FERC Price Cap Order Client Conference Call
Today, Thursday, April 26th at 11:30am EDT
Host: Ray Niles

Late last night the Federal Energy Regulatory Commission ("FERC") acted to
impose "temporary" wholesale power price caps in the western United States.
*	The cap affects the "real-time" market, which we estimate is only 5%
of the total wholesale market; it is set to           expire in one year
from May 1
*	This is a near-term negative for Power Producers and Energy
Merchants, a dramatic example of "headline risk". The political risk of
re-regulation has stepped up, in our view, reducing the multiple investors
will pay for earnings
*	In terms of earnings, ironically, the effect may be somewhat
positive, albeit small (only 5% of market is affected). Caps are likely to
increase volatility, benefitting Energy Merchants, and sustain high power
prices for a longer period of time, benefitting Power Producers, by reducing
the incentive to build new plants.

Call In					Replay
Reservation
800-229-0281 US			800-642-1687 US			758540
706-645-9237 Int'l			706-645-9291 Int'l
replay until 4/30, 11:59pm

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

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