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John Rice, ceo of GE Power Systems, predicts that U.S. power companies will have to increase the percentage of renewable generation sources in their portfolios, even without legislation designed to cut emissions. "I don't stand up here as a tree-hugger, but this is something we are going to have to deal with," Rice told delegates at Infocast's 10th Annual Power Industry Forum in Washington, D.C., last week.

Tractebel North America is close to signing a $100 million loan for a 343 MW gas-fired plant in Ennis, Texas with five banks. A 20-year, $220 million deal was kicked around for much of last year, without ever being launched, until leads CoBank and Abbey National Treasury Services stepped down (PFR, 12/9).

UBS Warburg Energy is considering setting up an energy-trading and marketing operation in Europe. The Stamford, Conn.-based business--established early last year when UBS acquired the core of Enron's Houston trading business and its EnronOnline trading platform (PFR, 3/3/02), has found its feet in the U.S. market and is now looking to spread its wings, says one market watcher familiar with its plans.

The Federal Energy Regulatory Commission has awarded Deutsche Bank a license to trade physically settled power contracts in the U.S. Deutsche Bank, which already trades oil across the globe and power in the U.K. and Germany, becomes one of only two European banks that have gained FERC approval. The other European bank, UBS, entered the U.S. early last year through its acquisition of Enron's EnronOnline trading platform (PFR, 3/3/02).

Energi-E2, a Danish power producer and energy trader, reportedly has retained J.P. Morgan to advise it on making a bid for Electricite de France's 36.5% stake in Swedish utility Graninge. The tie-up signifies E2's serious intent about filing a bid, says one banker, adding that EdF's stake likely will fetch some EUR400 million ($450 million). Marianne Grydgaard, communications manager at E2, says she is unaware of any interest at E2 in Graninge, and bankers at J.P. Morgan and EdF's advisor Merrill Lynch declined to comment. EdF retained Merrill earlier this year to evaluate a possible sale of its stake in Graninge (PFR, 2/17).

Alabama Power has tapped into investors' strong interest for utility fixed-income paper with a $250 million issue of five-year paper priced at just 50 basis points over Treasuries. The deal more than halves the borrowing cost of existing five-year debt that's being replaced.

Williams Co.s is set to launch a $400 million loan facility to refinance the richly priced $900 million loan it had to set up during its liquidity crisis last year. The new facility is being led by Lehman Brothers and is priced around the 400 basis point over LIBOR mark, according to a financier close to the deal. Other banks are in line for senior roles and the deal will be launched today.

Several U.K. power trading shops, including Innogy, Accord Energy and Entergy-Koch Trading and broker Spectron are looking to forge an electricity swaps market. John Evans, director of business development at Spectron in London, says it has met many of the leading energy trading firms recently to agree on standardized rules and indices.

American Electric Power is beefing up its use of credit derivatives to hedge the risk that trading counterparties could go belly up. The Columbus, Ohio, power giant entered into a $30-40 million credit-default swap late last month to cut its exposure to one energy counterparty and also is considering entering a total return swap for the first time to hedge credit risk.

Private equity shop Madison Dearborn Partners, with over $7 billion under management, has agreed to bankroll the U.S. generation asset acquisition plans of Noble Power Assets, a boutique in Chester, Conn. Justin Huscher, managing director at Madison Dearborn in Chicago, announced the plans at a conference in New York. Calls to Huscher and John Quirke, senior v.p. of operations at Noble, were not returned by press time.