re - regulation is here ; cautious on group ; much risk already in st ocks
re - regulation is here ; cautious on group ; much risk already in stocks
* as anticipated , ferc enacted electricity price controls yesterday
across the united states , west of the rockies .
* controls only affect spot market ( approx . 20 % of total market ) , and
are set to expire on september 30 , 2002
* details of controls suggest effect on earnings may be limited ,
but . . .
* we think the " skids have been greased " for further controls down the
road , as government regulators seek regulatory solutions to future market
imbalances
* we are becoming more cautious on group , but maintain positive
ratings at this time given extent of recent pull - back and likely strong
2 q : 01 earnings outlook
* refer you to our earlier note entitled , " political risk worsens ;
expect ferc decision today " where we previewed the ferc decision and provide
further details of our analysis
> >
raymond c . niles
power / natural gas research
salomon smith barney
( 212 ) 816 - 2807
ray . niles @ ssmb . com
s
- re - regulation is here . 6 - 18 - 01 pdf . pdf
- re - regulation is here 6 - 18 - 01 . doc