cooks in the kitchen. This will isolate it, so to speak, and get the parties in a room together where they can hammer out the desired objective.'' ``PG&E obviously thought this was a way to push the negotiations along and create a more favorable result. Going through the channels they were going through wasn't going to get them a solution to the problem.'' On Davis' televised speech on the energy crisis Thursday night: ``I thought his comments were a step in the right direction. I thought they were very positive. PG&E was not looking for a small step. They were looking for a giant leap to the solution of this problem.'' On market reaction: ``Certainly with the selloff we've seen today with both Edison and PG&E in the equity market, it indicates it's a potential stumbling block'' for Edison International and Sempra Energy to reach bailout agreements with the state. --Mark Johnson in the Princeton newsroom. (609) 279-4017 or mjohnson7@bloomberg.net/pjm
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