>  <<powergen-firstcall1.pdf>> 
> 
Good Evening, 

> Attached, please find an abridged version of our 76-page report in which
> we provide our supply and demand outlook for 12 regions across the US.  
> 
> Summary:
> 1. The Power Markets Are Regional In Nature   The fragmented US
> transmission system results in significant regional power pricing and
> economic disparities.  In order to fully understand this industry, macro
> analyses of the US market must be supplemented with an in-depth assessment
> of its individual regions.
> 2. Announced Projects Cannot Be Taken At Face Value   Out of the 285,487
> MW of project announcements we have identified, only 26% are actually
> under construction.  Our base case analysis suggests that only 53%
> (149,944 MW) of the announced projects will be completed.
> 3. Shortages Will Persist In Several Key Markets   Owing to a combination
> of current supply shortages, capacity retirements and demand growth, we
> estimate that the entire US will need 207,689 new MWs by 2006 in order to
> achieve an equilibrium 18% capacity margin.  This requirement is 39% above
> our base case buildout forecast.  Consequently, we project a 2006 capacity
> shortfall of 57,745 MW.  Our analysis indicates that supply shortages will
> be most pronounced in the Mid-Atlantic, New York, parts of the Midwest,
> and the Southeast.
> 4. Positive Implications For Generators   Our findings have positive
> implications for selected generators.  We believe that Calpine (CPN,
> Strong Buy), Entergy (ETR, Buy), Mirant (MIR, Buy), NRG Energy (NRG, Buy),
> PPL Corp. (PPL, Buy), and Reliant Resources (RRI, Buy) are best positioned
> within this market.  
> 
> Regards,
> 
> Neil Stein   212/325-4217

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