Message-ID: <17657408.1075840889157.JavaMail.evans@thyme> Date: Tue, 19 Jun 2001 11:12:00 -0700 (PDT) From: ray.niles@ssmb.com Subject: Re-Regulation is Here; Cautious on Group; Much Risk Already in St ocks Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Niles, Ray X-To: X-cc: X-bcc: X-Folder: \ExMerge - Kitchen, Louise\'Americas\Portland X-Origin: KITCHEN-L X-FileName: louise kitchen 2-7-02.pst 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 2Q: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. 6-18-01pdf.pdf - Re-Regulation is Here 6-18-01.doc