Message-ID: <23396992.1075860998722.JavaMail.evans@thyme>
Date: Thu, 7 Feb 2002 13:38:30 -0800 (PST)
From: energyviews@ze.com
To: rring@enron.com
Subject: Energy Views: Cut Backs in 2002
Mime-Version: 1.0
Content-Type: text/plain; charset=us-ascii
Content-Transfer-Encoding: 7bit
X-From: ZE PowerGroup Inc. <energyviews@ze.com>
X-To: rring@enron.com
X-cc: 
X-bcc: 
X-Folder: \Richard_Ring_Mar2002\Ring, Richard\EESI_Deleted_Documents
X-Origin: Ring-R
X-FileName: rring (Non-Privileged).pst


                       ZE Power Group Inc.
.................................................................

                          ENERGY VIEWS

-----------------------------------------------------------------
           Changing Perspectives on the Energy Industry
-----------------------------------------------------------------

           CUT BACKS IN 2002: BUSINESS RISK MANAGEMENT
                  OR JUST PLAIN BUSINESS RISK?

:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

THE BIG BANG IN 2001

2001 was a year like no other. The magnitude of events and 
economic repercussions, have been difficult to manage for many. 
We, as industry participants, have witnessed tremendous 
uncertainty and price volatility, which resulted in stratospheric 
price increases and the collapse of energy markets. As markets 
died (actually returned to historical lows) and as industry 
participants filed for bankruptcy, we are left with the question 
"What next?".

INDUSTRY IN FLUX

The industry is in a state of flux once again and floundering 
badly. The California experiment and the Enron model proved to be 
economic disasters that may never be rivaled. After the fallout, 
who is left to blame? Do we scapegoat it to the California 
regulators, to those eager to make a buck or to an overriding 
failure of all us to recognize the complexity and unique nature 
of the energy industry.

CUTBACKS AND LAY-OFFS

The worrisome reaction of many industry participants (coast to 
coast), at this time, has been to dramatically cut capital 
spending and reduce staff. This may seem a safe option given the 
relative calm of energy prices, in our opinion this strategy may 
be suspect in the long-term. The forthcoming changes from 
regulators, and from within the industry itself, will be massive 
and will require significant resources to implement.

Will you be ready for the onslaught? Business protocol must 
change and that change will be all encompassing. US Federal 
Reserve Chairman, Alan Greenspan, expressed confidence that there 
would be significant changes to accounting practices and 
corporate governance (of the energy industry) as a result of the 
Enron/Anderson scandal.

THE CERTAINTY OF CONTINUED UNCERTAINTY

If we have learned anything in the last six years, since the 
opening of the Alberta Power Pool on January 1 1996, it is that 
the market is violently uncertain. There is no indication that 
the industry will stabilize any time soon. The other not so 
obvious observation is that those corporations operating in 
competitive markets with solid infrastructure, effective trade 
and risk policy and the ability to intelligently analyze large 
amounts of data have come into 2002 in relatively good shape. The 
industry as it is currently situated suggests a need for some 
level of conservatism without compromising corporate integrity. 
Perhaps now is not the time to cutback, but rather to shore-up 
while there is a break in the storm.

HOW ARE YOU POSITIONED

What corporations should be asking is how actions I am taking 
today will impact tomorrow's business opportunities. We know many 
are cutting back on expenditures, but is this at the cost of risk 
exposure or lost opportunity. There is limited risk as long as 
prices are low; but we all know that the industry has thus far 
behaved outside of anybody's expectations. There is no reason why 
uncertainty will not continue to prevail.

ZE POWERGROUP CAN HELP

We have spent the better part of the last six years working 
diligently to equip our clients with nimbleness in and protection 
from volatile energy markets. As such, we moved from providing 
high-level strategic support for our clients to developing the 
software tools required for dynamic trade. We invite you to visit 
our web site to explore whether there is potential for ZE 
PowerGroup to help equip your organization.

Areas of focus that are critical in the short term include:
* Strategic plans
* Development of corporate infrastructure
* Implementation of strict but adherable policy, practices and 
  procedures
* Data management and analytics
* Software to support dynamic trade and risk
* Credit risk management

CONTACT

For more information visit http://www.ze.com or call
Paul Seo at 604-244-1672 or by email mailto:paul@ze.com

-----------------------------------------------------------------
                    About ZE Energy Views
-----------------------------------------------------------------
In our continuous efforts to serve the industry, we have 
developed "Energy Views" as a platform to communicate with the 
industry on a regular basis to relate issues and views we believe 
have industry wide relevance. We hope you find benefit from 
reading the emails. Feedback is welcome.

-----------------------------------------------------------------
                       ZEPG Products
-----------------------------------------------------------------

ZE Market Analyzer & Data Management Suite

Http://www.ze.com/pdf_documents/MA_Jan29-2002.PDF
Http://www.ze.com/pdf_documents/DM_Jan29-2002.PDF
.................................................................
Fully customizable automated data importers and a sophisticated 
web based market analysis tool used to view, extract and analyze 
industry data.

ZE Forward Price Views

Http://www.ze.com/pdf_documents/FPC_Jan29-2002.PDF
.................................................................
Mid and long-term Energy Forward Price Views that support 
decision processes by providing access to rigorously developed 
probabilistic price views and the market expertise embedded in 
them.

ZE Credit Risk Manager

Http://www.ze.com/pdf_documents/CRM_Jan29-2002.PDF
.................................................................
Determines corporate specific counter-party credit limits as well 
as clients' own credit (transactional) limits, through analysis 
of a series of industry specific parameters.

ZE Trade Manager

Http://www.ze.com/pdf_documents/TM_Jan29-2002.PDF
.................................................................
Designed to capture and manage all aspects of electricity and gas
transactions. Including: spot, term, transmission, index, fuel 
and cash-out deals involving the purchase and exercise of options
via a trader friendly interface.


-----------------------------------------------------------------
                   About ZE PowerGroup Inc.
-----------------------------------------------------------------
ZE PowerGroup is a strategic consulting firm incorporated to 
serve the emerging needs of an energy industry in transition.
ZE PowerGroup offers a full spectrum of services, from strategic 
planning and implementation through to technical analysis and 
energy trade and transaction software development.

:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

You received this newsletter because your email address is on our 
mailing list. We hope you find our mailings useful and 
insightful. However, if you'd like your name taken off the 
mailing list, you can do so by clicking 
mailto:unsubscribe@ze.com?subject=UNSUBSCRIBE (This will open 
your default mail application with the subject line already 
filled in) Then just press send.