<<IPPupdate092201.pdf>> 

Good Morning

Attached, please find our Power Generation Update issued this morning.  

1. EIX Bankruptcy Filing?-Implications for the IPPs   Recent press reports
have suggested there is a growing likelihood that an involuntary bankruptcy
petition will be filed against Southern California Edison, the utility
subsidiary of Edison International (EIX, Not Rated).  We thought it would be
timely to analyze the implications of an SCE bankruptcy for the IPPs.

2. SCE Bankruptcy Would be Neutral for the IPPs   Our overall conclusion is
that an SCE bankruptcy would be neutral for the sector:

	A.	Such an event would have no impact on the earnings estimates
or forecasted growth rates for any of the companies under our coverage.  

	B.	In addition, none of the companies have any direct
receivables exposure to SCE.  

	C.	Finally, we believe reserves taken against accounts
receivable balances from the CalISO and PX across the sector adequately
mitigate exposure to potential bad debt writedowns.

3. Updated Accounts Receivables Exposure Included   Included in the note are
updated details on the accounts receivables exposure of all the IPPs with
California operations.

Regards,

Neil Stein   212/325-4217

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