Southeastern U.S. Facing Electric Generation Overcapacity and Potential Asset Impairments Feb 04

Standard & Poors, February 2004

Abstract
Generation overcapacity in the southeastern U.S. has caused reserve margins in the region to increase. When coupled with a number of other obstacles, such as transmission limitations and lack of deregulation, merchant generation companies have been prevented from realizing the potential they once dreamed of. This article discusses the extent of the current "overbuild" situation in the region and examines how some marketers have reacted. The Southeastern Electric Reliability Council (SERC) is a regional organization that coordinates and manages the bulk power systems in the Southeast. The SERC region includes Alabama, Louisiana, Arkansas, Tennessee, Mississippi, Missouri, Georgia, Virginia, the Carolinas, and a portion of eastern Texas. Due to its large size, the SERC is divided into four sub-regions: Entergy, TVA,...

Companies mentioned in this report are:
- Carolina Power & Light Co. d/b/a Progress Energy Carolinas Inc.
- Duke Energy Corp.
- Cogentrix Energy Inc.
- Calpine Corp.
- LS Power Funding Corp.
- GenOn Energy Holdings Inc.
- Constellation Energy Group Inc.
- Cleco Corp.
- Allegheny Energy Supply Co. LLC
- Progress Energy Inc.

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Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.

- Carolina Power & Light Co. d/b/a Progress Energy Carolinas Inc.
- Duke Energy Corp.
- Cogentrix Energy Inc.
- Calpine Corp.
- LS Power Funding Corp.
- GenOn Energy Holdings Inc.
- Constellation Energy Group Inc.
- Cleco Corp.
- Allegheny Energy Supply Co. LLC
- Progress Energy Inc.

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