-----Original Message-----
From: Stein, Neil [mailto:neil.stein@csfb.com]
Sent: Monday, July 16, 2001 8:00 AM
To: undisclosed-recipients
Subject: CSFB Independent Power Weekly-Issue #35


Good Morning,

Attached, please find the latest issue of our Independent Power Weekly.

 <<IPW071601.pdf>>  <<CSFB Power Generation Supply Chain Conference.pdf>> 
Summary:
1. IPPs Fall 1.9%   Last week our IPP composite fell 1.9%, underperforming
both the NASDAQ (+4.0%) and the S&P 500 (+2.1%).  Calpine was the strongest
performer in the group, rising 4.5%.  AES was the weakest performer, falling
9.5%.  

2. 4 Items to Focus On   In our view, there were four items worth focusing
on from last week: 1.) AES fell 10% owing to Latin American concerns.  We
see downside to our 2001 estimate; 2.) The FERC settlement conference
adjourned on July 9.  On July 12, the presiding ALJ issued a recommendation
favorable to generators; 3.) On July 12, the US bankruptcy court approved
Calpine's settlement with PG&E; and, 4.) On July 10, NRG Energy announced it
would acquire a 2,255 MW portfolio from Indeck.

3. Latin America Pressuring AES Earnings   The likelihood of downside to our
2001 EPS estimate for AES. Corp. of $1.89 has increased materially.  We
believe the ongoing currency weakness combined with power rationing have the
potential to negatively impact 2001 EPS by $0.25-$0.30 versus prior
expectations-on a stand-alone basis.  While management indicated in mid-May
that it could offset weakness in Brazil, the currency has materially
depreciated since that time and shows no signs of improvement in the
near-term.  AES's second quarter earnings conference call will take place on
July 26.  Following the call, we will adjust our 2001 estimate accordingly,
unless management indicates that it remains positioned to offset these items
through upside in other parts of its business.

4.  FERC ALJ Issues Report    On Thursday (7/12), Curtis Wagner, the
Administrative Law Judge who presided over the recent settlement conference,
issued a report presenting his findings and recommendations for next steps.
Overall, the report was very much consistent with our expectations.  While
Wagner notes that some refunds are due from the generators, he argues that
the $8.9 billion demanded by the State of California "cannot be
substantiated."   We believe Calpine and Mirant offer the greatest downside
protection from this issue.  

5. CSFB Power Generation Supply Chain Conference   On September 10 and 11,
CSFB will host a Power Generation Supply Chain Conference at the Plaza Hotel
in New York City.  This event is designed to provide investors with a
wholistic perspective on all aspects of the sector-from coal and natural gas
companies, to equipment and construction service providers, to the power
producers themselves.  Please contact us if you would like additional
information.

Regards,

Neil Stein   212/325-4217
Bryan Sifert   212/325-3906


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