California Generators' Shares Tumble on Bankruptcy (Update1)
Bloomberg, 04/06/2001

Bear Stearns's Kevin Boone on Pacific Gas & Electric: Comment
Bloomberg, 04/06/2001


California Generators' Shares Tumble on Bankruptcy (Update1)

    (Adds Enron comment and updates share prices. For more on the
California electricity crisis, see {EXTRA <GO>}.)

     Houston, April 6 (Bloomberg) -- Shares of California power-
sellers Mirant Corp., Duke Energy Corp. and Dynegy Inc. fell more
than 9 percent after Pacific Gas & Electric Co., the state's
largest utility, filed for Chapter 11 bankruptcy protection.
     ``The concern with the generators is clearly that they're not
going to get paid anywhere near (the price) they sold power for to
the California grid,'' said David Schanzer, a Janney Montgomery
Scott LLC analyst.
     Shares of Atlanta-based Mirant, which owns California plants
able to produce enough power to light 3 million homes, fell as
much as 10 percent to $27.70 earlier. The stock was down 94 cents
at $29.96 in late trading.
     Charlotte-based Duke, which produces 3,000 megawatts, or
about 5 percent of the state's power, fell $2.20 to $40.20 after
reaching $38.44, down 9.3 percent. A megawatt is enough to light
1,000 typical U.S. homes.
     Houston-based Dynegy, which controls 2,800 megawatts of power
in a partnership with NRG Energy Inc. of Minneapolis, fell $3.11
to $47.81 after falling as much as 9.7 percent to $46. NRG Energy
shares fell $1.50 to $29.90.
     Calpine Corp., a San Jose, California-based generator and
power-plant developer, fell $5.04, or 9.9 percent, to $45.60.
Houston-based Reliant fell $1.85 to $43.50. Tulsa, Oklahoma-based
Williams Cos. fell $1.17 to $40.70.
     Enron Corp. of Houston, which sells power and natural gas in
California, fell $1.56 to $54.14. Enron's exposure to Pacific Gas
& Electric ``will not have any material effect on earnings or our
financial condition,'' Enron spokesman Vance Meyer said. Enron is
the world's biggest energy trader.
     Pacific Gas & Electric, owned by San Francisco-based PG&E
Corp., and Edison International's Southern California Edison, the
state's second-largest utility, together have losses of more than
$14 billion because they paid more for electricity than state
regulators allowed them to charge consumers.
    Shares of PG&E fell $4.31, or 38 percent, to $7.07. Trading
was halted earlier before the bankruptcy announcement. Edison fell
$4.49, or 36 percent, to $8.15. The company said it still expected
the state to work out a plan to end the energy crisis.

--Margot Habiby in the Dallas newsroom (214) 740-0873, or
mhabiby@bloomberg.net, with reporting by Mark Johnson in
Princeton, through the Princeton newsroom,
(609) 279-4000/taw/alp/p


Bear Stearns's Kevin Boone on Pacific Gas & Electric: Comment
2001-04-06 16:47 (New York)


     (For more stories on the California energy crisis, see
{EXTRA <GO>}

     New York, April 6 (Bloomberg) -- The following are comments
made by Kevin Boone, a bond analyst at Bear Stearns & Co., on the
filing for Chapter 11 bankruptcy protection by PG&E Corp.'s
Pacific Gas & Electric, California's largest investor-owned
utility.

     ``It's obviously a big surprise. I'm not sure it's going to
be the most constructive way to solve the issue, but it may
eliminate the political element of the equation, make it a matter
of law and keep the extraneous things out of the equation.

     ``There really were too many cooks in the kitchen. This will
isolate it, so to speak, and get the parties in a room together
where they can hammer out the desired objective.''

     ``PG&E obviously thought this was a way to push the
negotiations along and create a more favorable result. Going
through the channels they were going through wasn't going to get
them a solution to the problem.''

On Davis' televised speech on the energy crisis Thursday night:

     ``I thought his comments were a step in the right direction.
I thought they were very positive. PG&E was not looking for a
small step. They were looking for a giant leap to the solution of
this problem.''

On market reaction:

     ``Certainly with the selloff we've seen today with both
Edison and PG&E in the equity market, it indicates it's a
potential stumbling block'' for Edison International and Sempra
Energy to reach bailout agreements with the state.

--Mark Johnson in the Princeton newsroom. (609) 279-4017 or
mjohnson7@bloomberg.net/pjm