Das wir teuer

verfasst von XERXES, 13.11.2002, 14:17

-->Und wer ist grösster Anbieter von Kraftwerkstechnik in den USA? GE!
Und wer ist grösster Anbieter von Leasingverträgen in den USA? GE-Capital!

A Shock to the System
Electricity Firms Return to Their Roots


By Peter Behr
Washington Post Staff Writer
Tuesday, November 12, 2002; Page E01
Just a few years ago, E. Linn Draper Jr. was leading the charge toward the heady new world of electricity deregulation.
Draper's sprawling energy conglomerate, American Electric Power Co. in Columbus, Ohio, had merged with a big Texas energy company in 2000, becoming one of the nation's biggest U.S. utility owners. It bought power plants as far away as Australia and plunged into electricity trades with Enron Corp. and other power dealers.
Last month, the humbled company chairman was in retreat. At an investors conference in Palm Springs, Calif., Draper offered a different vision for the once highflying AEP. The company's stock has lost half its value this year. It is shutting down its money-losing trading operation, and on Oct. 9 it fired five of its energy traders for falsifying natural gas prices used to set price indexes for the entire industry.
AEP -- like the rest of the nation's battered power industry -- has been forced back to its boring past, to a time when it delivered both electricity and slow, steady growth and predictable returns to its risk-averse investors.
"I hope we have demonstrated that we have stable and traditional earnings and can support the dividend," Draper told the Edison Electric Institute conference in Palm Springs.
Gone is the hype about wresting big profits from deregulated power markets, and debt-financed expansion. The new priorities, as they once were, are cash and dividends.
So goes the turnabout for America's electric companies.
"A lot of people in our industry did things that were ill-advised," said Thomas E. Capps, chief executive of Dominion Resources, Virginia's largest power provider."A lot of people coming out of a regulated background went into a lot of places they shouldn't have."
The reckoning in the deregulated power markets has had many ill effects, both financial and structural.
About $140 billion in energy investors' holdings has been wiped out, according to Edward Metz, a securities analyst with SNL Financial in Charlottesville.
An unprecedented surge of power-plant construction spawned by optimistic deregulation strategies has left the industry with far too much generation capacity, particularly in the face of a weak economy and stagnant energy growth, analysts agree.
And as much as $50 billion in short-term construction loans that financed the building boom will come due over the next three years, according to the Standard & Poor's bond-rating group. Analysts say it is this debt that will shake out the industry's at-risk companies in the coming years, perhaps creating further upheaval as bankruptcy or forced sales wrack the industry.
"We are in the first year or so of what will be a multi-year bust cycle in the power industry," said Lawrence J. Makovich, senior director of Cambridge Energy Research Associates."They built too much at too high a cost, and they did it mostly with debt. We are overbuilt in the vast majority of the regional power market, and in the next six months there is a better-than-even chance we'll have a couple of major bankruptcies."
As painful as the industry's fall has been, consumers have not suffered. Retail prices are still controlled in most of the country, even in states -- including Maryland and Virginia -- that are phasing in deregulation plans. With plenty of surplus generating capacity around, there should be little fear of a sharp spike in electricity (although a harsh winter could send heating bills higher).
Although all power companies have suffered from the industry's downturn, some are hurting much worse.
"There is a real divergence of companies," said Peter N. Rigby, a director of S&P's credit-rating group. The firms that took the more cautious approach to deregulation now are in the strongest position."They stuck to their knitting," Rigby said.
Those that took the biggest risks, spending lavishly on new gas-fired generating plants and launching energy-trading operations, are fighting to survive.
According to S&P, 48 percent of the nation's power companies have a stable credit outlook."We don't expect things to get worse" for this group, Rigby said. A year ago, 60 percent of the companies were in that category.
Since July, S&P has downgraded credit ratings on 57 power companies, compared with nine downgrades in the same period a year ago.
Currently, 31 percent of the industry has a negative outlook, according to S&P, meaning that credit conditions could worsen. And 15 percent of power companies are on"credit watch" for possible downgrades of their credit rating. (The remainder of the companies are on credit watch for a possible credit upgrade.) In states that adopted deregulation plans, many traditional power utilities chose -- or were required -- to sell their generating plants. The plants were bought by other utilities' deregulated subsidiaries or by a new breed of"merchant" generators, and in many cases the buyers overpaid, said Dominion CEO Capps.
Investment-banking firms sold utility executives on the notion that deregulated power operations could produce returns of 20 percent or more on equity, instead of the traditional returns of 10 to 14 percent. The advice, while alluring, was delivered by the very investment bankers who stood to gain from growth in energy trading, according to Makovich of Cambridge Energy Research Associates."The people who funded this are the ones to blame," Metz said.
Capps gives thanks every day that he and Dominion didn't make the risky gambles on deregulated power markets here and abroad that many of Dominion's competitors pursued. Dominion bought generation, too, but only when it was certain of selling the output in advance, Capps said."I don't mean to be cocky," he said."We were lucky, too."
Power trading was supposed to be a big new profit source for Enron and its imitators, which built costly trading desks staffed with MBA finance whizzes and mathematics gurus who expected to profit from an ever-expanding flow of power deals and the market-driven changes in electricity prices.
But this year's trading scandals and a flurry of federal and state investigations have sent investors fleeing from companies with big trading operations. As their stock prices plunged this summer, they faced growing demands from trading partners to pledge more cash as collateral on long-term energy deals -- cash the companies didn't have. The result: more losses and a sudden, costly exit from trading operations.
Allegheny Energy Inc. in Hagerstown, Md., is in this squeeze. It didn't have the funds to meet collateral demands on its trading operations and defaulted on some contracts. That put the company in technical default on major bank loans and now the company is in do-or-die negotiations with its lenders to refinance $1.3 billion in secured debt and $700 million in working capital.
Making matters worse is a new change in the accounting rules.
Led by Enron, most of the industry adopted"fair value" or"mark-to-market" accounting rules, which permitted them to use current energy prices to record the value of long-term energy supply contracts as current income. That worked handsomely for the traders when energy prices spiked in 2000, but not since power prices fell in the summer of 2001.
Now the accounting industry has decided to bar the practice for energy supply contracts. Companies can record income only when power is delivered. The change will further weaken the financial position of some companies that traded heavily, creating a greater risk of loan defaults, according to Fitch Inc., a bond-rating service.
A comparison of the stock market performance of utility companies this year shows the separation between the stronger and most troubled companies.
Until last month, Wall Street investors treated nearly all power companies like the plague. Stock prices of the Dow Jones utilities group are down an average of nearly 40 percent from their peak in May. But a dividing line between stronger and most imperiled companies has become more pronounced since the second week of October.
Four companies have recovered much of this year's stock market losses -- Southern Co. in Atlanta, Consolidated Edison in New York, FirstEnergy Corp. based in Akron, Ohio, and Exelon Corp. in Chicago. All are long-established energy companies that have kept large transmission networks, low-cost generating plants or both. As power distributors to multi-state franchises of households and businesses, they are assured of a steady stream of customers' cash -- enough to comfortably manage dividend payments.
The Washington area's biggest power supplier, Potomac Electric Power Co., sold its generating plants in preparation for electricity deregulation in the capital region, and its business also rests on a large distribution franchise. The parent company's stock is more than 15 percent below its 2002 peak.
Constellation Energy, which owns generating plants and the Baltimore Gas & Electric Co. distribution network, has climbed back to within 25 percent of its 2002 high mark.
In the middle of group are AEP and Duke Energy in Charlotte -- diversified power companies with solid franchises that also dove into the power-trading business. AEP and Duke's shares are still down by more than 40 percent from 2002 peak levels.
At the bottom of the Dow utility index are two companies, TXU Corp. in Dallas and AES Corp. in Arlington, hit hard because their investments in foreign power operations have gone bad. They are down more than 75 percent from 2002 stock price peaks. Just yesterday, Standard & Poor's warned that if AES is unsuccessful at refinancing $2.1 billion in debt by Dec. 15 it could be forced into a bankruptcy reorganization.
A third group of companies -- Southern's spinoff Mirant Corp. in Atlanta; Reliant Resources Inc. in Houston, and Williams Cos. in Tulsa -- took the biggest gambles on deregulation, buying power plants and launching costly trading operations. With their revenue withered and big debts coming due, the companies are struggling to survive.
It is the outlook for 2005 and beyond that worries some analysts.
"There is very little [new construction] going into the pipeline," said Ken Rose, senior economist with the National Regulatory Research Institute in Columbus."The problem comes a few years down the line." If plant construction continues to lag but the economy picks up, the demand for power could swell faster than the power industry can respond, he warned."That could be a serious problem."

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• Das wir teuer - XERXES, 13.11.2002, 14:17