Coal, Executive Insight, Generation

Report forecasts electricity pricing effects of 13% increase in installed capacity throughout the Midwest in 2001

SACRAMENTO, Calif., Oct. 31, 2001 — A new energy industry report forecasts the effects on electricity pricing of the Midwest region’s 13 percent increase in installed capacity for 2001.

Henwood announces the release of “The Transformation of Midwest Power Markets: Implications for Strategy and Performance,” their latest assessment of power market fundamentals for the Midwest region of the Eastern Interconnect.

The report details the wholesale electric price forecasts and how they are formed in over 14 local Midwest power markets, with the corresponding fuel prices for gas, coal and oil. Additionally, it details the effects a wave of 33,000 MW of generation, either entering the market in 2001 or currently under construction, has on expected electric prices.

Other issues affecting the Midwest analyzed in the report include a projection of summer transmission congestion and the State Implementation Plans for NOx, including the corresponding impact on electric prices.

Henwood continues to analyze the RTO evolution across North America and provides its perspective on the implication of these RTO developments on the key market fundamentals, players and trends.

The race to build power generation to meet supply shortages is rapidly turning into a strategy by merchant power generators to gain market share by pushing older, less efficient units and many traditional utility players out of the dispatch order for the future. New, efficient power generation provides the means to realize this end. The implications for industry transformation and risks to corporate strategy are substantial in this race for market leadership.

For more information, visit www.henwoodenergy.com.