Introducing the Power Curve II
The November Forward Price Curve (updated from our September analysis)
Introducing the Spark Spread
Comparing the Energy Merchants

Summary of key points:

* Power prices have growth tighter since our September analysis; 2001
forward prices are higher in every region by an average of 5%.
* The national average forward price is 23% higher in 2001 than in
2000.
* We introduce the spark spread in this report.  We expect a slightly
wider power/gas spread in 2001, although natural gas prices continue to
climb to record levels. This is bullish for generators.
* Generators are off 29% from summertime peaks; we suggest
accumulating prior to next summer.  We highlight Calpine, NRG Energy, and
Southern Energy.
* We also recommend energy merchants, whose strong trading skills
offer protection in any commodity pricing environment.  We recommend Enron,
Dynegy, and Duke Energy.  (See our Merchant Matrix on page 7.)

 <<The Power Curve II.pdf>>
If you have any trouble opening the document, please call Judy Collazo at
212-816-2760.


 Raymond C. Niles
 Power/Natural Gas Research
 Salomon Smith Barney
 (212) 816-2807
 ray.niles@ssmb.com

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 - The Power Curve II.pdf