Subject: ferc price cap order client conf . call @ 11 : 30 am edt today ! ! !
ferc price cap order client conference call
today , thursday , april 26 th at 11 : 30 am edt
host : ray niles
late last night the federal energy regulatory commission ( " ferc " ) acted to
impose " temporary " wholesale power price caps in the western united states .
* the cap affects the " real - time " market , which we estimate is only 5 %
of the total wholesale market ; it is set to expire in one year
from may 1
* this is a near - term negative for power producers and energy
merchants , a dramatic example of " headline risk " . the political risk of
re - regulation has stepped up , in our view , reducing the multiple investors
will pay for earnings
* in terms of earnings , ironically , the effect may be somewhat
positive , albeit small ( only 5 % of market is affected ) . caps are likely to
increase volatility , benefitting energy merchants , and sustain high power
prices for a longer period of time , benefitting power producers , by reducing
the incentive to build new plants .
call in replay
reservation
800 - 229 - 0281 us 800 - 642 - 1687 us 758540
706 - 645 - 9237 int ' l 706 - 645 - 9291 int ' l
replay until 4 / 30 , 11 : 59 pm
raymond c . niles
power / natural gas research
salomon smith barney
( 212 ) 816 - 2807
ray . niles @ ssmb . com
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