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BW2009  JAN 17,2002       2:05 PACIFIC      05:05 EASTERN


( BW)(TX-INDUSTRIAL-INFO-RES) Energy Producers Continue Expansion
Plans Despite Cautious Market in 2002, in an Advisory by
Industrialinfo.com

    Business/Energy Editors

	   HOUSTON--(BUSINESS WIRE)--Jan. 17, 2002--The following is an
advisory by IndustrialInfo.com (Industrial Information Resources Inc;
Houston). It seems as though it was just yesterday that the California
energy crisis was reaching catastrophic proportions and Governor Davis
(CA) had all but deemed Houston the evil empire of the universe. All
eyes were on the states with deregulation looming on the horizon and
wondering if the next deregulated state would follow in the steps of
California. State governors and a newly elected Bush Administration
were scrambling for answers to prevent a regional crisis from becoming
a national nightmare. Prior to that Industrial Information Resources
had identified over 300,000 megawatts of new generation either under
construction or in various stages of planning and development. The
solution then was to build more power plants and add new capacity.
Also in response to the shortfall of energy production, the National
Energy Policy estimated the need for 1,300 new power plants to meet
future demand. Developers responded in kind, taking an aggressive
approach to meet our new electrical needs by developing and building
new power plants at alarming rates.
	   Wow! What a difference a year makes. Due to new capacity, milder
seasons and a shaky economy, lower demand and prices are causing some
to question the validity of the national energy crisis. No less than
seven states have delayed deregulation placing in question the future
developments of some new plants. Our economy, already in recession
took a nose-dive after the tragic events of Sept. 11, 2001, further
reducing demand primarily from industrial and commercial customers. To
close out the year we witnessed the demise of the Enron Corporation,
which could have far-reaching effects in the industry. As a result
many developers are heading into 2002 with a more cautious approach to
constructing new power plants.
	   On Wednesday one of the most aggressive developers in the
industry, Calpine Corporation (NYSE:CPN) (San Jose, Calif.) outlined
their revised future development program in a conference call hosted
by Pete Cartwright (chairman, CEO & president), Robert Kelly
(president of Calpine Finance), Charles Clark (senior VP & corporate
controller) and other members of Calpine's management team. Calpine
announced plans for completion of twenty-seven projects representing
15,200MW currently under construction. "Upon completion of
construction of this program, Calpine will have a portfolio of
26,300MW of the most efficient power plants in the United States by
the end of 2003," stated Cartwright. Plans are to proceed with
thirty-four projects in advanced development accounting for 15,100MW
of capacity. Development of these projects will be completed to a
point where they are ready to begin construction and then will be
placed in "hot standby" according to Mr. Cartwright. "We have ordered
all these projects be put on hold and no capital spending will take
place until we have had opportunities to do a thorough review of each
project." Calpine had planned to spend about $2 Billion on advanced
projects in 2002. "We intend to keep going with these projects when
conditions are right. We do not intend to have any significant
cancellations." Plans are to continue with approximately 30,000MW in
early development originally scheduled to be completed by 2006. In
contrast, Cartwright says a number of his competitors are cancelling
and selling off their projects. In his address, Mr. Cartwright also
commented on the status of power markets, availability of capital and
earnings. "Our goal, as it's always been, is to grow Calpine to become
the largest and most profitable power generator in North America."
	   Calpine is certainly not the only power plant developer to
announce revised programs for the coming year. Companies such as NRG
Energy, Dynegy and El Paso Merchant Energy have also announced a
review of their strategies. Research conducted by Industrial
Information Resources has identified over 50,000MW of cancelled
projects since June of 2001, including projects by PPL and Mirant.
"While this is a major contrast from the beginning of 2001, all we
need is a speedy economic recovery, a harsh winter and a scorching
summer and it could be deja vu all over again," according to Britt
Burt manager of power market research for Industrial Information
Resources.
	   Industrialinfo.com provides daily news related to the industrial
market place including industry alerts and databases for the energy
and industrial markets. For more information on trends and upcoming
construction activities for the energy and power markets as well as
other industrial sectors send inquiries to
powergroup@industrialinfo.com or visit us at www.industrialinfo.com or
www.iirenergy.com.

    --30--HM/ho*

    CONTACT: Industrialinfo.com, Houston
             Britt Burt, 713/783-5147

    KEYWORD: CALIFORNIA TEXAS
    INDUSTRY KEYWORD: ENERGY OIL/GAS UTILITIES
    SOURCE: Industrialinfo.com

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