SUSIE GHARIB: High-powered meetings on both coasts today dealing with California's power crisis and the financial future of two huge utilities: Edison International (EIX) and PG&E. In San Francisco, California's Public Utilities Commission opened emergency hearings. Since the industry deregulated, wholesale power prices have skyrocketed. Now, the utilities want to raise rates between 26 and 30 percent. There are more hearings tomorrow, but state regulators are not expected to announce their decision on the rate request until their next formal meeting on January 4. In Washington today, California's governor met with President Clinton, briefing him on the power problems. Governor Gray Davis places the blame for the crisis on power generators outside the state.

GOV. GRAY DAVIS (D) CALIFORNIA: I have said to the generators, you ought to take the long view. If all you do is extract every dime you can get from California, you may win the battle, but you will lose the war, because either the legislature or through the initiative process, they will eliminate your right to deregulate electricity in our states.

GHARIB: And late today, the Energy Department extended through January 5, the emergency order forcing those generators to sell excess power to California.

Nightly Business Report transcripts are available on-line post broadcast.  The program is transcribed by FDCH. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc., Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.



12/27/00: Does The Bush Administration Have The Juice To Deal With The Energy Crisis?

SUSIE GHARIB: On January 20, President-Elect Bush will be dealing with the energy challenges, not only in California, but all around the country. We have two reports tonight, beginning with Darren Gersh in Washington.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: A funny thing happened to the new economy: it forgot to tell the old economy to make more power, which presents a major challenge for the Bush administration.

WILLIAM SIMMONS, BUSH ENERGY ADVISOR: We haven't run out of energy; we've run out of capacity to grow energy. So the problems we are now seeing in California are just the tip of the iceberg of what we're going to have to live with for the next few years.

GERSH: Through much of the '90s when oil and natural gas prices were low, energy companies put off investments in new equipment. As a result, the nation needs new drilling rigs, new gas pipelines, new refineries, new power plants. Advisers to the president-elect say the country must make a choice: grow the economy more slowly...

SIMMONS: Or, we basically come to grips with the fact that we are out of energy capacity, and we go on an unbelievably expensive rebuilding of our energy complex, so we get America out of the gridlock that we've backed ourselves into.

GERSH: To ease that gridlock, President-Elect Bush proposes opening more federal land to oil and gas exploration. Mr. Bush promises to streamline energy licensing and regulatory requirements. He also wants to spend $2 billion to research clean coal technology. But environmentalists say there is a gaping hole in the Bush plan.

NATHANAEL GREENE, ENERGY POLICY ANALYST, NRDC: The Bush proposal really doesn't focus on energy efficiency and renewables in a way that we think is essential.

GERSH: In the meantime, analysts worry political pressure is growing in California and elsewhere to roll back energy deregulation.

JAMES PLACKE, ANALYST, CAMBRIDGE ENERGY RESEARCH ASSN.: It is easier to identify the things to avoid. I would avoid re-regulation. Regulation is generally discouraging to investment.

GERSH: The best advice many have to offer the next Energy secretary, is to duck. The job is thought to be a sure way to end a promising career, and the Bush administration is believed to be having trouble filling the post. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.

Nightly Business Report transcripts are available on-line post broadcast.  The program is transcribed by FDCH. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc., Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

12/27/00: The Natural Gas Price Gasp

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: In the past few months, John B. Sanfilippo & Son, maker of Fisher brand nuts, says it's natural gas bills have been about 80 percent higher than normal. The company uses natural gas to power its nut roasters and to make glass jars for many of its products.

MICHAEL VALENTINE, SR. VICE PRES., JOHN B. SANFILIPPO & SON: We have notified some of our customers, especially those customers that buy their nuts in glass containers, that we will have to pass some of these increases along.

EASTABROOK: Spiraling natural gas prices are eroding profits for many manufacturers. Natural gas is used to produce everything, from steel, to plastic, to most chemicals. Utilities even use it as a fuel to generate power. In a recent letter to Federal Reserve Chairman Alan Greenspan, the National Association of Manufacturers said higher energy prices are a growing threat to its members. A viscous cold snap that has gripped most of the nation and tight supplies of natural gas are the reasons prices are at nose-bleed levels. They have risen from just under $3 per thousand cubic feet last winter, to around $10 in recent days. Energy analysts don't expect prices to ease significantly, anytime soon.

PHILIP FLYNN, ENERGY ANALYST, ALARON TRADING: We used to have an off-season for natural gas. We don't have that anymore. And if we get another strong blast of arctic cold, the demand is going to stay strong, supplies are going to stay stressed, and prices are poised to move higher.

EASTABROOK: Although natural gas prices are troubling many manufacturers, some economists call them, a "temporary" threat to the overall economy, and predict an easing in the months ahead.

DIANE SWONK, CHIEF ECONOMIST, BANK ONE: It's just extraordinary belt tightening, very hard bumps through the winter; but if you can make it through the winter, you're going to be just fine.

EASTABROOK: While economists and manufacturers are confident a spring thaw will bring down natural gas prices, analysts warn with supplies being as tight as they are, a heat wave next summer could send natural gas prices soaring once more. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Elk Grove Village, Illinois.

Nightly Business Report transcripts are available on-line post broadcast.  The program is transcribed by FDCH. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc., Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.



12/27/00: One On One With PG&E CEO, Robert Glynn

SUSIE GHARIB: PG&E (PCG) is one of the two big California utilities on the critical list. Joining me live from San Francisco now is the Chairman and CEO of PG&E, Robert Glynn Mr.Glynn, nice to see you again.

ROBERT GLYNN, PRESIDENT & CEO, PG&E: Nice to see you, Susie.

GHARIB: At those hearings in San Francisco today, your company said that Pacific Gas and Electric has only enough money to last for another three to seven weeks. Are you saying then after that time it's going to file for bankruptcy?

GLYNN: Well, after that time, if costs continue as they are and if we don't get any new sources of revenue like we're hoping to get approved on January 4th, then we would be in very serious financial difficulty.

GHARIB: What does that mean for PG&E the parent company? Does that mean that your company could also go bankrupt?

GLYNN: Well, PG&E Corporation, the parent company, the largest part of the corporate family by far is Pacific Gas and Electric Company. So serious problems in Pacific Gas and Electric Company translate to serious problems in the corporation.

GHARIB: Let's talk a little bit about this rate increase that you're requesting from state regulators. You're asking, from my understanding, a 26 percent increase in customer rates.

GLYNN: Yes.

GHARIB: Let's say that state regulators on January 4th don't go for that, maybe just 10 percent. Can you last on a 10 percent rate increase?

GLYNN: Well, the equation includes this. The wholesale prices are much, much higher than they've been in the past and either those prices get passed through to consumers in higher rates or someone has to finance the shortfall. Our company is out of the ability to finance the shortfall. So the state could do some securitization with their credit or they could give us sufficient assurance of recovering all these costs in the future, but there's no free lunch in this. Someone would have to finance a lower increase.

GHARIB: So you're saying 10 percent, you can't function on your own with a 10 percent rate increase?

GLYNN: That's right. There's got to be some additional financing entity present for that to work.

GHARIB: Mr. Glynn, have you talked to the state about any kind of bailout or, as you say, any kind of them assuming some of the credit liabilities that you have?

GLYNN: Well, when you think about going forward, there are lots of ways that state entities as well as the utility companies could develop the financing capability to do that and I think one possibility that the state is considering is whether or not they would want to be a part of that.

GHARIB: And so how realistic is that, for the state to come through with some kind of rescue plan?

GLYNN: I think the state's alternatives are to grant sufficient increases to the utilities' prices to enable the utilities to finance these high wholesale generator charges or to step in themselves and do it.

GHARIB: I understand, Mr. Glynn, that PG&E is going to file suit tomorrow against the Federal Energy Regulatory Commission, FERC. What are you hoping to achieve from that?

GLYNN: Well, there was a suit filed yesterday by our sister utility that was asking the Federal Energy -- was asking the federal district court to ask the Federal Energy Regulatory Commission to be much more aggressive in dealing with the unconscionably high prices that generators are charging to Californians. The Federal Energy Regulatory Commission has an obligation to find that only just and reasonable rates are charged. They have found that the generators are charging unjust and unreasonable rates and therefore they need to take the next step, which is to do something about it. And the suit that was filed by our sister utility yesterday was aimed at seeing that happening.

GHARIB: When do you think this whole thing is going to get resolved?

GLYNN: Well, it certainly needs to get resolved very soon. With companies that only have three or five or six weeks' worth of cash available to them and new financing close to them right now, new revenue increases, that means energy prices to consumers, need to go up now.

GHARIB: If you go bankrupt, if it gets to that point, what happens to meeting the electricity needs of the public?

GLYNN: Well, it would really be a disaster because what consumers would be faced with and what the California economy would be faced with is the high wholesale prices would still exist and they would have to deal with all of the fallout of the bankruptcy of two giant companies, which means that suppliers and tenants and landlords and retirees would find themselves at the short end of the stick in the proceeding for bankruptcy.

GHARIB: Well, it's obviously a very serious situation as you've portrayed it. Thank you very much for coming and talking to NIGHTLY BUSINESS REPORT this evening.

GLYNN: Thank you, Susie.

GHARIB: We've been talking to Robert Glynn, Chairman and CEO Of PG&E, live from San Francisco.

Nightly Business Report transcripts are available on-line post broadcast.  The program is transcribed by FDCH. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc., Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

12/27/00: The 2001 Stocks Outlook

SUSIE GHARIB: Not a bad for today. So what's the outlook for stocks in the new year? Joining me now with some thoughts is our colleague from BridgeNews, David Kozo. David, nice to see you.

DAVID KOZO, EQUITIES CORRESPONDENT, BRIDGENEWS: Same here.

GHARIB: So, what is the outlook? As you talk to stock market strategists what are they telling you about the Dow, the NASDAQ, the S&P?

KOZO: Well, the Dow and the S&P are, they're probably looking for about 10 percent growth in each, which would basically put us back to where we started the year. The S&P is now down 10 percent. The Dow, actually, with today's gain is only down six percent for the year. So a 10 percent gain would put it over its, over where it ended in 1999 and also over its record high.

GHARIB: And the NASDAQ?

KOZO: The NASDAQ, we would probably be looking at around 20 percent gain get back. So it's basically getting back about half of what it lost.

GHARIB: Let's talk some of the issues that investors are concerned about and you're hearing the same things about, the Federal Reserve possibly cutting interest rates. I'm hearing maybe three times in year 2001. What impact might that have? What are you hearing on that?

KOZO: Well, the first cut will definitely come in January, probably 25 basis points, and then again in March. So we know that. And I think that investors are going to start to price that into the stocks as we head into late January. People are going to be expecting this, at least the 25 point basis point move. So if they don't get that, they may even sell out then or, you know, or if they don't get a 50 point move. So, yeah, they're definitely looking at that at least 50 or 75 points.

GHARIB: As a positive factor. Now we've to get through these earnings.

KOZO: Right.

GHARIB: Looking at various sectors, which sectors seem to be the most attractive in '01?

KOZO: Well, probably the financials eventually will be. Once we get this interest rate situation cleared up and once the rates are lower, the financials will look good. Certainly the areas of technology, the technology infrastructure picks. A lot of the big money managers still love these stocks.

GHARIB: But technology as a whole, quickly?

KOZO: Technology as a whole generally positive but certain areas of weakness.

GHARIB: We've got to watch for all of that. We'll have you on during the year to come back and talk more on all of this.

KOZO: OK. Great, I'd like that.

GHARIB: For tonight, thank you so much.

KOZO: Thanks, Susie.

GHARIB: And we've been speaking with David Kozo of BridgeNews.

Nightly Business Report transcripts are available on-line post broadcast.  The program is transcribed by FDCH. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc., Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

12/27/00: Money File: On Giving It's the season of giving -- and there's still time not only to give, but to take a tax deduction. Plus, there's a growing new way to leverage your giving. It's called "donor-advised" funds. And since I introduced you to the Fidelity Charitable Gift Fund in a commentary seven years ago, many more financial services companies have introduced them. In fact, if you'll check our website at www.nbr.com, you can get a listing of all the public donor-advised funds. They all work on the same concept: You, the donor, open a minimum $10,000 account in one of these funds, and get an immediate tax deduction for your contribution of either cash or appreciated securities, up to certain IRS limits. But the contribution does not have to be distributed to charities immediately. Instead it can grow, tax-free in one of several investment pool choices -- typically growth, growth and income, income-only, or a money market fund. Then, in the future and at the donor's discretion, money -- typically with a $250 or $500 minimum amount -- can be sent to any registered 50lC-3 public charity of the donor's choice. Now, about that leverage. On the deduction side -- if you donate appreciated securities -- certainly there still are some -- you'll avoid paying capital gains, and get a deduction for the full market value -- up to 30 percent of your adjusted gross income. And on the giving side, all the future growth of your contribution is tax free, so you could distribute even more than you originally contributed, helping your chosen charities even more. That's my idea of a gift that keeps growing -- and giving. I'm Terry Savage

Donor-Advised Funds

Fidelity Charitable Gift Fund http://www100.charitablegift.org/

Vanguard Charitable Endowment Program http://www.vanguardcharitable.org/VCEPApp/vcep/home.jsp

Schwab Fund for Charitable Giving http://www.schwabcharitable.org/

T. Rowe Price Program for Charitable Giving http://www.programforgiving.org/

Eaton Vance's U.S. Charitable Gift Trust http://www.charitablegifttrust.org/

Oppenheimer's Legacy Program http://www.opplegacy.com/

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by FDCH. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc., Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South <

12/27/2000: Paul Kangas' Wall Street Wrap Up

Well, like natural gas prices, stocks were rising in price today as well. The blue chips once again the place to be. The Dow Jones Industrial Average picking up the lion's share of those gains. At the opening bell, the Dow moved a bit lower before buyers emerged for a broad group of stocks, like some retailers like Wal*Mart (WMT), defensive plays like Procter & Gamble (PG), Home Depot (HD) and Disney (DIS) all posting good gains. That was in spite of a weaker bond market. And decliners had a narrow edge at the early going there over advancers on the big board by a 5-3 margin. By noontime, the Dow was about 80 points higher; the NASDAQ also showing more strength as the day wore on, even though some of the usual suspects, like Intel (INTC) and Cisco (CSCO) were flat to fractionally lower. There was some talk of short-covering going on, as well as traders positioning themselves for the new year ahead. In the last hour of trading, more buyers emerged for the blue chips, and the Dow went on to close with a gain of 110.72 points at 10,803. And the NASDAQ Composite rising 45.83 points to 2539.

Volume perking up above the billion-share mark, with up volume swelling to 753 million shares alone.

Here's a look at the Transports, gaining 60 points today.

Utilities though, slipping a half a point.

The Closing Tick strongly bullish with the 915-point-plus in the margin there.

And the top five sectors in the S&P 500 today were retail-related. The Index thumbing 13 3/4 points.

The 100 rising over four points.

The MidCap gaining about 10 1/2.

And the Bridge CRB Index edging up just a fraction.

The New York Exchange Composite Index and Value Line - each rising more than 7 1/2 points.

The Small Cap Russell 2000 Index gaining more than 12.

And the Broadly-Based Wilshire 5000 rising 161 points.

Bonds were weaker on the day as more profit-takers emerged amid continued thin volume. But bond bulls continue to take heart from the latest report from the Conference Board that the U.S. Index of Leading Economic Indicators fell 0.2 percent last month - that continues to feed expectations of slower economic growth and Fed easing next year. Corporate and tax-free issues were fractionally lower to unchanged.

And Treasuries fell across the board.

The 5-year note falling 9/32.

The Benchmark 10-year note falling 14/32.

And the 30-year bond falling 15/32.

And the Lehman Brothers Long Bond Index dropping nearly eight points.

The Dow rising 110 points for the day. Advancers with a near three to one lead over declining issues, 318 issues with new highs, new yearly highs, 86 new yearly lows.

Lucent Technologies (LU) edging up $0.19. It's been moving sideways since it warned last week about first quarter losses.

Nortel Networks (NT) rising $0.88.

AT& T (T) falling $0.53, sitting at its 52 week low that it set last week.

America Online (AOL) falling nearly 3. It's near its two year closing low and the company has already warned regulators of the financial burdens it faces if the merger with Time Warner (TWX) is not approved by year's end. There's only two more trading days left.

Motorola (MOT) gaining $1.19.

Texas Instruments (TXN) jumping $3.75, the company unveiling a new analog to digital converter unit today and that capped a four percent gain in the semiconductor index today.

GE (GE) falling about a $1.

Compaq (CPQ) rising $0.41.

Qwest Communications (Q) picking up more than a $1. The company has already confirmed strong demand for DSL equipment, may help fourth quarter earnings top analysts' estimates of $0.14 a share.

Viacom (VIA.B) falling $0.94.

And among the widely helds, The Gap (GPS) climbing more than $2. Sales at specialty stores rose by more than two percent during the holiday season according to a new survey by an industry trade group.

Johnson & Johnson (JNJ) rising $0.63, its Cordis unit completing its acquisition of Atronix for $62 million.

And J&J says it will take a $0.04 a share charge against fourth quarter results.

Kerr-McGee (KMG) jumping $3.50. ABN Amro repeating a "strong buy" on this natural gas producer.

Procter & Gamble (PG) moving up more than $2.

Time Warner (TWX) down nearly $5 following AOL lower.

Wal*Mart (WMT) gaining $1.94. That's despite Goldman Sachs cutting estimates on the stock today.

And Luby's (LUB), this is a cafeteria chain, rising $1.56. The Pappas restaurant chain said it owns about six percent of Luby's and may seek a seat on the board of directors.

Abercrombie & Fitch (ANF) climbing more than $4, Prudential Securities noting good traffic continues at that apparel retailer.

TNPC (NPW), this is the parent of New Power Company, gaining $1.75, again, on the back of higher natural gas prices today.

Some bottom fishing in shares of Enzo Biochem (ENZ), the stock rising $4.25. The company is expected to enter Phase II trials with its gene therapy to treat HIV.

Apogent Technology (AOT) moving up more than $1. Tucker Anthony upgrading the stock from "buy" to "strong buy" set a one year price target of $28 a share.

Yankee Candle (YCC) falling $1.56. That's a new 52 week low there. No news from the company.

In NASDAQ trading, the Composite Index creeping up about 45.83 points to 2539. Volume nearly two billion shares and that was quite a pick up from yesterday's level, advancers leading decliners by about a 7 to 6 margin.

Among the dollar volume leaders here, JDS Uniphase (JDSU) climbing $5.50. Ryan, Beck & Company repeating a "strong buy" on the stock. Also, JDS Uniphase postponing a shareholder meeting that was scheduled today on the SDL acquisition. It's pushed back to January 26th.

Cisco Systems (CSCO) holding steady.

Juniper Networks (JNPR) gaining $11.

Microsoft (MSFT) losing $0.44.

Applied Micro Circuits (AMCC) gaining a little over $8.

SDL (SDLI) rising nearly $20 with JDSU today.

QUALCOMM (QCOM) rising a bit over $6.

Intel (INTC) falling $0.31.

Sun Micro (SUNW) rising just a fraction.

And Oracle (ORCL) falling a 1/4.