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Enron Mail |
----- Forwarded by Jeff Dasovich/NA/Enron on 04/09/2001 01:20 PM -----
=09Lynnette Barnes =0904/09/2001 01:15 PM =09=09=20 =09=09 To: Tom Chapman/HOU/ECT@ECT, Marchris Robinson/NA/Enron@Enron, Bill= =20 Moore/NA/Enron@Enron, Howard Fromer/NA/Enron@Enron, Frank=20 Rishe/NA/Enron@Enron, Steve Montovano/NA/Enron@Enron, Daniel=20 Allegretti/NA/Enron@Enron, Jeff Ader/HOU/EES@EES, Gloria=20 Ogenyi/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert Frank/NA/Enron@Enron, Ma= ry=20 Schoen/NA/Enron@Enron, Ron McNamara/NA/Enron@Enron, Harry=20 Kingerski/NA/Enron@Enron, James D Steffes/NA/Enron@Enron, Stacey=20 Bolton/NA/Enron@Enron, Patrick Keene/NA/Enron@Enron, Leslie=20 Lawner/NA/Enron@Enron, Stella Chan/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT,=20 Robert Neustaedter/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Roy=20 Boston/HOU/EES@EES, Barbara A Hueter/NA/Enron@Enron, bmerola@newpower@EES,= =20 Susan M Landwehr/NA/Enron@Enron, Janine Migden/NA/Enron@Enron, Kerry=20 Stroup/NA/Enron@Enron, bmerola@newpower.com, gduda@newpower@EES,=20 kmagruder@newpower.com, pbray@newpower.com, sbertin@newpower.com,=20 scovino@newpower.com, treichel@newpower.com, Amr=20 Ibrahim/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jeff Dasovich/NA/Enron@Enron,= =20 Aleck Dadson/TOR/ECT@ECT, Susan J Mara/NA/Enron@ENRON =09=09 cc:=20 =09=09 Subject: PPL Montana shows lucrative profit PPL shows profits in 2000=20 By The Associated Press=20 HELENA (AP) =01) Reports filed with the Securities and Exchange Commission = show=20 PPL Montana made handsome profits in the lucrative Western power market in= =20 2000.=20 PPL Montana owns most of the former Montana Power Co. electric-generating= =20 plants in the state. In documents filed last month, the company reported=20 $86.7 million in net income for 2000.=20 The bulk of those profits came in the final three months of the year, when= =20 regional power prices soared to record heights. PPL Montana reported $68.7= =20 million net income for that period, or more than triple what it earned the= =20 first nine months of the year.=20 PPL Montana also made these profits despite its obligation to supply 285,00= 0=20 Montana Power Co. customers with relatively cheap power, under a contract= =20 that expires next year.=20 Company officials said that since PPL Montana acquired the facilities in=20 December 1999, the company has sold about 69 percent of the power generated= =20 to Montana Power Co. and other marketers for resale for end use in Montana.= =20 Power left over after supplying the MPC customers is sold on the open marke= t=20 to suppliers, who sell inside and outside Montana, resulting in its most=20 lucrative profits.=20 The power that PPL Montana sells to the Montana Power residential and small= =20 business customers is priced at about $22.25 per megawatt hour (mwh). Sales= =20 in the unregulated regional market are anywhere from $75 to $300 per mwh or= =20 higher.=20 PPL Montana=01,s marketing division has refused to offer power to any Monta= na=20 customers at below-market prices, as have other marketers.=20 Some have said if PPL Montana made $87 million last year while supplying MP= C=20 customers at $22.25 per mwh, why can=01,t it offer power at $35 to $40 per = mwh=20 and still make considerable money?=20 PPL director of corporate communications Dan McCarthy said it=01,s not that= =20 simple. He said other factors may influence sales and production, including= a=20 low-water season this year, which would reduce the output of hydroelectric= =20 plants and force the company to buy power on the open market to supply its= =20 customers.=20 =01&You can=01,t extrapolate these numbers and say we=01,d make double (the= profits)=20 at double the price,=018 he said.=20 He also said last year=01,s $87 million in profits is little more than a 10= =20 percent return on the company=01,s $800 million investment in the power pla= nts =01)=20 about the same return made by Montana Power on its formerly regulated asset= s.=20 However, a Montana mining executive who=01,s been following PPL Montana=01,= s=20 finances said last week that a 10 percent return after profits is a very go= od=20 return.=20 Greg Stricker, president of Montana Resources Inc. in Butte, also noted tha= t=20 the high market prices for electricity that helped PPL triple its profits i= n=20 the final quarter of last year are still in effect, and are expected to sta= y=20 high this year.=20 If the company=01,s profits for the fourth quarter of 2000 are spread over = a=20 year, PPL Montana would see a $275 million profit, or a return of 30 percen= t=20 to 35 percent on investment, Stricker said.=20 As part of its expenses, PPL Montana reported spending nearly $92 million t= o=20 buy power on the market to fulfill its supply contracts. However, that amou= nt=20 did not increase markedly in the final quarter of last year.=20
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