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===============================================================
SCIENTECH IssueAlert, December 4, 2000
AES Expands Into South American Hotbed Columbia
By: Susan Kellogg, Issues Analyst
===============================================================

AES Corporation announced further international expansion through its 
acquisition
of KMR Power Corporation ("KMR"), a privately owned electric power plant
developer and operator in Colombia, South America. KMR has controlling
interest in three natural gas-fired power plants having a total capacity
of approximately 600 MW.  AES will be acquiring two of the three natural
gas-fired power plants located in Cartagena  through a 100% interest in
the 314 MW TermoCandelaria power plant and a 62% interest in the 90 MW
Mamonal plant.

ANALYSIS: AES continues its "non-strategy" of acquisitions in the purchase
of KMR. In a recent interview with Dennis Bakke, AES CEO, I asked him several
times about AES "strategic plans," to which he answered, "We don't have
(one)."  Ideas often flow from the bottom up in the mega-power company
due to its decentralized structure.  Decisions are made in response to
a unique company mission which is "to serve the world and steward its 
resources,
making clean, safe, reliable electricity available."

So why venture into Colombia, a hotbed of political and social upheaval
with an uncertain business environment? A risky business by many energy
companies' standards.  But AES has created a dramatic international network
guided not essentially by the almighty dollar, according to Bakke. "We'll
go anywhere we are needed, or wanted, and can live our values and principles."

So, given its unique company policies and experience in South and Central
America, KMR is a prime target. AES is perhaps the most suited to successfully
penetrate the dictatorial climate of Colombia and spark a change as they
do what they do best * buy, command and redirect electric service from
that monopoly into a clean, reliable and democratically supported power
service.

AES has made headlines throughout the year 2000 with its continuing list
of acquisitions and development in countries including Chile, Bolivia,
Argentina, Dominican Republic, El Salvador, England, Tanzania, Venezuela,
Puerto Rico, Brazil, Bulgaria, Republic of Georgia, and most recently,
Oman.

The acquisition of the Venezuelan utility C.A. La Electricidad de Caracas
(EDC) captured the headlines for several months earlier this year. AES
was involved in what was billed as a "hostile takeover," in a process that
intrigued the energy community.

AES purchased approximately 35,529,500 American Depository Shares (ADSs)
- including ADS's subject to guaranteed deliveries, representing approximately
49% of the outstanding shares. Dennis W. Bakke commended the Comision Nacional
de Valores, the Venezuelan Securities and Exchange Commission, on its final
action to allow AES to extend its offer after several stressful attempts
to close the deal.  But Bakke said the action would send a strong positive
signal for foreign investment in Venezuela.

"We were hoping to serve that country and we thought we could do a lot
better job than was being done by EDC. We didn't give a second thought
about controversy. We knew this was the right thing to do."

Bakke maintains that Venezuela has been run by a handful of very wealthy
and powerful families for many years. AES has the clout, the money and
the mission to go in, shake things up and, in line with AES' goals,  "to
create a stronger economy, a more competitive society." The strategy in
Colombia appears to continue that focus in South America.

"We've made a lot of changes (in the company) and it's not only going to
change Venezuela, but I think it will make a big difference in the neighboring
states as well."

Bakke is irrepressibly enthusiastic about the AES mission, although admitting
that maintaining its lofty principles is a challenge.

"(Our position and principles) seem to always be under attack," said Bakke.
"I know of no other corporation in the world of any significance that sees
its role in the world the way we do. But, our purpose has grown over the
years and actually deepened as we've expanded further and further into
the world."

AES has had another winning year. A world leader in generation, its value
has doubled in the past year,  Generating assets include one hundred and
twenty-five facilities totaling over 44,000 MW of capacity world wide.


Can it continue balancing the tightrope of economic growth and philanthropic
philosophy? So far, AES seems to have been "touched by an angel" in its
endeavors into areas where "others fear to tread."

For the complete interview with Dennis Bakke, see current PowerHitters
feature: http://www.consultrci.com/web/infostore.nsf/Products/PowerHitter

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SourceBook Weekly December 4, 2000 Issue: 
http://www.consultrci.com/web/rciweb.nsf/Web+Pages/SBEntrance.html

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MISO: What Is the Future of the Midwestern Transmission Grid?
By Susan Kellogg

The Midwest Independent Transmission System Operator (MISO) has been in
a state of flux as of late, as its expansion efforts have taken some dramatic
turns with major players announcing to withdraw from membership.

http://www.consultrci.com/web/rciweb.nsf/Web+Pages/SBEntrance.html
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FERC Under Fire:
California IOUs Respond to Proposed Order with Sharp Criticism
By Stephanie Hainsfurther

The Federal Energy Regulatory Commission's (FERC's) concession that the
market rules and structure for wholesale of electricity in California are
"flawed" resulted in a 77-page proposal early in November to repair the
situation. The reaction from California's three investor-owned utilities
(IOUs) was immediate and overwhelmingly critical.

http://www.consultrci.com/web/rciweb.nsf/Web+Pages/SBEntrance.html
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Essential.com Partners with Shell:
Alliance May Provide Edge Over Utility.com
By Stephanie Hainsfurther

In a small step forward for its Internet energy services, Essential.com
has partnered up with Shell Energy to offer a lower-cost natural-gas choice
to customers of Atlanta Gas Light. It appears that both companies will
benefit immensely from the partnership, but in very different ways.

http://www.consultrci.com/web/rciweb.nsf/Web+Pages/SBEntrance.html
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Allegheny Energy:
Forging Ahead in Generation Deal with Enron
By Rosalie Rayburn

Allegheny Energy's recently announced purchase of three gas-fired merchant
plants from Enron North America reaffirms its strategy of expanding its
geographic footprint and strengthening its unregulated generation capability.
From Enron's point of view, the sale confirms its stated policy of pursuing
"contractual" rather than "physical" assets.

http://www.consultrci.com/web/rciweb.nsf/Web+Pages/SBEntrance.html
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Energy Privatization in Mexico:
The Future Rests in the Hands of a New Administration By Susan Kellogg

Energy privatization and the future of electric supply and demand are issues
to be dealt with by Mexico's new president, Vicente Fox, as took over the
helm of the country on Dec. 1.

http://www.consultrci.com/web/rciweb.nsf/Web+Pages/SBEntrance.html
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Williams Communications Continues Spin-Off Trend
By Will McNamara

Williams is planning a spin-off of its Williams Communications (NYSE: WCG)
subsidiary, which should take effect the first part of next year.

http://www.consultrci.com/web/rciweb.nsf/Web+Pages/SBEntrance.html
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