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FINANCIAL REPORTING......... A sampling of articles from three decades of financial reporting, limited to those I've been able to find in digital form or digitize. Broken Mergers In the first quarter of 2001 two utility merger deals broke up on uncharted shoals. ConEd's $7.5 billion deal with Northeast Utilities did so in full public view, resulting in six articles over two and a half weeks. While all this was going on, trouble was brewing for the $7.9 billion deal to combine Entergy and FPL into the nation's largest power distribution utility. There wasn't a hint of the problems until April Fool's weekend when the breakup was announced. Public Service Electric & Gas Over the years, Jim has written many articles about PSE&G, New Jersey's largest utility. One of the first was published by The Oil Daily in November 1973, two months after the energy supply interruption that became known as Arab I and the same day an article appeared on President Nixon's energy plan, which promised freedom from imports by 1980. In early February 1997, Jim spent a day with PSEG executives while the restructuring process was underway in New Jersey. The result was one article filed that day which wasn’t saved and three
Probably the shortest-lived tech stock bubble of the 1990s was the one enjoyed by fuel cell shares. Putting the ‘Fuel’ back in Fuel Cell Stocks
StreetInsider.com's Current Featured Article 02/13/04 Fuel cell stock advance pauses for profit taking Reuters January 25, 2000
Exelon profit hit by economy, market
Reuters September 27, 2001 Exelon target cut trips Utility Stocks Reuters September 28, 2001
Allegheny sees net at upper end of range
Reuters July 27, 2001
Calpine Gets Trading Muscle Back With CalBear
California Energy Circuit, September 23, 2005
Investment banker Bear Stearns’ desire to become involved in energy market is providing Calpine with the financial means to again be a major energy trader. The deal not only allows for adding volume in the trading market, it also cuts Calpine’s capital needs by providing a credit line to cover the cost of power plant fuel until the electricity is paid for weeks later.
Under an agreement announced early this month, Bear Stearns has formed an energy trading subsidiary – CalBear Energy. CalBear will use the services of a new Calpine unit – Calpine Merchant Services (CMS) – as the exclusive agent for power and natural gas trades the investment banker’s clients make through CalBear.
CMS is being formed from the Houston-based staff and systems of Calpine Energy Services (CES), which will conduct its trading through CalBear using a $350 million credit line provided by Bear Stearns.
Calpine’s venture "reintroduces a major player" to the Western power market, said Gary Ackerman, Western Power Trading Forum executive director. The $350 million credit line got Ackerman's attention.
"Credit buys everything," he said. The Bear Stearns credit line will allow Calpine to again trade electricity in the forward market, adding volume - - and increased liquidity - - to the market.
While Calpine’s 41 gas-fired and geothermal power plants provide about 10 percent of California’s electricity, credit restraints have limited Calpine’s participation in the state’s power market, said Calpine Energy Services President Paul Posoli. He explained the company is paying for a large portion of its fuel daily while not getting paid for power until the 20th day of the following month.
Sam Molinaro, Bear Stearns’ Chief Financial Officer, explained the credit provides Calpine with the ability to sell power and acquire gas up to 61 days in advance through CalBear.
Replacing the Calpine Energy Management credit facility now being used to finance the power payment delay with trading through CalBear is expected to free up at least $200 million by the middle of 2006, Posoli said.
He told California Energy Circuit CalBear trading is expected to start in November following approval of the venture by the Federal Energy Regulatory Commission, which is expected in mid-October.
In addition, CalBear will allow Calpine to provide liquidity for those looking to invest in power generation assets, Posoli said.
“A lot of capital” has been looking for such opportunities over the last two or three years, he said, noting an increase in such searches over the past 12 months.
When CalBear was announced, officials of both Calpine and Bear Stearns explained the venture would pay for CMS’ services with half of CalBear’s profits. CMS will also earn trading fees from CES and will pay any earnings to Calpine Corp.
The venture structure allows “Calpine to retain our people and systems, and retain full control over the (company’s) generating assets and their related economics,” Posoli told analysts. “Bear Stearns avoids significant barriers to entry and gets an immediate presence in the growing energy markets.”
Through CalBear, Molinaro said, Bear Stearns “will be able to take advantage of this compelling market opportunity without the need to incur significant startup costs or to make risky and expensive acquisitions.”
Jim Brumm
StreetInsider.com's Current Featured Article 02/13/04
Putting the ‘Fuel’ back in Fuel Cell Stocks
Four years after testing the price stratosphere, the stocks of fuel cell makers are again attracting the attention of Wall Street analysts.
The reasons are easy to find -- ranging from more analysts looking for stocks to write about to such traditional factors as consolidation, sufficient cash on hand, increased government subsidies, relatively low stock prices, and investors’ fears of being left behind the next stock price surge.
The industry, known for its hype during the tech stock boom of the late 1990s, is now talking about a fuel cell in every car, a fuel cell in every community and a fuel cell in every laptop and portable tool.
Calling fuel cells a breakthrough technology, James Throckmorton says “this scenario is at least feasible in the future.” He’s the managing director of Foster Bryan Ltd., an Atlanta-based research firm that started looking at fuel cells 18 months ago and now believes the industry’s “day will come, (but) not soon, though.”
The “not soon” is at least five years away, according to David Kurzman, an analyst who has covered fuel cells since the glory days. Noting he hasn’t published any recommendations since joining Needham & Co a few weeks ago, Kurzman declined to comment on specific issues.
Describing fuel cell shares as “hot, cold and hot again,” he cautioned that any successful stock needed four critical factors: a commercially available product, meaningful partners, and sufficient cash to realize its vision and a clear path to profitability within 12 months.
Finding this information will be hard, for the renewed heat has attracted a lot of wannabes -- a lot of companies that are related to fuel cells “because they tell people they’re related, “was the way one Canadian analyst put it.
Declining to be identified because he hasn’t published his recommendations, the analyst described fuel cells as an investment for those who believe a hydrogen economy will develop. “If you don’t believe, you shouldn’t invest,” he said, adding “If you do (believe), look for those (companies who are) truly involved.”
That search will be extensive. In 2003 alone over 100 entities -- companies, partnerships, associations, universities and governments -- had announcements they said were related to fuel cells, according to Energy
Info Source Inc’s Fuel Cell Yearbook -- 2003 Edition.
About 60 of these companies are publicly traded or at least partially owned by a company with a traded stock. They range from such giants as General Motors (NYSE: GM), which continues to test fuel cells in cars,
and DuPont (NYSE: DD), which wants to supply fuel cell components; to the relatively tiny like Energy Visions Inc (Other OTC: EGYV), a Richmond Hill, Ontario-based company that owns a controlling interest in a developer and maker of batteries with advanced technologies.
In between is the more typical fuel cell maker, Plug Power Inc (NASDAQ: PLUG) which went public in October 1999 at 15 and traded as high as 150 the following spring. Last March, after participating in the industry consolidation by acquiring H Power Corp, Plug Power traded near 5. Last month, the stock approached 11 before backing off.
The merger and a private stock placement added about $85 million to the value of Plug Power’s capitalization in 2003, when it moved to speed revenues by marketing components of its fuel cell system as well as the
entire system. The company was founded as a partnership between DTE Energy (NYSE: DTE), the parent of Detroit Edison which supplies electricity in southeastern Michigan, and Mechanical Technology Inc
(NASDAQ: MKTY), which is now focusing on the development of micro fuel cells. DTE still has a 19.4 percent stake while Mechanical Technology has reduced its interest to less than 10 percent. Other owners include
General Electric (NYSE: GE) with 7.8 percent, and Engelhard Corp (NYSE: EC) and First Albany Cos Inc (NASDAQ: FACT) with less than 5 percent each, according to Plug Power Chief Financial Officer Dave
Neumann. Despite the company’s improved capitalization, TD Securities’ analyst Chris Kwan is recommending that investors reduce their holdings, explaining the shares are “expensive based on revenues.” He also has a
“reduce” rating on Ballard Power Systems Inc (NASDAQ: BLDP) due to competitive pressures which are expected to slow down revenues in 2004
Kwan said he likes Fuelcell Energy Inc (NASDAQ: FCEL) and Hydrogenics Corp (NASDAQ: HYGS) without offering any specifics. Another analyst looking at these stocks, Andrew Bradford of Raymond
James, rates Ballard at market perform and Hydrogenics as outperform.
The Winslow Green Growth Fund is now investing in energy technology via “players that are selling into the makers of fuel cells,” according to co-portfolio manager Matt Patsky. To date, the only such shares acquired are those of Quantum Fuel Systems Technologies Worldwide Inc (NASDAQ: QTWW), a maker of hydrogen fuel systems for fuel cells. These systems include hydrogen tanks, pressure regulators and associated hardware.
While the jury is still out on the timing of main stream fuel cell adoption, it is clear to many that the life-changing significance of the technology cannot be ignored. As the story plays out, there will be big winners and big losers, fortunes made and fortunes lost. Savvy investors should not overlook the sector.
END
By Jim Brumm for StreetInsider.com. Mr. Brumm is a financial reporter who has focused on energy equities for more than 3 decades. Four years earlier, profit-taking tripped these same stocks.
January 25, 2000
Fuel cell stock advance pauses for profit taking
By Jim Brumm
NEW YORK, Jan 25 (Reuters) - The stocks of fuel cell related companies dropped in active trading Tuesday as profit taking caught up with this month's technology high flyers.
The sharp rises started with Plug Power Inc., which began the year trading at 26. It reached a high of 84-3/4 four days later on Jan. 7 -- a price that was exceeded on Jan. 19 when the stock traded as high as 87 on its way to Monday's record 156-1/2. Tuesday it dropped as low as 115 before recovering to close at 131, down 5-1/2, on volume of nearly 2.7 million shares.
Even Mechanical Technology Inc., which gained 12-1/3 Tuesday to close at 65-3/4 on trading of over 1 million shares, was well below its high for the session -- and new all-time high -- of 72-7/8. Mechanical Technology founded Plug Power in May 1997 with DTE Energy Co., which was off 1-13/16 at 35-3/4 in advance of its expected earnings release Wednesday. The two companies each retain a 32.5 percent interest in Plug Power, which also has attracted investments from General Electric Co. and Sempra Energy -- both of which were fractionally higher Tuesday.
FAC/Equities alternative energy analyst Brian Fernandez estimates there is a $1.0 billion U.S. market for Plug Power's 7 kilowatt fuel cells at a cost per unit of $4,000, adding this puts the market for the units which are expected to go on sale next year at 250,000.
"We think the mass market potential exceeds $100 billion," he wrote in a report this month.
Fernandez believes Plug Power's technology became economically attractive when it "reduced the cost of platinum (in the cell's catalyst) down to $5 per fuel cell."
Platinum producer Johnson Matthey Plc was up 4.25 percent in London trading Tuesday after a 10 percent Monday gain. But the only U.S. producer of platinum group metals, Montana-based Stillwater Mining, eased 5/8 to 33-1/4 Tuesday.
SatCon Technology, which produces Plug Power's energy management controls, remained below Monday's all-time high of 29-15/16, but managed to end Tuesday's session up 3-5/8 at 25-13/16 on trading of 758,000 shares. SatCon is 7 percent owned by DQE Inc., which eased 1/16 to 45 Tuesday after trading at a new high of 53 Monday when ABN AMRO analysts pointed out its SatCon holding was worth $4 per DQE share.
FuelCell Energy , a maker of 250 kilowatt fuel cells selected for installation by the Los Angeles Department of Water and Power, slipped 3 Tuesday and closed at 43.
Canada's Ballard Power Systems, a fuel cell pioneer, also slipped 0.40 in Toronto trading, closing at 93.50.
And Avista, a Spokane, Wash., based utility holding company that joined the fuel cell climb in mid-month slipped 7-3/16 to 46-15/16 on composite trading of 3.2 million shares. It climbed as high as 68 Monday, from 16 on Jan. 11, after Microsoft Chairman Bill Gates purchased a 5 percent of Avista's shares and linked his investment to its fuel cell activities.
September 27, 2001, 10:53 AM CDT
Exelon earnings hit by economy, stock market
By Jim Brumm
Reuters
NEW YORK -- Exelon Corp. (EXC.N), one of the largest U.S. utility operations, today cut its 2001 earnings target and said another 450 jobs would be eliminated due to economic and market weakness and volatile energy markets.
The company cited cooler weather for the volatility in energy prices and said a drop in telecommunications stocks had hurt its investments.
"While we instituted cost-containment efforts to address the economic weaknesses in the third quarter, the revenue impact of recent events cannot yet be quantified," Co-Chief Executive Corbin A. McNeill added.
Shares of Exelon, formed last October when Philadelphia Electric Co.'s parent company acquired Chicago's Commonwealth Edison, dropped about 23 percent to $38.99 a share in morning trading, the lowest since early April, 2000 when it was being traded as PECO.
The company said it now expects third-quarter earnings of $1.10 to $1.20 per share. It previously said earnings in the third quarter would be $1.35 to $1.80, based on 30 percent to 40 percent of its full-year earnings target of $4.50 per share.
Based on that outlook, analysts told Thomson Financial/First Call, they expected third-quarter earnings per share ranging from $1.51 to $1.62, resulting in a consensus earnings of $1.57, which the analysts compared to $1.41 one year ago.
Exelon said pro forma earnings in 2000's third quarter, assuming the company was formed on January 1, 2000, were $1.27 per share.
Given reduced expectations for the third quarter and the recent economic uncertainty, Exelon said its full-year earnings guidance is being reduced to a range of $4.30 to $4.45 per share.
Analysts had used its previous guidance as a base, saying they expected earnings per share of $4.50 to $4.75, resulting in a mean of $4.58 compared to last year's $3.86.
THE DRAG OF LITIGATION, JOB CUTS
Exelon said its core operations continue to perform well. The nuclear power plants, owned jointly with British Energy, have operated above target with a 96 percent capacity factor through August 31. Energy delivery operations, which distribute natural gas and electricity to some 5 million customers, have provided improved reliability with below-budget expenditures, and merger-related synergies continue to be on target for $148 million in savings this year.
But lower power prices and reduced market volatility due to cooler weather last summer hurt trading profits in the third quarter. In addition, its generation unit recorded an increase in its litigation reserves of $14 million.
Also reducing earnings will be severance costs of $30 million in the third quarter and $18 million in the fourth for the latest job cuts, which are in addition to the 2,900 positions previously announced in conjunction with the merger.
Exelon Enterprises has experienced weakness all year in its businesses related to the downturn in the telecommunications market. In the third quarter, the company said, it anticipates a $36 million write-down of its holdings in Corvis Corp. (CORV.O), a telecommunications equipment manufacturer. The Corvis shares were received through venture capital fund investments.
Margins in Exelon Infrastructure Services are greatly reduced, due to the fall-off in telecommunications infrastructure build-out across the country.
Copyright © 2003, Chicago Tribune
Exelon's earnings target cut raised investor concerns about the outlook for other utilities, triggering a stock price decline that had a noticeable impact PPL Corp. and Duke Energy Co. shares the next day -- Friday.
Reuters 2001-09-28
Exelon Target Cut Trips Utility Stocks
By Jim Brumm
NEW YORK (Reuters) - Exelon Corp., one of the largest U.S. utility operations, on Thursday cut its 2001 earnings target, raising investor concerns about the outlook for other utilities.
The resulting stock price decline had a noticeable impact PPL Corp. and Duke Energy Co. shares, triggering affirmations of previously announced outlooks.
In conversations with utility analysts, Exelon management attributed the reduced targets to lower than expected power marketing earnings due largely to weather-driven power price declines.
The company's announcement cited the cost of job cuts, the drop in telecommunications stock and economic weakness in addition to lower than expected prices for electricity during the key summer cooling season.
PPL, ALLEGHENY CITE SUMMER STRENGTH
But PPL, which also sells electricity in Pennsylvania, said it expects third-quarter earnings per share to exceed Wall Street's consensus of 88 cents a share. It went on to reaffirm its guidance of at least $4.00 per share for the year.
Allegheny Energy Inc., which markets power in Maryland, Pennsylvania, West Virginia and Ohio, experienced warmer weather in July and August that it did a year ago, spokesman Gregg Fries said, adding August was warmer than normal. For the year, he added, its guidance remains $3.80 to $4.10 per share.
Officials at Public Service Enterprise Group Inc., American Electric Power Co. Inc. and Cinergy Corp., which also produce and sell power in these markets, said their guidance is unchanged.
Southeast power house Duke reaffirmed its belief earnings per share would grow 10 to 15 percent from 2000's $2.10.
WEAKENING DEMAND IN CHICAGO
"While we instituted cost-containment efforts to address the economic weaknesses in the third quarter, the revenue impact of recent events cannot yet be quantified," Exelon Co-Chief Executive Corbin McNeill said.
Merrill Lynch analyst Steven Fleishman said Exelon "management is concerned about signs of weakening retail demand post the Sept. 11 tragedy, particularly in Chicago."
One of the first analysts to comment on Exelon's reduced expectations; he downgraded the stock and cut his earnings estimates for this year and next.
Exelon, formed last October when Philadelphia Electric Co.'s parent company acquired Chicago's Commonwealth Edison, said it now expects third-quarter earnings of $1.10 to $1.20 per share. It previously said the quarter would represent 30 percent to 40 percent of the company's $4.50 per share target, or $1.35 to $1.80.
Based on that outlook, Thomson Financial/First Call said, analysts expected third-quarter earnings per share ranging from $1.51 to $1.62, resulting in a consensus earnings estimate of $1.57, which the analysts compared to $1.41 one year ago.
Exelon said pro forma 2000 earnings, assuming the company was formed on January 1, 2000, were $1.27 per share.
Given reduced expectations for the third quarter and the recent economic uncertainty, Exelon said its full-year earnings guidance is being reduced to a range of $4.30 to $4.45 per share.
Analysts had used its previous guidance as a base, saying they expected earnings per share of $4.50 to $4.75, resulting in a mean of $4.58 compared to last year's $3.86.
THE DRAG OF LITIGATION, JOB CUTS
Exelon said its core operations continue to perform well, with its nuclear power plants, owned jointly with British Energy Plc (BGY.L) operating above target. Energy delivery operations, which distribute natural gas and electricity to some 5 million customers, have held spending below budget and merger-related savings are on target for $148 million in 2001.
But trading was hurt when wholesale power prices in the mid-Atlantic and upper Midwest states did not average the $34 a megawatt Exelon expected due to cooler weather and weak economies, First Union Securities analyst Thomas Hamlin said.
In addition to the negative market impacts, Exelon said, its generation unit recorded an increase in its litigation reserves of $14 million.
Earnings will be reduced further by severance costs of $30 million in the third quarter and $18 million in the fourth to eliminate another 450 positions on top of the 2,900 positions previously announced in conjunction with the merger.
The company said it anticipates a $36 million third quarter write-down of its Corvis Corp. holdings. The telecommunications equipment makers’ shares were received through venture capital fund investments.
ESTIMATES SLASHED
Exelon shares were also downgraded, to hold from buy, by ABN-AMRO's Paul Patterson. He reduced his estimates of 2001, 2002 and 2003 earnings per share to $4.40, $5.15 and $5.60, respectively, from $4.62, $5.45 and $5.95.
First Union's Hamlin trimmed his estimates to $4.30 this year and $5.15 next, from $4.60 and $5.45, respectively. And Merrill's Fleishman cut his to $4.35 and $5.00, respectively.
Exelon's stock dropped nearly 23 percent to a Thursday morning low of $38.99, its lowest price since early April 2000 when it was trading as PECO.
Closing down $5.95 at $44.50, it was still down 11.79 percent -- the loss among the 40 components of the S&P Utilities Index, which has dropped nearly 19 percent in the past month.
About half the Index did end the day with small gains, reflecting advances that followed the statement from PPL, which still ended the day with a $2.11 loss at $31.19, its lowest close since late August 2000.
Duke trimmed its loss to 28 cents from $2.17. And Entergy was among the gainers, adding 53 cents after slipping 92 cents Wednesday when the New Orleans-based utility said it would meet or beat analysts' estimates for the quarter, "excluding the impact of weather" -- which is a component of those estimates.
As seen on Raging Bull...
Allegheny Energy sees net at upper end of range
By Jim Brumm
NEW YORK, July 27 (Reuters) - Allegheny Energy Inc. now sees 2001 earnings per share at "the upper end" of its $3.80 to $4.10 target range, Chief Financial Officer Bruce Walenczyk said Friday.
Analysts reporting to Thomson Financial/First Call now expect the utility holding company to earn $3.65 to $4.00 per share this year with the consensus put at $3.85. The company earned $2.84 a share in 2000.
Speaking on a conference call discussing the Hagerstown, Maryland-based company's 70 percent jump in second-quarter earnings, Walenczyk pointed out the target, which was set early this year, included 10 cents a share for what was then expected to be a mid-year end to amortization of good will.
Although the company now expects the amortization of the good will associated with its March purchase of Merrill Lynch and Co. Inc's energy trading operation to continue all year, Walenczyk said Allegheny is not reducing its target to reflect this change.
Instead, earnings are expected at the upper end of the range, he stressed in response to analysts' questions.
But he declined to say how the company expects second have profits to be distributed between the third and fourth quarters.
NO QUARTERLY GUIDANCE
"We're not going to give quarterly guidance" for the rest of the year, Walenczyk said while agreeing "a little bit" of what the company had expected in the third quarter did add to the second quarter earnings growth.
Analysts now expect the company Allegheny to earn $1.30 to $1.43 in the third quarter and 85 cents to 92 cents in the fourth quarter, with the consensus at $.135 and 88 cents, respectively.
Late Thursday Allegheny reported second quarter earnings per share of $1.01 well above the analysts' range of 70 to 80 cents.
During the quarter, the CFO said, the company's total retail power sales were unchanged from 2000 despite cooler weather.
This reflected growth in the number of customers being served, he said. Residential power sales were unchanged while increased commercial sales offset lower industrial power sales in the latest quarter.
Walenczyk reiterated Allegheny's long-term growth target of over 10 percent per year but declined to provide any guidance for next year until after the company's budgeting process is completed late in the third quarter.
The 15 analysts reporting 2002 projections range from $4.00 to $4.48 with a consensus of $4.26.
Allegheny stock was trading five cents lower at $43.80 in afternoon trade on the New York Stock Exchange.
15:09 07-27-01
Posted to United Steelworkers site in June 2000.
Alcoa's new smelter technology could reshape industry
(UPDATE: Recasts, adds details, stock prices, byline. pvs. PITTSBURGH.)
By Jim Brumm
NEW YORK, June 22 (Reuters) - Alcoa Inc. (NYSE:AA), the world's largest aluminum producer, said on Thursday it is testing smelting technologies that could reduce the price of the light metal as much as one-third while making its production environmentally friendly.
Analysts said the technologies, which would require much less electricity to produce aluminum, could have a far-reaching impact on many industries. Much cheaper aluminum could reduce demand for steel and glass, with which it competes to make auto parts and beverage cans.
The smelting changes would also slow the growth in demand for electricity, according to a report by Credit Suisse First Boston analyst Thomas Van Leeuwen. Aluminum smelters using current technology are voracious electricity users.
"Aluminum intensive automobiles, aided by better fuel cell technology, would be closer to widespread adoption. Aluminum could also strengthen its position in beverage containers,'' he said.
Alcoa announced the development after Van Leeuwen published the report, abandoning its policy of not commenting on technology until trials are completed.
The company said it is testing inert anode and wettable cathode smelting techniques, adding it had been granted U.S. patents on these advanced smelting process technologies.
Assuming the technologies prove commercially feasible, the company statement said it believes it will be able to convert its existing potlines leading to ``significant'' operating cost and capital investment savings.
Alcoa said the inert anode technology is being evaluated in commercial cell trials at an undisclosed Alcoa plant, and the trials are producing encouraging results.
Testing is continuing and no timetable has been established for commercial use, the brief Alcoa statement concluded.
Spokeswoman Bonita Cersosimo said the company will be evaluating ongoing trials of the new cathodes by year end.
Van Leeuwen told Reuters the industry will ``start to see an impact (from these technologies) by the middle of this decade.''
Rival Alcan Aluminum Ltd. (NYSE:AL) believes this is optimistic, said its spokesman Marc Osborne.
Kaiser Aluminum Corp. (NYSE:KLU) spokesman Scott Lamb said this is ``no timetable for commercialization'' of the wettable cathodes technology Kaiser is working on with the U.S. Department of Energy.
Van Leeuwen estimated the two technologies together could reduce the cost of aluminum by 11 to 25 cents a pound. The cost of aluminum for North American customers is now about 75 cents a pound.
"We do not believe all of the cost reductions would be captured as increased profits,'' he wrote. ``Instead, we think the long-term price of aluminum would drop.''
Because the new cathodes would allow an increase of up to 40 percent in the capacity of smelters now in operation, Van Leeuwen said he expects this to defer the construction of new smelters for several years.
The inert anode technology, meanwhile, would reduce the cost of new smelters by about 25 percent, he said.
New plants cost between $4,000 and $4,500 per metric tonne of annual capacity, he noted in a telephone interview.
Alcan's new smelter, now being started up in Quebec, has a capacity of 375,000 tonnes per year.
"Further, with the deployment of inert anodes, aluminum smelting would generate oxygen, not greenhouse gases,'' Van Leeuwan's report points out.
Besides Alcoa, Alcan and Kaiser, companies producing aluminum in North America include Rio Tinto Plc's Comalco and privately owned Northwest Aluminum.
In trading Thursday, Alcoa and Alcan shares posted fractional gains, while Kaiser and Rio Tinto were fractionally lower. Other items from the last decade. December 2001
PPL says power marketing unit being probed
By Jim Brumm
NEW YORK, Dec 7 (Reuters) - Pennsylvania regulars are probing possible market manipulation by the affiliate of PPL Corp. that trades wholesale power, the company acknowledged late Thursday.
Shares of PPL, which owns a regulated electric utility that distributes power to 1.3 million customers in eastern and central Pennsylvania, fell on Friday in heavy trading, extending a decline that began Wednesday when Wall Street first linked the company to the investigation.
PPL said its EnergyPlus subsidiary was the "Entity 1" mentioned in a report by the PJM Market Monitor, an office that watches trading in the mid-Atlantic power market.
The Market Monitor report triggered a Pennsylvania Public Utility Commission (PUC) investigation into possible manipulation by EnergyPlus in the buying and selling of electricity in the wholesale power market announced last Friday.
After dropping to $32.85, its lowest price in six weeks, PPL's stock began to gain as analysts said "any financial impact from the (commission's) review will be negligible."
The stock closed Friday at $34.03, down 61 cents, or 1.76 percent, for the day; and down $2.36, or 6.45 percent, from Tuesday's close of $36.39, before some on Wall street linked PPL to the investigation. Monday, 2 August 1999 19:40:38
RTRS [nN0258604]
Dominion Resources sets LatAm sale to Duke Energy
NEW YORK, Aug 2 (Reuters) - Dominion Resources Inc. said Monday it has agreed to sell its Latin American power generation businesses to Duke Energy Corp. for $405 million in a transaction both companies expect will improve future earning
Richmond, Va.-based Dominion said it is exiting Latin America to direct future growth towards emerging competitive energy markets of the Midwest-Northeast region of the United States, a focus of its planned merger with Consolidated Natural Gas Co. Spokesman Hunter Applewhite declined to say whether the sale would result in a gain or a loss but did say it "will have a favorable impact on earnings going forward."
Charlotte-based Duke Energy said the purchase of 1,200 megawatts of generating capacity positions its international subsidiary to become Latin America's first truly regional power generation and energy trading and marketing company.
The Dominion portfolio of hydroelectric, natural gas and diesel powered generation businesses in Argentina, Belize, Bolivia and Peru "will provide tremendous synergies with our existing portfolio, along with the Brazilian and El Salvadoran companies we
With the agreement reached Sunday with Dominion, he told Reuters, Duke agreed to spend nearly $1.3 billion in Latin America in five days.
He said these purchases will be funded with debt.
"Duke Energy's shareholders will be rewarded with immediate improvements in earnings per share when we complete these transactions," Williamson said in the company's statement.
Dominion said this transaction is expected to be completed by year end.
((-- Jim Brumm, New York Equity News at 212 859-1710 or nyc.equities.newsroom@reuters.com))
Monday, March 15, 1999
Florida Power cuts rates, offers revenue-sharing to customer
Jim Brumm
New York: The 3.7-million customers of Florida's largest utility are being offered over $1 billion in rate cuts and a unique opportunity to share Florida Power & Light's revenues over the next three years under an agreement reached this week.
Florida Power and Light Co., the main subsidiary of FPL Group Inc. , expects the agreement to be approved by the state's Public Service Commission next Tuesday, FPL spokeswoman Stacey Shaw said on Friday in a telephone interview from the utility holding company's headquarters in Juno Beach, Fla., near West Palm Beach. The rate reductions of $350 million in each year of the agreement, if approved, would give virtually all classes of customers the lowest rates of all the major Florida utilities, the utility said in a statement.
The agreement reached with the state's Office of Public Counsel, the Public Service Commission's staff, and two groups of customers - the Florida Industrial Power Users Group and the Coalition for Equitable Rates - settles their concerns aboutthe utility's rates.
"Regulation in Florida works," said FPL Group's President Paul Evanson. "You don't need deregulation to lower rates. We've just proven that." The agreement, which would be effective 30 days after approval, features a special rebate to customers if annual revenues increase due to abnormally high electricity usage by customers, Florida Power & Light said.
FPL's Shaw, noting she is not aware of another utility with a revenue-sharing program, said it is more flexible than a profit-sharing program and eliminates debates over the impact of the company's capital structure on earnings.
The planned revenue sharing would let FPL keep a third of revenues earned in excess of $3.4 billion to $3.56 billion in the first 12 months, while that threshold would change to over $3.45 billion to $3.61 billion in the second 12 months, and over $3.5 billion to $3.66 billion in the third 12 months, Shaw said.
She said the utility's revenues were $3.76 billion last year - out of total FPL Group revenues of$6.66 billion.
Adjusting for last year's heavier-than-normal air conditioning load in South Florida, the utility's 1998 weather-normalized revenues were $3.68 billion, Shaw continued. Taking off the $350 million rate cut leaves the $3.33 billion base for 1999's rates, she added.
The utility said the agreement also would cut its return on equity (ROE) range to 10 per cent to 12 per cent from the current 11 per cent to 13 per cent.
Noting that non-fuel operations and maintenance expenses and financing costs are excluded from the ROE calculation, HSBC Securities analysts said FPL can benefit to the extent it can limit those costs over the settlement's three-year term.
Shaw said the agreement would result in an early end to the utility's special investment recovery program that allowed it to amortize about $400 million of its power-plant investments in 1998 and an average of nearly $250 million annually over the last four years.
The agreement replaces the program - which will end in mid-April instead ofat year-end - with a three year program that allows Florida Power & Light to amortize up to $100 million of these investments each year.
In late trading Friday, FPL Group's stock was up $2.0625 to $55.625 in trading on the New York Stock Exchange.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
New Jersey regulators set to rule on gas rate rise
NEW YORK - Three New Jersey utilities expected state regulators to rule late yesterday on their requests to raise natural gas rates nearly $400 million per year.
The state's fourth gas distribution utility, South Jersey Industries' South Jersey Gas Co., does not expect a ruling before the end of October as its fiscal year for rates begins Nov. 1.
The New Jersey Board of Public Utilities is scheduled to meet at 3 p.m. (1900 GMT) at its offices in Newark to consider natural gas rate requests from Public Service Enterprise Group's PSE&G utility subsidiary, NUI Corp.'s Elizabethtown Gas Co. and New Jersey Resources' New Jersey Natural Gas Co.
The meeting is also scheduled to consider a fund to provide interim funding for environmentally friendly electricity generation technologies such as solar and wind power and for energy conservation projects. The financing would come from special charges to be collected as part of gas and electric bills in New Jersey.
Pending before the board are PSE&G's request for a 24 percent increase, designed to increase revenues about $280 million over the next 12 months; Elizabethtown's request for a 30 percent increase, which would generate revenues of $80.9 million a year; and NJ Natural Gas' proposed 16 percent increase, which would add $19.5 million to annual revenues.
In response, the New Jersey Ratepayer Advocate has proposed that the increase be limited to 17 percent across the board.
In prepared testimony, the advocate's consultant, Richard LeLash, explained an increase of 14 cents per therm - $1.40 per million Btu - would result in an increase of about 17 percent in residential heating customers' gas bills.
This would reflect 70 percent of the difference between the gas cost reflected in current rates and the prevailing gas prices on the commodities market, he continued, adding this would minimise under recovery by the utilities "while avoiding an extreme increase that may prove unnecessary if gas prices moderate during the winter or spring."
Under New Jersey rate making process, under recovered costs are deferred for later recovery along with the interest costs involved in borrowing the funds until they can be recovered.
Spokespersons for the three utilities said company representatives have been meeting all day with representatives of the Ratepayer Advocate and board staff to reach an agreement for the regulators to consider.
Not involved in Yesterday's talks is South Jersey Gas, spokeswoman Joanne Brigandi said. The company originally requested an increase of 19 percent last summer, raising this to 30 percent before beginning separate talks with the board staff.
Currently, she added, an increase of 27 percent is under discussion which would increase annual revenues $91 million.
Story by Jim Brumm
Story Date: 11/10/2000 |
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