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Six Western Power Providers Complete First Step to Form Independent
Transmission Company Business Wire, 05/04/01 UK: London coal/ore fixtures. Reuters English News Service, 05/04/01 INTERVIEW:Early Resolution Seen On India Dabhol Pwr Spat Dow Jones, 05/04/01 Edison to Start Ad Campaign Urging Approval of Power-Line Sale Bloomberg, 05/07/01 Corporate Bond Alert: WorldCom, RadioShack on Docket (Update1) Bloomberg, 05/04/01 Six Western Power Providers Complete First Step to Form Independent Transmission Company 05/04/2001 Business Wire (Copyright © 2001, Business Wire) PORTLAND, Ore.--(BUSINESS WIRE)--May 4, 2000--In an effort to ensure reliability and maximize cost efficiencies, six western utilities have been granted preliminary approval by the Federal Energy Regulatory Commission (FERC) to form an independent high voltage electricity transmission company serving six Western states. The independent, for-profit company, called TransConnect, will be a member of a planned non-profit regional transmission organization, RTO West. The framework for RTO West, which will span eight Western states, also was approved by FERC. Under the proposal approved by FERC, TransConnect could initially own or lease the high voltage transmission facilities currently held by Avista Corp., Montana Power Company, Portland General Electric, Puget Sound Energy, Nevada Power Company, and Sierra Pacific Power Company. Combining transmission resources into one independent company may create new opportunities to attract capital and improve the transmission infrastructure. Among other things, the FERC order approved TransConnect's governance structure and found that TransConnect met the Commission's independence requirements. The order also determined that TransConnect would qualify to file for innovative and incentive rates. Additionally, the order finds that the proposed structure for sharing planning and expansion functions is consistent with FERC's basic requirements, but reserves final approval pending further clarification by TransConnect and RTO West regarding the details and decision process for such sharing. "The TransConnect companies are pleased with the FERC order on the TransConnect filing and gratified that the Commission supports a for-profit business model that has the potential to provide very significant benefits," said Paul Mohler, a representative for the six TransConnect companies. There are a number of additional steps that must now be taken by the companies, including, among other things, preparation of a rate filing and various state and federal approvals. Ultimately, the outcome of TransConnect's proposal and the companies' decisions to move forward with the formation of this transmission company will depend on the economics and conditions imposed during the regulatory approval process and approval by the individual company boards of directors. TransConnect facilities are within the RTO West territory, which will operate more than 90 percent of the high voltage transmission facilities from the U.S.-Canadian border to southern Nevada. The RTO will not own transmission facilities, but will control each participating owners' transmission facilities. CONTACT: Avista Catherine Parochetti, 509/495-2916 or PSE Dorothy Bracken, 888/831-7250 or Montana Power Susan Fischer, 406/497-2951 or PGE Scott Simms, 503/464-7342 or Nevada Power Sonya Headen, 702/367-5680 or Sierra Pacific Karl Walquist, 775/834-3891 16:23 EDT MAY 4, 2001 UK: London coal/ore fixtures. 05/04/2001 Reuters English News Service (C) Reuters Limited 2001. LONDON, May 4 (Reuters) - COAL - Irfon - (built 1996) 150,000/10 tonnes coal Richards Bay/Rotterdam May 20/30 $8.15 fio scale load/25,000 shinc Swiss Marine. Enron TBN - 150,000/10 tonnes coal Richards Bay/Rotterdam Jun 15/30 $7.95 fio scale load/25,000 shinc E.On. ORE - No fresh fixtures were reported. INTERVIEW:Early Resolution Seen On India Dabhol Pwr Spat By Himendra Kumar Of DOW JONES NEWSWIRES 05/04/2001 Dow Jones International News (Copyright © 2001, Dow Jones & Company, Inc.) NEW DELHI -(Dow Jones)- A prolonged electricity payment dispute between U.S.-based Enron Corp.'s (ENE) Indian unit, the Dabhol Power Co., and the Maharashtra State Electricity Board could be resolved within a month, the head of an independent energy think tank said Friday. The dispute over the controversial 2,184-megawatt, $3-billion DPC project in India's western state of Maharashtra came to a head recently when the DPC's board authorized the management to proceed with a preliminary notice of termination - the first of three steps that lead to the abandonment of the project. Despite the move, Rajendra K. Pachauri, director of the New Delhi-based Tata Energy Research Institute, said he is optimistic of a resolution. "It's in everybody's interest to come up with a reasonable settlement. I think DPC will accept a renegotiated contract because they are in an impasse right now," Pachauri told Dow Jones Newswires in an interview. Pachauri is also one of the nine members of the committee appointed by the Maharashtra state government to renegotiate the MSEB's controversial power purchase agreement with DPC. "I do hope that within a month the whole thing can be sorted out. DPC wants the negotiations to be short and decisive and if all the parties are willing, an agreement won't be difficult," he added. The project has been mired in financial disputes since its main customer, the Maharashtra State Electricity Board, has failed to pay several of its bills. Dabhol has come under fire because of the relatively high cost of its power. Critics object to Dabhol charging 7.1 rupees ($1=INR46.83) a kilowatt-hour for its power, compared with INR1.5/KWh charged by other suppliers. The state government has asked the committee to try to negotiate a revised agreement within a month. The committee's goal is to lower the power tariff and allow the sale of excess power to the federal government or its utilities. A restructure of the DPC's stakeholding may also be on the agenda. As reported, the negotiating committee's first meeting with the DPC management scheduled for Saturday has been postponed until 0530 GMT May 11 at DPC's request. DPC Must Run Plant At Full Capacity - Pachauri Pachauri said that it is in DPC's interest to run its plant at full capacity and maximize sales. "Their sales won't be maximized unless the price is attractive. They really need to bring down the cost to the consumer. Our brief is very clear. We have to sit down with them and identify a strategy by which the Dabhol project can be viable for everyone," he said. "This will involve a complete financial engineering of the DPC. You'd need to restructure the project debts and bring down the interest rates (on debts) to the current levels in the market," he added. The DPC project - the largest single foreign investment in India - has a debt-equity ratio of 70:30. Pachauri said Dabhol should agree to charging between INR3.00 and INR3.25/KWh. "This is a reasonable range and should be acceptable to everyone," he said. He said if Enron decided to pull out of Dabhol, it wouldn't have a serious impact on foreign direct investments into India, particularly in the country's power sector. Texas-based Enron has a 65% stake in the DPC, and is the project's largest shareholder. Other shareholders include the MSEB with 15%, and General Electric Co. (GE) and Bechtel Enterprises (X.BTL) with 10% each. The DPC currently operates a 740-MW naphtha plant contributing around 0.7% to India's installed capacity. Enron has maintained that work will be completed by the year-end in the second phase of Dabhol project that will add 1,444 MW to its capacity. The plant will switch from naphtha to liquified natural gas as a fuel source in 2002. -By Himendra Kumar; Dow Jones Newswires; 91-11-461-9426; himendra.kumar@dowjones.com Edison to Start Ad Campaign Urging Approval of Power-Line Sale (For more on the California power crisis, see {EXTRA <GO<}.) Rosemead, California, May 4 (Bloomberg) -- Edison International will spend as much as $3 million to air radio and television advertisements urging the state to complete an agreement to bail out the company's Southern California Edison utility. The spots, which begin running tomorrow, say the state's second-largest publicly traded utility will be forced into bankruptcy unless the Legislature and regulators approve the state's proposed $2.76 billion purchase of Southern California Edison's power lines. A shortage of power plants and flaws in California's deregulation laws have led to blackouts and soaring electricity prices in the state, leaving its two largest utilities with more than $14 billion in power-buying losses. PG&E Corp.'s Pacific Gas & Electric, California's largest utility, last month sought Chapter 11 bankruptcy protection after failing to reach an agreement with Governor Gray Davis. Shares of Edison International, based in Rosemead, California, fell 10 cents to $9.18 in late trading. They've fallen 52 percent in the past year. San Francisco-based PG&E rose 13 cents to $8.99. It has dropped 66 percent in a year. --Mark Johnson in the Princeton newsroom (609) 279-4017, or at mjohnson7@bloomberg.net, with reporting by Daniel Taub in Los Angeles/shf Corporate Bond Alert: WorldCom, RadioShack on Docket (Update1) 2001-05-04 09:40 (New York) (Updates with additional detail in second-fourth and 10th paragraphs) New York, May 4 (Bloomberg) -- Following is a description of corporate and other bond sales expected in the U.S. in coming days, weeks and months: ENRON CORP., the largest energy trader, plans to raise money by selling credit-linked notes in several currencies, according to Salomon Smith Barney, which will manage the sale with UBS Warburg. The sale will follow presentations to investors in Europe and will consist of issues of intermediate maturities. Investors usually regard notes maturing in five to seven years to be intermediate maturities. Salomon declined to provide details on the size or timing of the sale. Credit-linked notes are typically backed by assets owned by the issuer, and payments on the notes are linked to the creditworthiness of those assets. Houston-based Enron's credit is rated ``BBB+'' at S&P and ``Baa1'' at Moody's. (Updated May 2. Company news: {ENE US <Equity< CN <GO<}). --Terence Flanagan and Jennifer Ryan in the New York newsroom (212) 893-5662, or at tflanagan@bloomberg.net/mp
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