Message-ID: <29838923.1075845459630.JavaMail.evans@thyme> Date: Fri, 22 Dec 2000 00:30:00 -0800 (PST) From: benjamin.morton@ssmb.com Subject: California Regulators Back Rate Increase For Utilities Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: "Morton, Benjamin [EQRE]" X-To: undisclosed-recipients:, X-cc: X-bcc: X-Folder: \Greg_Whalley_Oct2001\Notes Folders\Discussion threads X-Origin: WHALLEY-G X-FileName: gwhalley.nsf California Regulators Back Rate Increase For Utilities * California regulators indicated yesterday that they are willing to raise rates for electric utilities EIX and PCG, following a review of their finances * Hearings to review utilities' financial status in hearings on Dec. 27 and 28 * KEY DATE: January 4, when we expect they will vote to raise rates * We see this action as positive for the utilities, because it reduces the likelihood of insolvency or bankruptcy, although further action is required, in our view * We also see it as positive for our Growth Energy companies. Any reduction in financial pressure on the utilities equates to reduced pressure to re-regulate the wholesale power industry, in our view * The results of the action were in line with our expectation; we recommend investors buy the Growth Energy names on weakness. In particular, we highlight DYN, CPN, NRG, SOE and DUK. <> Raymond C. Niles Power/Natural Gas Research Salomon Smith Barney (212) 816-2807 ray.niles@ssmb.com s - CA Power Market II 12-22-00.pdf