I forget.  What's the Governor of Montana's position on price caps in the 
West?

Best,
Jeff
----- Forwarded by Jeff Dasovich/NA/Enron on 04/09/2001 01:27 PM -----

	Lynnette Barnes
	04/09/2001 01:15 PM
		 
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		 Subject: PPL Montana shows lucrative profit











PPL shows profits in 2000 
By The Associated Press 
HELENA (AP) ) Reports filed with the Securities and Exchange Commission show 
PPL Montana made handsome profits in the lucrative Western power market in 
2000. 
PPL Montana owns most of the former Montana Power Co. electric-generating 
plants in the state. In documents filed last month, the company reported 
$86.7 million in net income for 2000. 
The bulk of those profits came in the final three months of the year, when 
regional power prices soared to record heights. PPL Montana reported $68.7 
million net income for that period, or more than triple what it earned the 
first nine months of the year. 
PPL Montana also made these profits despite its obligation to supply 285,000 
Montana Power Co. customers with relatively cheap power, under a contract 
that expires next year. 
Company officials said that since PPL Montana acquired the facilities in 
December 1999, the company has sold about 69 percent of the power generated 
to Montana Power Co. and other marketers for resale for end use in Montana. 
Power left over after supplying the MPC customers is sold on the open market 
to suppliers, who sell inside and outside Montana, resulting in its most 
lucrative profits. 
The power that PPL Montana sells to the Montana Power residential and small 
business customers is priced at about $22.25 per megawatt hour (mwh). Sales 
in the unregulated regional market are anywhere from $75 to $300 per mwh or 
higher. 
PPL Montana,s marketing division has refused to offer power to any Montana 
customers at below-market prices, as have other marketers. 
Some have said if PPL Montana made $87 million last year while supplying MPC 
customers at $22.25 per mwh, why can,t it offer power at $35 to $40 per mwh 
and still make considerable money? 
PPL director of corporate communications Dan McCarthy said it,s not that 
simple. He said other factors may influence sales and production, including a 
low-water season this year, which would reduce the output of hydroelectric 
plants and force the company to buy power on the open market to supply its 
customers. 
&You can,t extrapolate these numbers and say we,d make double (the profits) 
at double the price,8 he said. 
He also said last year,s $87 million in profits is little more than a 10 
percent return on the company,s $800 million investment in the power plants ) 
about the same return made by Montana Power on its formerly regulated assets. 
However, a Montana mining executive who,s been following PPL Montana,s 
finances said last week that a 10 percent return after profits is a very good 
return. 
Greg Stricker, president of Montana Resources Inc. in Butte, also noted that 
the high market prices for electricity that helped PPL triple its profits in 
the final quarter of last year are still in effect, and are expected to stay 
high this year. 
If the company,s profits for the fourth quarter of 2000 are spread over a 
year, PPL Montana would see a $275 million profit, or a return of 30 percent 
to 35 percent on investment, Stricker said. 
As part of its expenses, PPL Montana reported spending nearly $92 million to 
buy power on the market to fulfill its supply contracts. However, that amount 
did not increase markedly in the final quarter of last year.