---------------------- Forwarded by Don Miller/HOU/ECT on 04/06/2001 03:24 PM ---------------------------


Jon Cartwright <JCartwright@FI.RJF.com> on 04/06/2001 01:23:12 PM
To:	"'RJF Energy-Gram'" <cartwrit@bloomberg.net>
cc:	 
Subject:	ENERGY: PG&E Bankruptcy (Calpine & Mirant) Note


> Recapping my verbal comments from the 1:30 PM call:
>
> *	PG&E Conf Call is 2:15 EST (415) 228-4835 Conf # 5056296
> *	Calpine has $305 million (pre-tax now that I think about it) in
> accruals with PG&E as of last week.  Our numbers and the company's
> guidance previously has been that all financial forecasts the firm has
> made exclude those numbers, i.e. any recovery would be a benefit to
> guidance.
> *	Mirant has never broken out its exposure, but most recent guidance
> excluding PG&E's numbers as well.  We think MIR's exposure is close to
> $0.10 per share, which if ever collected would be additive to estimates.
> *	What happens in bankruptcy?  Well basically a federal judge will
> precede over the filing and immediately determine operating costs for PG&E
> so that it can remain a going concern.  As such, as a letter of the law,
> operating costs (which in this case would be purchasing power from CPN,
> MIR, DYN, etc) are to be kept current.  Bottom line the credit risks of
> not getting paid go away immediately, net-net CPN and MIR will start
> getting paid every day as opposed to accruing revenue like they had been
> doing for the past several months.
> *	While the filing has surprised investors, the weakness being
> experienced across the board in the electric power space is way overdone
> in our opinion.  We would take advantage of the weakness.
> *	We will obviously have more later today and Monday, but this is
> actually a positive turn of events for merchant power producers.  For PG&E
> bond and common stock owners, that's a whole different story.
>
> CPN: SB1
> 	2001 EPS $1.80
> 	2002 EPS $2.50
> MIR SB1
> 	2001 EPS $1.60
> 	2002 EPS $1.95
>
>
>
> Fred Schultz - Houston
>
>
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Jon Kyle Cartwright
VP & Senior Energy Analyst
Raymond James & Associates
Taxable Fixed Income Research
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JCartwright@fi.rjf.com

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