Survey Critical Infrastructure

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Subject: UFTO Note – Survey Critical Infrastructure
Date: Fri, 18 Apr 1997 08:53:19 -0700
From: Ed Beardsworth

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| ** UFTO ** Edward Beardsworth ** Consultant
| 951 Lincoln Ave. tel 415-328-5670
| Palo Alto CA 94301-3041 fax 415-328-5675
| http://www.ufto.com edbeards@ufto.com
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(Forwarding this news time-sensitive news item. This commission is separate from the DOE Reliability Task Force.)

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Survey- President’s Commission On Critical Infrastructure Protection

(Via Utility-News Inc.)- April 17, 1997- The President’s Commission on Critical Infrastructure Protection is requesting information regarding technologies and capabilities for protecting critical infrastructures vital to our nation’s economic and national security. Of particular concern are physical and cyber threats. Eight critical infrastructures have been identified: (1) telecommunications, (2) electrical power systems, (3) gas and oil storage and transportation, (4) banking and finance, (5) transportation, (6) water supply systems, (7) emergency services, and (8) continuity of government services. The Commission has retained the Department of Energy’s Argonne National Laboratory to act on its behalf in soliciting and collecting this information.

The Commission designed a survey template to facilitate this critical infrastructure data collection effort. The survey template can be requested via e-mail at formpccip@anl.gov, or downloaded from www.dis.anl.gov/survey. Responses must be received no later than May 30, 1997, to guarantee inclusion in the Commission’s report.

Taking time to provide information may increase organizational visibility, not only with the Commission, but also with government agencies and private-sector entities needing infrastructure protection technologies and capabilities. Responses will be entered into a database and made available to the government and private sector. The Commission will use the information to help (1) formulate critical infrastructure protection strategies, and (2) develop recommendations for research and development programs to address technology shortfalls.

For more information on this critical infrastructure protection technologies and capabilities data collection or the Commission, please contact Mr. Jerry Gillette at 630/252-7475 or jgillette@anl.gov.

QuickStabTM: Real-Time Prediction of Transmission System Loadability

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Subject: UFTO Note – QuickStabTM: Real-Time Prediction of Transmission System Loadability
Date: Fri, 04 Apr 1997
From: Ed Beardsworth
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| ** UFTO ** Edward Beardsworth ** Consultant
| 951 Lincoln Ave. tel 415-328-5670
| Palo Alto CA 94301-3041 fax 415-328-5675
| http://www.ufto.com edbeards@ufto.com
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(The developer of this program was referred to UFTO by a staff member at DOE. The following write up was prepared by him. Note the special offer for UFTO Members, in the last paragraph.)

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QuickStabTM : Real-Time Prediction of Transmission System Loadability

Today’s utility systems are likely to be dispatched near the limit of capacity and stability. In the context of open transmission access, network loadings will often get close to unstable states undetectable by conventional power-flow, optimal power-flow and contingency analysis programs. Such states will have to be predicted before they occur.

Without a real-time ability to determine how close the system is to a critical state, utilities will be less able to operate reliably and to compete effectively in the deregulated market. Also, the real-time assessment of the maximum loadability will have to be performed LOCALLY by EACH utility, in addition to, or rather than, being performed only at ISOs or large area coordination centers (power pools).

Critical states occur at, or within a certain margin from, the maximum power transfer capability, or maximum loadability of a power system. This limit is not constant. It depends on the generation, customer demand and transmission network conditions. In order to be meaningful and reliable, it must be computed from the real-time conditions of the transmission network.

A field-proven solution to this problem is available. A maximum loadability predictor has been developed and successfully tested and validated. It determines the transmission reliability margin corresponding to a given system state and evaluates the distance to the point of maximum loadability of the transmission network. In addition, it displays the results in a suggestive, easy-to-understand graphical format, and provides information that can help develop a quick remedial action strategy.

The program, known as QuickStabTM, offers significant benefits. It can help increase revenues from wheeling charges while meeting higher MW demand and reliability requirements. It is well suited for short- and mid-term operations planning scenarios. And it can be used on-line to supplement existing real-time computing facilities. Its modular design and portable code implementation make it possible to integrate the stability calculations with existing power-flow, optimum power-flow and security assessment applications.

As a special offer to UFTO members, QuickStabTM will be made available FREE for a 60 days trial period. Since users need to understand the methodology and be technically proficient at doing load flow and steady-state stability calculations, a training workshop will be provided at moderate cost to address the solution technique, definition of study cases, data preparation procedures, program installation, and interpretation of results.

For additional information, or to arrange for a private, exclusive QuickStab presentation at the upcoming PICA 97 conference, please contact:

Dr. Savu Savulescu
5104 Woodmere Drive, Suite #204
Centreville, VA 20120-4333
(703)818-8028 savu.scs@worldnet.att.net

Institutional Issues Facing Distributed Resources

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Subject: UFTO Note – Institutional Issues Facing Distributed Resources
Date: Wed, 02 Apr 1997
From: Ed Beardsworth

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| ** UFTO ** Edward Beardsworth ** Consultant
| 951 Lincoln Ave. tel 415-328-5670
| Palo Alto CA 94301-3041 fax 415-328-5675
| http://www.ufto.com edbeards@ufto.com
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Institutional Issues Facing Distributed Resources

“Legal, Regulatory, and Institutional Issues Facing Distributed Resources Development”

J.T.Nimmons, T.J.Starr, R. Orans, J.Swisher, and J.Singer, December 1996. 120 pages.

Work performed on behalf of NREL and four investor owned-utilities (C&SW, Cinergy, Florida Power Corp., and SDG&E), bertween August 1995 and march 1996, by a team of four consulting firms. It was the survey phase of a project known as the Distributed Resources Institutional Analysis Project, which UFTO member utilities first heard about in early 1995 (UFTO Report on NREL, and UFTO Meeting at NREL).

The report provides an overview of the legal and regulatory framework governing U.S. utilities, both Federal and State, and discusses how Distributed Resources may be affected, in the context of open access and restructuring. Order no. SR-460-21791

This is an NREL Technical Report, available in limited quantities from NREL’s Document Distribution Service at 303-275-4363, fax 303-275-4053, or evanss@tcplink.nrel.gov (You can also want ask to be put on the mailing list for the quarterly NREL EnergyPubs list>)

John Nimmons & Associates, Olympia WA can be reached at 360-786-6040, email jna@nwrain.com

Indoor Environmental/Aroma Conditioning

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Subject: UFTO Note — Indoor Environmental/Aroma Conditioning
Date: Mon, 31 Mar 1997
From: Ed Beardsworth
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| ** UFTO ** Edward Beardsworth ** Consultant
| 951 Lincoln Ave. tel 415-328-5670
| Palo Alto CA 94301-3041 fax 415-328-5675
| http://www.ufto.com edbeards@ufto.com
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Indoor Environmental/Aroma Conditioning

AromaSys, Inc, a small company in Minneapolis, uses a unique patented electrostatic device to accurately disperse liquid vapors and micro aerosols into conditioned spaces. The goal is complete environment conditioning that goes well beyond the usual control of temperature and humidity by HVAC systems.

By choice and design of the substances used, it becomes possible to accomplish several objectives, singly or in combination:

1. Pleasant aromas can influence occupants’ experience, performance and behavior
2. Problem odors can be counteracted (not masked).
3. Disinfectants and fungicides can protect against indoor air contamination agents.

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The company, poised for significant growth, is reviewing which strategies, business structures and allies would be appropriate for various markets and fields of use. An energy service company pursuing one or more target markets where this technology fits might see this capability as a valuable product line extension.
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The Business and Technology
Virtually all other methods of liquid vaporization are inefficient and have shortcomings that result in a lack of control of the release of the desired environmental conditioning agent. They are severely limited in their ability to use a full range of scents (especially the naturally occuring ones known as “essential oils”), because different aromatic constituents have very different rates of evaporation, or volatility. This is a fundamental issue in the design of all scented or scent-related products.

AromaSys’s technology overcomes this obstacle, permitting precise control of the rate of vaporization of all components simultaneously. Interestingly, the technique is modelled on the way nature does it, dispersing scents electrostatically (via geological, meteorological and biological processes). It thus becomes possible, in effect, to bring indoors a close replica of an outdoor aromatic experience, like a pine forest or a meadow of flowers. It’s “high-fidelity” for the nose. Note that accurate control is vital–the nose is sensitive to a few parts per billion, and too much scent can be worse than too little.

The company sold the first systems in 1992, nearly all of which are still in use. Customers in the present installed base of over 900 sites are enthusiastic and loyal. Applications range from health care, to major hotels and casinos, to high end retail furniture and clothing stores, to office buildings and even an embassy.

The technology uses no heat, pressurized air or ultrasonics. A high DC voltage is applied to a semi-conductive capillary/filament assembly which is saturated with the scent-bearing oils. The electrostatic charge forces the release of charged aerosol or vapor droplets, which are self dispersing.

For smaller spaces, e.g. 1-2000 sq ft, a self contained unit puts the vapor directly into the surrounding area. For larger applications, e.g. a hotel lobby, or even a coliseum in one instance, the vapor is introduced in the HVAC ductwork. There is no maintenance, except for the occasional resupply of scent.

AromaSys works closely with leading scent suppliers, and has combined its technology with a sophisticated understanding of aroma and the complex interplay of pyschology, physiology and technology. The firm has developed techniques to choose and design scents appropriate for each site.

For example, the Mirage in Las Vegas wanted the lobby to gently suggest a day of lounging in the sun at the pool, so there is a very faint scent of cocoa-butter. Casino owners are convinced that profits are helped, though this is obviously difficult to quantify. A high end furniture store has a scent that makes customers want to linger and relax. Office workers appear to be more productive. Scents can be controlled and changed over the course of the day (e.g. to change the mood, or adapt to usage schedules).

The sense of smell is the most primitive of the five senses, connecting directly to instinctual parts of the brain, influencing mood, behavior and physiology. This may sound “new-age”, but the practical reality — and benefits — are clearly demonstrable.

Generally, it can be said that aroma is simply one more design element, like lighting, acoustics, wall coverings and furniture, that make an important difference in how people experience and respond to their environment. And, as noted above, there are also direct implications for indoor air quality from a health perspective.

The technology also lends itself to a variety of other applications. In agriculture, for example, there are potential uses for outdoor odor control (e.g.hog farms), fumigation of agricultural products, and dispersion of pesticides, pheromes, attractants and repellents.

For more information,contact:

Mark E. Peltier, President
AromaSys, Inc., Minneapolis MN
tel 612-924-0730 fax 612-924-9133

Brownfields–Assets or Liabilities?

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Subject: UFTO Note – Brownfields–Assets or Liabilities?
Date: Tue, 25 Mar 1997
From: Ed Beardsworth

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| ** UFTO ** Edward Beardsworth ** Consultant
| 951 Lincoln Ave. tel 415-328-5670
| Palo Alto CA 94301-3041 fax 415-328-5675
| http://www.ufto.com edbeards@ufto.com
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Brownfields — Environmentally Impaired Properties –Liabilities or Assets?

With recent changes in the legal and regulatory treatment, properties that may be contaminated with industrial waste can hold significant bottom-line opportunities for forward thinking corporations.

Many companies must create reserves for environmental liabilities, and must disclose them to shareholders. These liabilities depress shareholder value, distract management from its profit-making mission, and represent uncertainty in the company’s value which can impact merger or acquisition negotiations.

However, if well managed, these liabilities can be the source of significant gains. Long-held reserves can be liquidated, if liabilities are properly transferred to others. Thus, long-forgotten assets can be turned into profitable ventures.

Many utilities have properties such as former manufactured gas sites, transformer yards, and fuel storage facilities. In the old scheme of things (regulated monopoly, rate of return), it may have been OK to hold them in limbo, at worst paying for required remediation efforts (ultimately recovered in rates). Now, however, with industry restructuring and competition, utilities have strong incentives to manage these holdings more aggressively, and prepare themselves and their balance sheets for what lies ahead.

“The Brownfield Movement”

The US EPA and many state and local regulators have realized that many contaminated properties have potential for industrial, commercial, multi-family and single-family development. Unfortunately, these properties lie fallow and undeveloped because corporations are concerned about cleanup liability and the never-ending costs associated with the identification of waste from their industrial processes. Some are eyesore vacant industrial plants. Others are fenced and abandoned. Still others, although they may raise suspicions, have yet to be identified as potential problems but are put on back burners by their owners who fear the sites may be branded “hazardous waste dumps.”

But there is good news. Recognizing the enormous impact these vacant industrial sites have on local communities and the fact that many old industrial sites are in what are now high potential value locations, regulatory agencies have taken affirmative steps to give owners and developers incentives to derive economic value from these sites. For example, the US EPA has a Brownfields grant program which provides communities $200,000 for development programs. Also, the Administration is now examining tax incentives, and federal, state, and local regulators have begun to provide significant regulatory protection and relief.

Further, agencies are more likely to find health-risk-based decision-making acceptable, liberating many properties to constructive future uses. Where once a regulator might have required a “dig and haul” solution, instead a cap and immobilize approach (with much lower cost) may now be not only acceptable but recommended.

Along with the changes in governmental philosophy and policy, sophisticated transactional players have emerged to help owners of (possibly) impaired properties shift and reduce large portions of their environmental risk (see list below). They do this by coupling the new regulatory initiatives with combinations of liability-shifting indemnities, customized insurance programs, and use-appropriate environmental solutions. Most traditional environmental consulting firms don’t yet have the sophisticated real estate focus and transactional experience that’s required to maximize returns and limit future liability.

In this new approach, the keys are to look first at the highest and best potential uses of a property consistent with local zoning and land use plans (What would the land be good for, if it wasn’t contaminated?). Then, lower cost analyses based on future-use and health-risk enable owners to make thoughtful decisions whether to retain properties, implement remedies, or sell, which shifts the risks, benefits and liabilities to other parties.

With an extensive portfolio of such properties, an overall plan of attack should be undertaken, rather than a piece-meal one-at-a-time approach. In particular, high and lower value properties can be bundled for disposition, increasing returns to the seller..

With the advancing deregulation of their industry, utility companies should carefully examine their environmental liabilities to identify good business opportunities and ways to reduce corporate exposures. (Utilities also have a stake in the new energy customers that will appear on all former Brownfield sites.) With the changes in the legal/regulatory framework, and starting with a sophisticated analysis of the real estate portfolio, a forward thinking company is likely to enjoy a significant return.

Some of the key new Brownfield developers:
– Landbank, Lakewood CO and Walnut Creek CA
– Recovery Capital Company , Reston VA
– Remediation Financial, Inc., Phoenix AZ
– Cherokee Investment Security

Other information sources:
– EPA’s Brownfield Home Page — http://www.epa.gov/swerosps/bf
– McCutchen Environmental Group — http://www.mdbe.com/env
– “Eliminating Environmental Liabilities by Transferring Ownership of Contaminated Properties”, J. Simon, Remediation, Winter 1996, J. Wiley & Sons, pp. 123-128

For more information, feel free to contact:

Edward A. Firestone, Environmental Consultant & Attorney
Palo Alto CA, 415-327-6686

(Mr. Firestone provided much of the information in this article, and is a personal friend and colleague of mine. Ed B)

Industrial Ecology Simulation Exercise

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Subject: UFTO Note – Industrial Ecology Simulation Exercise
Date: Mon, 24 Mar 1997
From: Ed Beardsworth

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| ** UFTO ** Edward Beardsworth ** Consultant
| 951 Lincoln Ave. tel 415-328-5670
| Palo Alto CA 94301-3041 fax 415-328-5675
| http://www.ufto.com edbeards@ufto.com
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Industrial Ecology Simulation Exercise

UFTO has received an invitation (see below) to an event on May 20-22, in which senior executive strategic planners and thinkers will participate in a simulation exercise in Industrial Ecology (IE). IE is a new and emerging field which views industrial activities and the environment as an interacting whole, rather than as competing forces. The focus will be long range and strategic, rather than on near term details or specifics.

The program is part of a series of “Prosperity Games” intiated under the auspices of the National Research Council, in its effort to define “Research Priorities for the 21st Century.” The National Forum on Science and Technology Goals sees linkage to societal environmental goals as key.

Ref: Environmental Science & Technology/News, Vol 31, no. 1, 1997, pp
20-21, 26
Also see: http://www.nap.edu/readingroom

For information about Prosperity Games, see:
http://132.175.34.193/Prosperity_Games/Prosperity_Games_Main.asp

The organizers, which include representatives from Sandia, Livermore and Los Alamos, would welcome having someone from the utility industry attend, since “resource providers” (includes energy) is a category of player they’ve already identified.

If someone from your company is interested, contact Dr. Marshall Berman at Sandia, as indicated in the attached letter, at 505-843-4229; e-mail: mberman@sandia.gov

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March 24, 1997

We invite you to participate in an Industrial Ecology Prosperity Game at the Hyatt Dulles Hotel in Herndon, Virginia, beginning at 4:00 PM on May 20 (includes dinner), and ending at 5:00 PM on May 22, 1997.

This event is a high-level executive simulation in which you will join with your peers from industry, government and academia to explore how IE might be used to help our nation meet its economic and environmental goals. In this simulation, you will explore the current real world and create exciting alternative futures.

Industrial Ecology is an emerging field recently identified as one of six “Research Priorities for the 21st Century” by the National Research Council. Thus, this game is especially timely. IE views industrial activities and the environment as an interactive whole, and potentially offers a way to meet both economic and environmental goals, rather than pitting one against the other. This Prosperity Game will explore the IE concept, the potential benefits of applying IE, roles for various organizations in making IE a reality, and collaborations needed to realize the benefits of IE.

Prosperity Games are an outgrowth of move/countermove and seminar war games. They are executive-level interactive simulations that explore complex issues in a variety of economic, political, and social arenas. The simulations are high-level exercises of discretion, judgment, planning, and negotiating skills; they are not computer games. The specific objectives of this game are to:
– Develop an understanding of what Industrial Ecology is.
– Develop an understanding of how Industrial Ecology can help meet the needs of the stakeholders and the nation.
– Explore the role of government in an integrated Industrial Ecology effort.
– Identify and initiate follow-on activities to promote findings and policies generated in the game.

Lawrence Livermore, Los Alamos, and Sandia National Laboratories are sponsoring this Prosperity Game to explore the roles of industry, government, universities, and laboratories in this exciting new field. Players have been invited from all stakeholder groups, including the labs, universities, industry, Congress, local governments, foreign governments, DOE, other federal agencies, the US public, and finance. Three scenarios will be used to provide context and focus for the players to explore the actions required to create the desired future; they will address the global and national environment, as well as a local focus on the Rio Grande border region.

To date, fifteen Prosperity Games have explored issues in electronics manufacturing, environmental technology, global economic competitiveness, university business school education, diversity and cultural change, biomedical technologies, entrepreneurship, and the future of the national labs.

In addition to the specific objectives of the sponsors, players benefit directly from the general objectives of all Prosperity Games:

– Develop partnerships, teamwork, and a spirit of cooperation among industry, government, laboratory and university stakeholders.
– Increase awareness of the needs, desires and motivations of the different stakeholders.
– Bring conflict into the open and manage it productively.
– Explore long-term strategies and policies.
– Provide input for possible future legislation.
– Stimulate thinking.
– Provide a major learning experience.

Please join us in exploring the opportunities presented by this simulation and in sharing its present and future benefits with your peers.

For additional information about the game, please contact Dr. Marshall Berman (505-843-4229; e-mail: mberman@sandia.gov), or Dr. Kathleen Schulz (505-845-9879; e-mail: kmschul@sandia.gov). Information about meeting arrangements is available from Gladys Shaw at 505-843-4227; e-mail:glshaw@sandia.gov. Please fax the enclosed form to 505-843-4228 by April 10, 1997 to confirm your attendance at the game.

Pyroelectric Effect – New Thermal to Electric Energy Converter

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Subject: UFTO Note – Pyroelectric Effect – New Thermal to Electric Energy Converter
Date: Fri, 21 Mar 1997
From: Ed Beardsworth

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| ** UFTO ** Edward Beardsworth ** Consultant
| 951 Lincoln Ave. tel 415-328-5670
| Palo Alto CA 94301-3041 fax 415-328-5675
| http://www.ufto.com edbeards@ufto.com
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Pyroelectric Effect – New Thermal to Electric Energy Converter

Thermodyne, a small company in Salt Lake City, has what it believes to be a new type of Thermal to Electric Converter which is based on a combined piezoelectric pyroelectric effect. The device promises to have high energy density, operate at lower temperatures and with smaller temperature differences, and be far more efficient and cost effective than any existing thermoelectric device.

History: In 1990, a British group announced a new type of converter consisting of hundreds of layers of thin piezoelectric polymers coated with bi-metal electrodes. They hypothesized that the device was working on some kind of transverse thermoelectric effect, however the device degraded after a few hours of operation, and no convincing explanation of the phenomena was forthcoming.

Some time later the Thermodyne group, aware of the British work, came up with a different explanation for what had been observed, and quickly developed a better choice of materials and geometry to go with their theory.

Piezoelectric ceramics emit electrical impulses when compressed. Similarly, when an electric field is applied to a piezoelectric material, it changes volume. This reversible action is used today in loudspeakers and sonar devices. Hundreds of materials exhibit the piezoelectric effect.

The Pyroelectric effect is a lesser known thermal cousin of the Piezoelectric effect. When a sample is heated or cooled, it emits electrical impulses, and its temperature changes when a field is applied. About one third of piezoelectric materials are also pyroelectric.

A pyroelectric converter was proposed in 1980, but the effort failed because of poor performance due in part to the use of mechanical cycling of pyroelectric plates from hot to cold region.

The Thermodyne approach allows a converter to be built without moving parts that can be used for cooling/heating (heat pump) or to make electricity, with a theoretical efficiency of 50% of the ideal Carnot efficiency. A sandwich of ceramic plates resonate electronically to cause a pumping action from heat to mechanical to electrical energy via the combined action of the piezo and pyro effects.

With power densities of hundreds of watts per square centimeter, it should enable a wide variety of practical products such as coolers, air conditioners and refrigerators, and waste heat utilization. Thermodyne has received notice from the U.S. patent office that its initial patent has been allowed and international rights are being pursued. The company is seeking a modest amount of seed development funding (equity or non-equity) to build a first milestone of a one watt, 5% efficient demonstration device within the next 5-6 months by a 10 watt, 10% prototype 6 months later. Sufficient interest already expressed by some major companies suggests that the program could become self-funding thereafter.

Contact: Fred Jaeger, President
Thermodyne, Inc.
Salt Lake City, UT
801-583-2000, fax 801-583-6245, jaeger@eneco-usa.com

Conf. on Buying and Selling Generation Assets

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Subject: UFTO NOTE — Conf. on Buying and Selling Generation Assets
Date: Tue, 18 Mar 1997
From: Ed Beardsworth

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| ** UFTO ** Edward Beardsworth ** Consultant
| 951 Lincoln Ave. tel 415-328-5670
| Palo Alto CA 94301-3041 fax 415-328-5675
| http://www.ufto.com edbeards@ufto.com
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This is a follow up to a note I sent you several weeks ago. The conference location has been changed from NYC to San Francisco (I’m told there wasn’t a hotel available in NY!)

NOTE Special arrangement–UFTO Members Discount.
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TO: Clients and Colleagues of Ed Beardsworth
FROM: Jim Naphas, Conference Manager, Infocast, Inc.
DATE: March 18, 1997

RE: Special 25% discount invitation FOR UFTO MEMEBERS
to attend an upcoming Infocast conference
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BUYING AND SELLING UTILITY GENERATION ASSETS

San Francisco Marriott, San Francisco, California, April 14-15, 1997

The era of deregulation brings with it much uncertainty, and one of the leading questions is the status of generation. A wave of generating asset transfers on an unprecedented scale is expected in the near future as a result of industry restructuring. This shuffling is creating a potentially monumental opportunity for today’s power industry players to buy, sell, or spin-off generation assets to improve competitiveness, or to enter this highly competitive market.

Infocast has assembled a group of experts from across the nation to address future market conditions, estimation of the value of generation assets in the new competitive era, the ever-changing regulatory waters, and financing of these deals. Enclosed is a descriptive brochure on this informative program for your review.

By special arrangement, Infocast is extending this special invitation allowing UFTO Member company personnel to register for this program at a 25% discount off the regular tuition. (Please note: if you are a government employee you qualify for the government discount of 40% only.) To receive the reduced tuition, just mention this email offer to the registrar when enrolling.

If you have any questions about the conferences, please feel free to contact Jim at (818) 902-5400.

We look forward to seeing you this spring!
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Buying and Selling UTILITY GENERATION ASSETS
An Up-to-the-Minute Review of Today’s Hottest Issues in Generation Portfolio Management with Practical Discussion Based on Today’s Transactions

The Future of Generation Portfolios in a Deregulated Market

Determining the Value of Your Company’s

Understanding Critical Accounting and Financing Issues

Regulatory Issues in Asset Transfer

State-of-the-Art Marketing Strategies for Generating Assets

Sponsored by INFOCAST
Official Publication: COMPETITIVE UTILITY

APRIL 14-15, 1997
SAN FRANCISCO
SAN FRANCISCO MARRIOTT

As a result of the ongoing restructuring of the U.S. power industry, we are seeing the beginning of a wave of generating asset transfers. It seems clear that this trend will continue on an unprecedented scale. This titanic shuffling of assets is creating a critical opportunity for today’s power industry players to buy/sell/spin-off generation assets in order to meet their goals-whether those goals are growth, rationalization of a generating portfolio to improve competitiveness, or even to seize the opportunity to enter or exit this highly competitive market. As large as the opportunities are, however, this will not be an easy game to play. Players must deal with great uncertainty about future market conditions, estimate the value of generation assets under those market conditions, navigate uncharted regulatory waters, arrange financing and/or obtain the approval of their debt and equity investors while negotiating the best possible deals. Only those who are aware of the latest approaches and industry thinking on these subjects will be able to emerge from the process with their winnings in hand.
Infocast has brought together a group of experts from Wall Street to Washington to provide a briefing on the critical issues in generating asset management. Case studies will serve as a practical example providing helpful do’s and don’ts when negotiating your own deal. Register today and learn how to seize the opportunity to improve your company’s generation portfolio.

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Agenda
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Monday April 14, 1997

Welcome and Introduction from Conference Chairman
Jeffrey C. Bodington, President, Bodington & Co.

Generation Portfolios and the New Environment
FERC POLICIES ON MARKET POWER AND ASSET SALES
Why divestiture makes sense in some cases
– Reduced regional market power, both vertical and horizontal
– Handling stranded costs
– Making assets more efficient, inside or outside the electric industry
– Why purchases make sense in other cases
– More efficient operation means lower prices, higher profits
– The value of national generating companies
– Consolidating niche markets and functions
– FERC market power policies and their impact on asset transfers
Charles Whitmore, Senior Economist,
Assistant Director of Economic Policy, Federal Energy Regulatory Commission

STATE RESTRUCTURING INITIATIVES-HERE’S WHAT WE WANT THE INDUSTRY TO LOOK LIKE
Regulator’s policy objectives
Linkage between federal and state authority
Decisions regulators must make
Practical issues affecting schedules for divestiture
Forecast of what will happen and when
P. Gregory Conlon, President, California Public Utilities Commission

NAVIGATING THE REGULATORY PROCESS FOR APPROVING ASSET SALES
Understanding the regulatory framework
Understanding the commercial process
Understanding stockholder interests
Reconciling regulatory, commercial and stakeholder interests
Finding a regulatory strategy that works
Joseph M. Malkin, Partner, O’Melveny & Myers LLP; outside counsel to Pacific Gas & Electric

NRC POLICIES ON TRANSFERS OF NUCLEAR ASSETS
NRC policies and regulations on asset transfers prior to the emergence of restructuring
NRC policy questions raised by restructuring
Integrating NRC policy on restructuring with policies of other agencies (FERC, SEC, State Commissions) ~ Impact on asset transfers of current NRC initiatives
George A. Avery, Partner, Shaw, Pittman, Potts & Trowbridge

STRANDED COST RECOVERY AND ITS IMPACT ON GENERATION PORTFOLIO DECISIONS
Dimensions of stranded costs: size, timing and rate of payment
Generation divestiture and stranded cost recovery
Asset sales as a method for estimating stranded costs
Risks and risk allocation measures
– for vertically integrated utilities
– between Gencos and regulated companies
– between regulated companies and customers
Theresa Flaim, Ph.D., Vice President, Corporate Strategic Planning, Niagara Mohawk Power Corp.

PORTFOLIO AND CORPORATE STRATEGIES FORTHE NEW ERA
The best of times, the worst of times-opportunities and threats in the restructured wholesale and retail power markets
New wine in old skins-reconfiguring existing portfolios to take advantage of new strategies
Historic relics-dealing with assets and arrangements “inherited” from the regulated monopoly era
To hedge or not to hedge-role of risk management strategies in meeting new challenges of operating a “genco” in an unbundled marketplace
Calpine’s rationale for pursuing a merchant power strategy
Rod Boucher, President, Calpine Power Services Co.

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Group Luncheon & Address

“FUTURE DIRECTION OF RESTRUCTURED POWER MARKETS IN CALIFORNIA AND NEW ENGLAND AND THE IMPACT ON GENERATION ASSET VALUES”
Edward J. Walsh, Group President, Power & Government Americas & India, Stone & Webster

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Valuation of Generation Portfolios

CHANGING FUEL PRICE CONSIDERATION IN POWER PLANT VALUATION
Critical new fuel issues
Evaluating fuel issues for merchant plants ‘ Predicting future fuel markets ‘ Understanding the future link between fuel and power markets ~ Fuel management for a competitive market
Jeffrey P. Price, President, Resource Dynamics Corp.

TRENDS IN WHOLESALE ENERGY AND CAPACITY PRICES
Forecasts of demand
Existing and future sources of supply
Fuel price uncertainties
Balancing supply and demand
Charles Mann, Director, Fieldstone Co.

PRICE PREMIUMS FOR “STRATEGICALLY LOCATED” PLANTS
Valuing plants within transmission constrained areas
Getting paid for providing system support and ancillary services
Understanding reliability contracts with the independent system operator
Assessing competitors’ barriers to entry
Glen Davis, Vice President, AES Transpower

OPERATING COSTS AND COMPETENCIES-WHO SHOULD BE IN THE GENERATION BUSINESS
The goal…to promote the most efficient operations
Defining the efficiency/competency curve for operators
Looking at the variability among operators
Meeting the need to have the most efficient operators
Craig A. Mataczynski, Vice President, US Business Development, NRG Energy, Inc.

SALES, LEASES, SPIN-OFFS AND OTHER OPTIONS: WHAT’S RIGHT FOR YOU?
Describing each option’s structure
‘ Summarizing each options key benefits and costs
The roles of regulators
What has been done to date and why?
New structures to consider
Alan Levande, Vice President, Goldman Sachs & Company

PANEL DISCUSSION: MAKING DECISIONS IN THE FACE OF UNCERTAINTY
Glen Davis, AES Transpower
Alan Levande, Goldman Sachs & Company
Charles Mann, Fieldstone Co.
Craig A. Mataczynski, NRG Energy, Inc.
Jeffrey P. Price, Resource Dynamics Corp.
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Cocktail Reception: There will be a cocktail reception at the conclusion of day one giving you an opportunity to meet speakers and your fellow attendees.

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Tuesday April 15. 1997
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Welcome and Introduction from Conference Chair
Jeffrey C. Bodington, President, Bodington & Co.
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Financing Issues
IDENTIFYING KEY CREDIT ISSUES
Bond indentures
Rating the pieces of a once-integrated utility
Merchant plant risks
Peter N. Rigby, Director, Project Finance Ratings, Standard & Poor’s

EVALUATING MARKET RISK IN FINANCING ASSET PURCHASES
Market “price” risk: impact of supply and demand
Market “access” risk: market infrastructure and business risk in being able to dispose of power output
Increased use of commodity and financial hedging instruments
Effectiveness of risk allocation and mitigation strategies
How much risk will the financial markets be willing to accept: profile of an acceptable financing package for generating assets
Lewis J. Hart, Jr., Managing Director, CIBC Wood Gundy Securities Corp.

Requirements for Transferring Assets
UNDERSTANDING CORPORATE GOVERNANCE ISSUES
Examining the auction process in terms of legal due diligence, regulatory and contract issues
Fraudulent conveyance issues
Using indenture provisions to maximize the available consideration
Balancing the interests of the various parties involved
J. Michael Parish, Senior Partner, Reid & Priest, LLP

BOND INDENTURE ISSUES
The spirit vs. the letter of indenture
Refinancing and defeasance strategies – Stranded costs securitization issues
Inter-company transfers and property release funding options
David P. Falck, Partner, Winthrop, Stimson, Putnam & Roberts

ACCOUNTING MATTERS TO CONSIDER IN CONNECTION WITH UTILITY GENERATING PLANT SALES
Types of sales structures
Financial reporting and the accounting issues involved
Regulatory matters and its impact on accounting
David Etheridge, Partner, Arthur Andersen

DEALING WITH ENVIRONMENTAL LIABILITIES
How can different project acquisition structures affect environmental liabilities?
Types and methods of due diligence necessary to identify environmental liabilities
Anticipating changes that affect project permitting and raise compliance costs
Andrew A. Gracie, Esq., Partner, Chadbourne & Parke

BUYING AND SELLING INDIVIDUAL GENERATING UTILITY ASSETS
Utility plants that have already sold and their valuation
Key factors determining value
Timing for new sales
Regulatory issues
Assessing closing risk
Jeffrey C. Bodington, President, Bodington & Co.

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Marketing Generation Assets
HOW TO MARKET ASSETS; HOW TO GET THE HIGHEST PRICE BIDDING STRATEGIES FOR ASSET ACQUISITION
The positioning of assets
Approaching the market-auction v. negotiation
Calculating fair value in a deregulated market
Identifying a qualified buyer
Categorizing types of buyers-financial v. strategic, public v. private
Jeff Miller, Partner, The Beacon Group

CASE STUDIES
ARRANGING THE SALE OF GENERATION ASSETS OUT OF THE BANKRUPT CAJUN ELECTRIC COOPERATIVE
Obtaining bid protections to lessen the risks for the lead bidder
Maintaining flexibility to ensure the leading bid remains viable
Strategies used by the non-lead bidders to come from behind and successfully acquire assets
Ronald L. Rencher, Partner, LeBouef, Lamb, Greene & MacRae

PREPARING TO SELL AN OWNERSHIP INTEREST IN NUCLEAR POWER: SALUDA RIVER’S REP PROCESS Market assessment and market interest in nuclear power
Strategy for marketing of nuclear power
Data requirements for assessment of nuclear power acquisition
Financial considerations and economic analysis
Anis D. Sherali, P.E., Vice President Power Supply, Economic, Regulatory and Financial Planning, Southern Engineering Co.
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FOUR WAYS TO REGISTER:
Telephone: (818) 902-5400
Fax form to: (818) 902-5401
Mail form to: Infocast, Inc.
13715 Burbank Blvd.
Sherman Oaks, CA 91401

E-mail form to: infocast@westworld.com
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REGISTRATION INFORMATION
Tuition: $995.00 The full tuition is payable in advance and includes program instruction, continental breakfasts, luncheon and reception, complete conference documentation and refreshments. * 40% Discount for U.S. Federal, State and Local Government Employees: $597.00
Program Schedule: Registration will take place from 7:00 a.m. to 8:00 a.m. on Monday, April 14. The conference will take place from 8:00 a.m. to 5:00 p.m., followed by a cocktail reception from 5:00 p.m. to 6:30 p.m. The conference will resume on Tuesday, April 15 at 8:00 a.m. and adjourn at 3:15 p.m.
Accommodations: Infocast has secured a limited number of rooms at the San Francisco Marriott, which will be held at a special rate of $177.00 until March 14,1997. To receive the special rate, call the hotel directly at (415) 442-6755 and mention that you are an Infocast registrant. The hotel is located at 55 Fourth Street, San Francisco, CA 94103.
Air Transportation: For discounted airline fares, please call Uniglobe Executive Travel at (800) 676-3932 and mention your participation in the Infocast conference.
Cancellation, Refund & Credit: If your written cancellation is received prior to March 31, 1997, a full refund will be made. Written cancellations received on or after March 31,1997, will create a credit of the tuition good toward any other Infocast conference or publication. In the event that a program is canceled, Infocast does not assume responsibility for any expense other than the tuition fee.
MCLE Credits: Infocast certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 13 hours.

Registration Form:
Enclosed is a check payable to “Infocast” to register the following individual in:

Buying and Selling Utility Generation Assets
San Francisco Marriott – San Francisco, CA
April 14-15, 1997 (415) 442-6755

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City __________________________ State ____ Zip __________

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