While merchant generators complain of the doom and gloom of California?s business climate, economics, regulation, and California Independent System Operator (CAISO) policies, business in the state does not appear to be the primary cause of their financial difficulties. Non-Western operations accounted for much of the financial malaise affecting Duke, Dynegy, FPL, and Calpine, according to recent financial postings by the companies. El Paso, Williams, and Reliant are set to post earnings this coming week. Calpine offered analysts an early prediction but won?t have its official posting until February 26. Duke Energy is awash in red ink, with a reported $2 billion loss in the fourth quarter last year. The company sold $2 billion in assets in 2003 and claimed $2.2 billion in debt reduction. It?s retaining its 4,400 MW in California but deferring 2,400 MW of plants planned for New Mexico, Arizona, and Washington. Those suspensions accounted, in part, for the $3.1 billion in ?special items? charges from the fourth quarter, along with costs for winding down the company?s trading and marketing division. That part of Duke?s operations looked to be a rising profit star three years ago. But the trading and marketing division allegedly engaged in ?wash? or ?round-trip? trading to inflate the liquidity of the market during the energy crisis. Paul Anderson, Duke chief executive officer, said shareholder lawsuits over that practice were dismissed. The company also reduced its workforce by 4,000, according to president Fred Fowler. Standard & Poor?s lowered Duke?s credit rating from <i>BBB+<\/i> to <i>BBB<\/i> February 10. The ratings agency cited ?an ambitious deleveraging plan that could materially improve? finances but carried ?execution risk? in the plan to reduce risk. Standard & Poor?s also noted that Duke continues trading even though it is winding down, which still involves an ?element of risk,? likely because of the bad taste left from the wheeling-and-dealing days during the energy crisis. The company is divesting its Australian power portfolio but remains sanguine about operations in California. Dynegy posted a total loss of $364 million for last year?with a loss of $226 million just in the fourth quarter of 2003. Part of that is from a $13 million charge for ?goodwill impairment? for its half-share of ownership in West Coast Power with NRG. West Coast?s sales contracts with the Department of Water Resources expire at the end of this year. The contract is projected to be worth $3 billion for up to 24,000 MWh\/day. The West Coast venture was capitalized by Banc of America almost five years ago when the stakes for California?s merchant market were high. Dynegy and West Coast agreed in January to a $3 million settlement with the Federal Energy Regulatory Commission on alleged California market-manipulation issues. Calpine is on a big borrowing and big payback capital acquisition plan, which some have called ?drive-by financing.? It has told analysts to expect a net loss of $54 million for the fourth quarter of 2003. The company plans to divulge details February 26. One of the plants Calpine wants to finance with that money is a geothermal facility near Mount Shasta. However, the socially responsible mutual fund investment firm Calvert on February 9 filed a shareholder resolution requesting that Calpine ?cease and desist? from development in Medicine Lake Highlands and ?develop, implement and publish a written policy on the rights of indigenous people.? Calpine has plans for a $120 million, 50 MW geothermal facility on a site that has spiritual significance for Native Americans, particularly the Pit River Tribe. Like Calpine, FPL is heavily invested in renewable energy. Florida Power & Light?s subsidiary FPL Energy posted a fourth-quarter 2003 net income of $38 million, up from $26 million in the third quarter. FPL Energy boasts it is the ?largest owner of wind facilities in the world.? It has a big presence in the Altamont Pass, as well as turbines in Palm Springs, the Tehachapis, and Solano County. It also has the 500 MW Blythe fossil-fueled plant.