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************************************************************************ Editor's Note: Dear IssueAlert Subscriber, Now you can get SCIENTECH's exciting, new electric industry e-zine, SourceB= ook Weekly. We are pleased to bring you six to seven articles per week written by our industry experts. Anyone can push news. We analyze it for you. We bring you the latest=20 technological as well as international and regulatory developments in the electric indust= ry. Then we tell you how these developments will affect you today and in the months to come. Visit http://www.consultrci.com/web/rciweb.nsf/Web+Pages/SBEntrance.html and download a free sample of SourceBook Weekly. All registrants who subscribe to SourceBook Weekly before December 31 will receive a $70 discount off the list price of $495. Sincerely, Bob Bellemare Vice-President Utility Services ************************************************************************ =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D SCIENTECH IssueAlert, December 4, 2000 AES Expands Into South American Hotbed Columbia By: Susan Kellogg, Issues Analyst =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D AES Corporation announced further international expansion through its=20 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 sever= al 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=20 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 principle= s." 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 successfu= lly penetrate the dictatorial climate of Colombia and spark a change as they do what they do best =01* 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 approximat= ely 49% of the outstanding shares. Dennis W. Bakke commended the Comision Nacio= nal 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 neighbor= ing states as well." Bakke is irrepressibly enthusiastic about the AES mission, although admitti= ng 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 philanthropi= c 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 ************************************************************************ SourceBook Weekly December 4, 2000 Issue:=20 http://www.consultrci.com/web/rciweb.nsf/Web+Pages/SBEntrance.html ************************************************************************ 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 dramat= ic turns with major players announcing to withdraw from membership. http://www.consultrci.com/web/rciweb.nsf/Web+Pages/SBEntrance.html ************************************************************************ 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 ************************************************************************ 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 ************************************************************************ 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 capabilit= y. 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 ************************************************************************ 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 issue= s 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 ************************************************************************ 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 ************************************************************************ SCIENTECH is pleased to provide you with your free, daily IssueAlert. Let us know if we can help you with in-depth analyses or any other SCIENTECH information products. If you would like to refer a colleague to receive our free, daily IssueAlerts, please reply to this email and include their full name and email address or register directly at: http://www.consultrci.com/web/infostore.nsf/Products/IssueAlert Sincerely, Will McNamara Director, Electric Industry Analysis wmcnamara@scientech.com =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D Feedback regarding SCIENTECH's IssueAlert and SourceBook Weekly should be sent to wmcnamara@scientech.com =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D SCIENTECH's IssueAlerts are compiled based on independent analysis by=20 SCIENTECH consultants. The opinions expressed in SCIENTECH's IssueAlerts are not intended to predict financial performance of companies discussed or to be the basis for investment decisions of any kind. SCIENTECH's sole purpos= e in publishing its IssueAlerts is to offer an independent perspective regard= ing the key events occurring in the energy industry, based on its long-standing reputation as an expert on energy and telecommunications issues. Copyright 2000. SCIENTECH, Inc. If you do not wish to receive any further IssueAlerts from SCIENTECH, pleas= e reply to this message and type "delete" in the subject line.
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