Credit

A superior credit rating and financial acumen apparently have done little to help revive Enron Corp.’s collapsed energy trading operations. UBS Warburg Energy debuted early this year after taking over the trading business. However, the Houston-based unit has failed to produce, and 10 months later, the corporation’s president admits the “business outlook is very challenging.”

Credit Suisse First Boston (CSFB) released a revised three-tiered rating methodology last week to “provide greater clarity for investors.” In the process, analyst Curt Launer apparently downgraded several major energy companies including American Electric Power (to Underperform from Hold), CMS Energy (to Underperform from Hold), Dynegy (to Neutral from Strong Buy), National Fuel (to Underperform from Hold), Questar (to Underperform from Hold), Atmos Energy (to Underperform from Hold) and WGL Holdings (to Underperform from Hold).

Credit Suisse First Boston (CSFB) has released a revised three-tiered rating methodology to “provide greater clarity for investors.” In the process, analyst Curt Launer apparently has downgraded several major energy companies including American Electric Power (to Underperform from Hold), CMS Energy (to Underperform from Hold), Dynegy (to Neutral from Strong Buy), National Fuel (to Underperform from Hold), Questar (to Underperform from Hold), Atmos Energy (to Underperform from Hold) and WGL Holdings (to Underperform from Hold).

Coming as some encouraging news in an energy industry in the midst of a financial and credit crisis, Dominion reported Thursday operating earnings for the second quarter of $272 million (97 cents per share), compared with $180 million (72 cents per share) for the same period in 2001, excluding a $25 million charge related to the divestiture of Saxon Capital, Inc.

Seeking to reassure investors and credit rating agencies, Mirant on Thursday said that its liquidity position is strong, standing at approximately $1.7 billion. The company noted that the figure includes proceeds from its recently completed $370 million convertible securities offering.

Looking to shore-up investor support and appease credit rating agencies, El Paso Corp. last week reiterated its restructuring commitment, along with its mission of focusing on its global liquefied natural gas (LNG) and petroleum business (see NGI, June 3).

Even in the current political maelstrom surrounding some of its past trading practices during California’s energy crisis of 2000-2001, the City of Los Angeles Department of Water and Power (LADWP), the nation’s largest municipal utility, is financially and operationally secure in mid-2002, looking to expand its natural gas buying and power generation portfolios, according to its General Manager David Wiggs.

Even in the midst of a credit/credibility crunch that has shrunk its stock price and slowed its aggressive development program, San Jose, CA-based Calpine Corp. is looking to expand its natural gas operations, including a lusting eye toward the coal-bed methane industry in the heartland of the U.S. During an interview with NGI Tuesday, Calpine’s chief gas executive said he expects prices to trend upward as new supplies get tighter.

NewPower Holdings Inc., in a filing last week with the Securities and Exchange Commission (SEC), indicated that its auditors will state in the company’s annual report that there is a substantial doubt about the company’s ability to continue as a going concern. The auditors’ concern about NewPower’s viability was included in a filing notifying the SEC that it wouldn’t be able to file its annual report on time.