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Enron Mail |
Energy Insight News for Wednesday, January 9, 2002
New year offers a host of new energy situations A year ago, energy industry investors were looking for one thing: growth. They weren't interested in that old-line, vertically integrated utility-phooey on that good ol' dependable 4% to 5% dividend yield-investors wanted growth, and flash, with visions of greenbacks dancing in their heads. One year ago, natural gas prices were not far off their double-digits highs, California's deregulation debacle was going strong and blackouts were predicted to be commonplace on the West Coast, possibly New York City, possibly other places. The Federal Energy Regulatory Commission, which was transformed from an acronym nobody knew to a commission where an unannounced cough would cause industry shudders, soon (in the early part of 2001) had a new leader in Curt Hebert, a Mississippian with a stubborn streak tilted toward the mantra that market solutions rule. But faster than you could say "Enron," the West Coast debacle eased, companies vilified for allegedly pilfering the West were finding it hard to impress Wall Street and the entire industry learned a very valuable lesson: Even the highest of the high flyers can experience turbulence, even go into a tailspin, when the gas runs out of the economy, when playing in the gray area of the rules is discovered and gobbledygook-wrapped financials don't sit well with critical investors. For the year, utilities as a whole were one of the slumping economy's bright spots. According to Standard & Poor's, a division of The McGraw-Hill Cos. Inc. and a sister company to Platts, the sector reported earnings advances in the 9% range. But that was then, this is now. What about 2002-is it more of the same? More heartaches in terms of adapting to deregulation, cyclical pricing or capacity overbuilding/underbuilding? Read the entire story at http://www.energyinsight.com. Also, catch the latest news headlines on Energy Insight Executive, updated twice daily. /////////////////////////////////////////////// Market Brief Tuesday, January 8 Stocks Close Change % Change DJIA 10,150.55 (46.5) -0.46% DJ 15 Util. 292.25 (4.0) -1.36% NASDAQ 2,055.73 18.62 0.91% S&P 500 1,160.70 (4.2) -0.36% Market Vols Close Change % Change AMEX (000) 134,674 (6,359.0) -4.51% NASDAQ (000) 1,862,541 (248,903.0) -11.79% NYSE (000) 1,242,380 (62,857.0) -4.82% Commodities Close Change % Change Crude Oil (Feb) 21.25 (0.17) -0.79% Heating Oil (Feb) 0.5695 (0.001) -0.18% Nat. Gas (Henry) 2.3 0.030 1.32% Propane (Feb) 30.25 0.00 0.00% Palo Verde (Feb) 24.75 0.00 0.00% COB (Feb) 24.75 0.00 0.00% PJM (Feb) 27.55 0.00 0.00% Dollar US $ Close Change % Change Australia $ 1.908 (0.020) -1.04% Canada $ 1.59 (0.004) -0.25% Germany Dmark 2.19 0.004 0.18% Euro 0.8919 (0.001) -0.17% Japan ?en 132.8 1.800 1.37% Mexico NP 9.18 0.030 0.33% UK Pound 0.6949 (0.0002) -0.03% Foreign Indices Close Change % Change Arg MerVal 343.22 0.00 0.00% Austr All Ord. 3,364.20 (21.10) -0.62% Braz Bovespa 14167.58 (211.01) -1.47% Can TSE 300 7782.00 (88.30) -1.12% Germany DAX 5236.37 4.15 0.08% HK HangSeng 11713.71 (178.93) -1.50% Japan Nikkei 225 10695.6 (246.76) -2.26% Mexico IPC 6641.14 75.70 1.15% UK FTSE 100 5,250.40 (43.20) -0.82% Source: Yahoo!, TradingDay.com and NYMEX.com ////////////////////////////////////////////// Executive News PNM terminates merger with Western Resources Albuquerque, N.M.-based PNM Resources announced Tuesday its board had officially killed the proposed deal to buy Western Resources' electric utility subsidiaries. The deal, originally valued at over $4 billion, had been in trouble for months, and each side sued the other in state court in New York. PNM said the merger could be terminated after Dec. 31 under the terms of the deal, if there had not been satisfactory progress made towards completing the transaction. But Western has disputed that PNM had grounds to back out of the deal. PNM sued Western in October seeking to get out of the deal alleging breach of contract, in part because of adverse rulings from the Kansas Corporation Commission (KCC) on rates and a Western restructuring plan considered vital to the transaction. Western fired back with its own lawsuit a month later, seeking at least $650 million in damages against PNM for alleged extortion, breach of contract, sabotage and improper interference in the KCC proceedings. Neither case has been decided, although PNM has asked the court to either dismiss Western's case or delay action on it until after it has decided PNM's initial suit. Western also has appealed the KCC order blocking a planned restructuring in preparation for the PNM transaction to a Kansas district court. Western fired back with its own lawsuit a month later, seeking at least $650 million in damages against PNM for alleged extortion, breach of contract, sabotage and improper interference in the KCC proceedings. Neither case has been decided, although PNM has asked the court to either dismiss Western's case or delay action on it until after it has decided PNM's initial suit. Western also has appealed the KCC order blocking a planned restructuring in preparation for the PNM transaction to a Kansas district court. Nine states will sue if pollution controls are weakened The attorneys general of nine northeastern U.S. states said Tuesday they would sue to block new federal regulations should they weaken pollution controls at power plants. The Bush administration is considering changes to so-called "new source review" regulations that "verge on the wholesale weakening of the Clean Air Act," N.Y. Attorney General Eliot Spitzer told a press briefing. Although the attorneys general focused on the adverse impact on air quality caused by emissions from coal-burning power plants in the Midwest, changes in the NSR program would also affect oil refineries. The attorneys general said they would consider challenging the administrative process that led to the new regulations which provided industry "unfettered access," Spitzer said, but denied access to the states. The Bush administration would also be violating federal statutes "by changing the rules in the middle of the game," Connecticut Attorney General Richard Blumenthal said. The new source review program requires industrial facilities to install new pollution control equipment when they upgrade their operations. The Environmental Protection Agency, under the Clinton administration, filed suit that was joined by several states, alleging that a number of utilities upgraded their plants under the guise of doing routine maintenance to avoid the NSR requirements. The EPA also initiated vigorous enforcement of the NSR program against refiners, which led to a number of multi-million dollar settlements of NSR violations. The refinery and utility industry are lobbying for changes to the program. To subscribe to our Executive News Service, which is updated twice daily, log on to http://www.energyinsight.com, or contact Platt's Direct Response Team at 1-800-424-2908 (if outside the United States call 1-720-548-5700). ///////////////////////////////////////////////
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