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Alliance of Energy Suppliers Express-November 6, 2001
 
Federal Affairs
 
***Proponents of an Energy Bill Continue to Press Democrats for Senate  Floor Consideration***
 
Proponents of comprehensive energy legislation continued pressure on the  Senate Democratic leadership to bring an energy bill to the floor before  Congress adjourns for the year. The need for a bill was emphasized by the  President, the Secretary of Energy; Senate Republicans; and representatives of  veterans' groups, organized labor, and other parties at various venues last  week.
 
Senate Republicans informed Majority Leader Tom Daschle (D-SD) that they  might offer a comprehensive energy bill as an amendment to the economic stimulus  package slated to be considered in the near future if the Leader does not bring  an energy bill to the floor. A strategy previously considered, to attempt to  attach an energy measure to an appropriations bill, could have been blocked as  non-germane. 
 
Meanwhile, Sen. Daschle indicated that Congress might not be able to  conclude its work by Thanksgiving, and possibly would have to return to  Washington following the holiday. Many lawmakers had been focusing on a  mid-November departure date, with the latest continuing funding resolution set  to expire on the 16th.
 
And across Capitol Hill, House Energy and Commerce Committee Chairman Billy  Tauzin (R-LA) suggested that there will not be time to complete congressional  action on energy legislation this year, although he commented that the longer  lawmakers were in session, the better prospects would become.
 
***Senate Environment Hearing Points To Lack of Consensus On  Multi-Pollutant Measure*** 
 
Few signs of consensus emerged last week from a Senate Environment  Committee hearing on S 556, the Clean Power Act, introduced by the panel's  chairman, Sen. James Jeffords (I-VT). The chairman advocates resumption of  efforts to develop and pass a bill to significantly reduce emissions of SO2,  NOx, mercury, and CO2 by January 1, 2007.
 
Sen. George Voinovich (R-OH) spoke against the bill, explaining it would  "kill our economy," and that the "numbers in this bill are devastating." Sen.  Bob Smith (R-NH) said that current laws contain "obstacles to cleaning up the  air" and stressed the importance of addressing emissions separate from a command  and control system. Agreeing with Sen. Smith, Sen. Christopher Bond (R-MO)  termed S 556 the "wrong solution for the problem we face."
 
EPA Assistant Administrator Jeff Holmstead testified that the approach  offered in S 556 would unnecessarily raise energy costs and jeopardize energy  supplies. Current analysis suggests that it would result in a 32-50 percent  increase in consumer rates, he reported. 
 
Senate Environment plans a second hearing on S 556 in two weeks. This  session will give industry and others an opportunity to testify on the Clean  Power bill. However, with lawmakers considering a target adjournment date of  November 16, it appears that any future action on a multi-emissions bill may  have to wait until the second session of the Congress. 
 
EEI NEWS
 
***America's Electric Utilities Set to Operate Successfully In a Changed  Environment, EEI's President Emphasizes***
 
America's shareholder-owned electric utilities are "well positioned to  operate successfully in a changed world," EEI President Tom Kuhn said at EEI's  annual Financial Conference. The companies are responding effectively to  emerging business challenges, he indicated, as they continue to advocate public  policies to promote effective competition and help ensure a reliable and  affordable supply of electricity.
 
The environment in which the industry now is operating, EEI's president  noted, has been significantly affected by the terrorist attacks of September 11.  Today's most important mission is critical infrastructure protection, Mr. Kuhn  said, with a new EEI CEO task force working with a variety of stakeholders to  strengthen security procedures. 
 
Mr. Kuhn also highlighted the industry's financial performance, which  remains strong. Revenues were up approximately 63 percent during the first six  months of 2001, he reported, a trend that continued through the third  quarter.
 
***KeySpan Earns EEI Index Award***
 
The Institute has honored KeySpan Corporation for long-term financial  achievement with the EEI Index Award, in recognition of the company's 265  percent total return over the five-year period 1996-2000. The award was  presented by EEI President Tom Kuhn to KeySpan Chairman and CEO Robert Catell at  the association's 36th Financial Conference, held this week in New Orleans.  
 
The EEI Index of investor-owned electric utilities is a peer group index  that values total return on each electric utility over a five-year period. It is  regarded as a benchmark for long-term financial performance, and is used by over  one-third of EEI member companies in their proxy statements. 
 
For the 1996-2000 period, KeySpan's 265 percent return topped the EEI  Index. Other leading performers included Black Hills Corporation, with a return  of 240 percent; MDU Resources, 201 percent; Exelon Corporation, 196 percent; and  Cleco Corporation, 163 percent 
 
"KeySpan's financial success is impressive, and it stands as a tribute to  its management and employees," Mr. Kuhn commented. "Over the past five years,  KeySpan consistently produced improved financial results through key  acquisitions and a growing gas distribution network, pleasing both customers and  shareholders."
 
***EEI Expresses Interest in Working With Task Force Established by  President To Bolster Infrastructure***
 
It is critical for US economic prosperity and energy security that the  barriers to expansion of the nation's electric infrastructure be removed, and  EEI and its member companies will work with the Energy Task Force established by  President Bush to accomplish this objective, announced EEI last week. 
 
EEI provided its views in response to the Council on Environmental  Quality's request for input on the activities of the Energy Task Force  established by Executive Order 13212, signed by President Bush in May. In its  comments, EEI pointed out that with a multitude of federal agencies involved in  the permitting of energy facilities, the Task Force must facilitate effective  coordination among these units and more timely action on the issuance of permits  for generating plants and transmission lines. 
 
MERGERS & ACQUISITIONS
 
***FirstEnergy/GPU Merger Closes***
 
FirstEnergy has announced that its merger with GPU will be finalized  tomorrow. [NANCY, THIS TEXT IS FOR TODAY, IF IT GOES OUT TOMORROW, CHANGE IT TO  TODAY].   "With today's closing of our merger, we will begin operating  as a larger, stronger company, better positioned to provide significant benefits  t our customers, shareholders and employees," said CEO H. Peter Burg.   
 
FirstEnergy's board of directors now consists of 16 members-10 from  FirstEnergy and six from GPU.  
 
***Progress Energy Buying Two Plants From LG&E***
 
Progress Energy Corporation announced that their Progress Ventures unit  plans to buy two electric generating plants in Georgia from LG&E Energy  Corporation for $345 million.  The wholesale energy group is seeking to  expand its reach in the Southeast.  The two natural gas-fired projects,  owned by a subsidiary of LG&E, generate 1,182 megawatts of  electricity.  
 
The deal is subject to regulatory approvals, including approval from FERC,  and is expected to be completed by early 2002.
 
NEW GENERATION
 
***Wisconsin Energy Setting Up Generation Subsidiary***
Wisconsin Energy  has announced that it has created a subsidiary to design, permit, build and own  the new in-state power plants that are proposed as part of the company's Power  the Future strategy. Thomas Fehring, corporate secretary of WEC and Wisconsin  Electric-Wisconsin Gas has been appointed vice president and general manager of  the new subsidiary, which will be named W.E. Power. Mr. Fehring will report to  Richard Abdoo, WEC chairman, president and chief executive officer. 
"As we  move forward with Power the Future, it is vital that we focus on the flawless,  efficient and effective execution of the plant construction portion of this  plan," Mr. Abdoo said. "It is equally important that we continue to focus on our  current utility operations." 
The company has announced it will seek to build  2,800 megawatts of new, in-state generation, including two 500 megawatt combined  cycle gas-fired units at the company's existing Port Washington Power Plant  site, and three 600 megawatt advanced technology, coal-based generation units at  its Oak Creek Power Plant site. The Power the Future plan must still undergo  extensive regulatory review on engineering, cost and environmental issues. The  company plans to file the necessary regulatory applications and environmental  documentation associated with building the new electric generation, which will  fall under purview of W.E. Power, later this year.
 
***Calpine Plans 1,100 MW California Plant***
 
Calpine Corporation has announced it has applied to build a 1,100-megawatt  power plant in central California that could be in operation by mid-2004.   The proposed Central Valley Energy Center would be located in San Joaquin,  California.  "After the Greater San Francisco Bay Area, this is considered  California's most electrically vulnerable region," said Curt Hildebrand, Calpine  vice president of business development.  
 
ENERGY DATA    
 
*** Weekly Electric Output-Week Ending October 27***
 
Electric  output reached 65,184 GWh for the week ending October 27 with five of nine  regions experiencing a decrease in output compared to 2000.  The Pacific  Northwest region experienced the greatest decline, with an 18.4 percent decrease  from 2000 output levels.  Nationwide, there was a 1 percent increase in  output compared to the same week in 2000.  Year-to-date, the Mid-Atlantic  region experienced the greatest increase in output (4.7 percent) over 2000. For  more information, email alliance@eei.org .
 
The  Alliance Express is a free news service sponsored by the Alliance of Energy  Suppliers.  This document can be redistributed.  Please send  questions, comments, or requests to alliance@eei.org , or telephone  202/508-5680.
 
 
********** Several EEI meetings have been postponed or canceled.  For more information about a specific meeting, go to ( http://www.eei.org/resources/meetings/postponements.htm ) 
 - C.DTF