CSA Z462 Arc Flash Training - Electrical Safety Compliance

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NEW YORK - Forced to raise cash in the wake of Enron Corp.'s demise, the energy industry has begun to resemble a pawn shop, with ``For Sale!'' signs plastered on power plants across the nation.

But El Paso Corp., Williams Cos., AES Corp. and other energy companies hoping to sell at least $7.5 billion worth of assets have their work cut out for them: this is a buyer's market if ever there was one.

``It's obviously an adverse environment to be selling assets, given the market knows their condition and the pressure that's on them,'' said Jeffrey Gildersleeve, an analyst at Argus Research. ``That doesn't necessarily improve their negotiating abilities.''

Enron's bankruptcy in December sent the utility sector into a downward spiral, crushing stock prices and making it tougher for a number of power companies to tap the debt markets. To shore up their balance sheets, a host of companies are issuing more stock and cutting capital spending.

What's more, they've decided to part with power plants, natural gas pipelines and trading units, probably at discount prices.

If sellers think prices have fallen too low, ``you might see some of these sales not going through,'' said one investment banker.

The sales range from energy trader and pipeline operator Williams' plan to raise up to $750 million, to independent power producer NRG Energy Inc.'s bid to reap almost $2 billion in proceeds from the sale of international assets. El Paso, North America's biggest natural gas pipeline operator, is seeking to raise a total of $2.25 billion.

Global power generator AES added to the glut this week by saying it will try to raise as much as $1.5 billion from the sale of assets, including some merchant and trading operations in New York, California and the United Kingdom.

'A QUESTION OF PRICE' Now power companies such as Duke Energy Corp., which carry strong balance sheets and credit ratings, say they can scoop up power plants for far less than it would cost to build them.

In addition to Duke, bankers and analysts point to American Electric Power Co. Inc., Dominion Resources Inc., FPL Group Inc. and Southern Co. as the most likely companies to snap up power plants.

But they may choose to play the waiting game.

``How many willing buyers are there at today's levels? I don't know -- maybe they are all sitting on the sidelines and waiting to get bargain basement pricing on assets,'' said Chris Budzynski, an analyst with Legg Mason.

One of the first to announce asset sales was Mirant Corp., a power marketing company based in Atlanta that has been especially hard hit by the Enron fallout. The early move to raise $1.6 billion has paid off.

Already it has grabbed more than $1 billion from the sale of its German utility and another $300 million of sales is ``very well-advanced'' and will be completed in the next couple of months, according to Chief Financial Officer Ray Hill.

With the number of assets on the block, the cat and mouse game of when to pounce and at what price will soon likely generate a lot of sparks.

``There are a lot of big companies, domestic and possibly international, that are waiting to see how much pressure comes into the market and forces prices down further,'' Gildersleeve said.

Or as Mike Heim, an analyst at A.G. Edwards, put it ``There is always a buyer for everything. It's just a question of price.''

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