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Dabhol notice: Govt has till Monday to respond
Business Standard, 04/06/01 Oregon Regulators: Elec Utils Will Be Able To Buy BPA Pwr Dow Jones Energy Service, 04/05/01 USA: US POWER-Success spells trouble for Calif. energy traders. Reuters English News Service, 04/05/01 UK Kickstarts Wind Pwr Development With 13 Seabed Leases Dow Jones Energy Service, 04/05/01 USA: US POWER-Trust the forecast? Energy trading desks do. Reuters English News Service, 04/05/01 USA: Ecuador to offer Oriente crude contract to Asia. Reuters English News Service, 04/05/01 Greenpeace Readies Action Against Companies Opposing Kyoto Plan Bloomberg, 04/05/01 Dabhol notice: Govt has till Monday to respond Santosh Tiwary NEW DELHI 04/06/2001 Business Standard 2 Copyright © Business Standard With little time left to respond to the arbitration notice served on it by the Dabhol Power Company, the Union finance ministry has asked the law ministry and the Maharashtra government to advise the Centre on the counter-moves to be made. The Enron-promoted company had issued a notice of conciliation and arbitration for the non-payment of the December bill of MSEB of Rs 102 crore, which had the state government as well as the Centre's counter-guarantee. DPC has informed the Centre that it has to respond by 3.00 pm on Monday. Maharashtra government sources said, "Thursday and Friday are holidays on account of Moharrum and Mahavir Jayanti respectively. We will be able to work on the notice only on Saturday. The Centre too will be able to take action only on Monday as Saturday and Sunday are holidays." Finance ministry sources said that the law ministry had earlier informed the government that there was a case for Maharashtra seeking adjustment of "availability penalty" from DPC against the outstanding bills and the Centre was expected to fight it out in the international court of arbitration. They further said that the Centre will respond to the notice well in time. Sources also said that the Centre was contemplating the options through which a long-term solution to the payment wrangle could be achieved. The finance ministry was also firming up on its suggestion of the possibilities of a re-negotiation of the counter-guarantee for a discussion in the Cabinet, they pointed out. The Centre had made it clear earlier that it was interested in finding a long-term solution to the problem by not paying the December bill for which the GoI counter-guarantee was invoked by the DPC, till the penalty issue taken up by the MSEB was settled. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Oregon Regulators: Elec Utils Will Be Able To Buy BPA Pwr 04/05/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) LOS ANGELES -(Dow Jones)- Oregon regulators Wednesday said that the state's electricity restructuring legislation will not prohibit Enron Corp (ENE) utility Portland General Electric and Scottish Power (SPI) unit PacifiCorp from buying cost-based power from Bonneville Power Association for their residential and small farm customers. BPA, the federal agency that markets electricity from dams on the Columbia and Snake Rivers, is scheduled to provide 259 megawatts of cost-based power to Portland General and 135 MW to PacifiCorp, starting Oct. 1, the effective date of the state's restructuring bill. The bill required the Oregon Public Utilities Commission to determine by May 1 whether certain bill provisions would require the utilities to restructure in such a way that they could not meet BPA eligibility requirements for cost-based power. "We've taken great care to make sure we didn't violate (BPA) standards. Even though BPA's rates are going up, this power will still provide benefits for residential customers," OPUC Chairman Ron Eachus said. -By Jessica Berthold, Dow Jones Newswires; 323-658-3872; jessica.berthold@dowjones.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: US POWER-Success spells trouble for Calif. energy traders. By C. Bryson Hull 04/05/2001 Reuters English News Service (C) Reuters Limited 2001. HOUSTON, April 5 (Reuters) - In downtown Houston's booming energy district sit a few companies whose record earnings have made them fat targets for regulators and politicians under pressure to make someone pay for California's power crisis. High energy prices and shrewd trading have earned Houston companies Dynegy Inc. , Reliant Energy Inc. , El Paso Corp. and Enron Corp. huge profits, higher rankings on the Fortune 500 list and happy stockholders. But success has bred contempt and invited political and regulatory fire as California reels from blackouts and rising power rates in a crisis that is engulfing the U.S. West. The power companies' troubles, on both the state and federal level, could get worse if forecasts of a summer electricity shortfall become reality. "I don't think Dynegy, Reliant and Duke and those people are out of the woods yet. The regulatory policy is just not as mature yet," said Jerry Langdon, who served on the Federal Energy Regulatory Commission (FERC) from 1988 to 1993. "While those are unregulated entities, they are being treated like regulated entities." Langdon, a FERC appointee by President Ronald Reagan who is now in the natural gas industry, points to FERC's recent order to 13 power providers to either justify high power prices in California or refund millions of dollars to state utilities. Dynegy and The Williams Cos. were hardest-hit, and are fighting refund orders of $45.8 million and $29.6 million, respectively. STATE TROUBLES FOR GENERATORS And that is just at the federal level. Democratic Gov. Gray Davis of California has already branded the power providers as "out-of-state profiteers," and other politicians and regulators are investigating anti-competitive practices and are proposing various sanctions. The latest volley came Wednesday, when a group of California state legislators proposed a windfall profits tax against power generators. Under the bill, California would set a limit on the amount of profit generators could make and would take any money earned above that level. The bill's sponsors took particular aim right at Houston's generators. "They have been gouging us, and it is time we gouged them. We're sick of paying these outrageous bills to those Texans," California Assemblyman Dion Aroner said. The generators are adamant they sold their power properly, at market prices they can justify. "We'll continue to justify our operations and we'll take the uproar for what it is. Will it get worse? It's hard to speculate," Reliant spokesman Richard Wheatley said. FEDERAL REGULATORY ENVIRONS FAVORABLE The saving grace for the generators may be the Bush Administration's clear hands-off approach to the California crisis, which it has declared a state issue. Bush and FERC Chairman Curtis Hebert both opposes price caps. And power producers could soon have two familiar and friendly faces on the FERC. Bush last week appointed former Texas Public Utility Commission chair Pat Wood III and Pennsylvania Public Utility Commissioner Nora Mead Brownell, both of whom oversaw their states' power deregulation efforts. "With the new appointments to FERC, I think it's pretty clear they are not going to interfere with California," said John Herrington, a former energy secretary in the Reagan administration who lives in California. But if fears of a summer power shortfall come true in California and west as expected, the Bush administration's stance could change, said former FERC chairman and Clinton administration deputy Energy Secretary Charles Curtis. "Those concerns will find a public expression, and they will likely be calls for regulatory intervention," Curtis told Reuters. "The naked powers exist to impose a greater regulatory discipline on the market. "Whether they will be exercised or not remains to be seen," he said. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. UK Kickstarts Wind Pwr Development With 13 Seabed Leases By Geoffrey T. Smith and Germana Canzi Of DOW JONES NEWSWIRES 04/05/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) LONDON -(Dow Jones)- The development of wind power in Europe's windiest country passed a major landmark Thursday as the U.K. awarded seabed leases covering 13 offshore wind farm projects. If all the projects go ahead, they are likely to result in GBP1.5 billion in investments and create an installed capacity of up to 1,500 megawatts, according to estimates by the British Wind Energy Association. Now all the projects must go through planning permission procedures which will take up to three years. The first generation of wind farms won't be operational until 2004. Among the companies to be awarded leases were arms of numerous established U.K. generators such as Innogy PLC (IOG), Powergen PLC (PWG), Scottish Power (SPI), TXU Europe (TXU) and Edison Mission Energy, as well as foreign companies with experience in their home markets such as German-based EnergieKontor (G.EKT) and Denmark's Elsam A/S and NEG Micon A/S (K.NEG). Energy trading giant Enron (ENE) and Royal Dutch/Shell (RD) were also among the successful applicants, as were independent developers such as Warwick Energy Ltd. and Seascape Energy Ltd.. The projects - seven in the Irish Sea and six in the North Sea - represent the first concerted effort in the U.K. to raise the contribution of renewable energy sources, other than hydropower, in the overall energy mix. Most of the projects will be limited to around 30 turbines which, given current turbine technology, will limit the capacity of individual projects to less than 100 MW. In contrast, companies in countries which have aggressively subsidized wind energy, such as Germany and Denmark, already have plans for offshore facilities promising well over 500 MW. Geraint Jewson, a director of Celtic Offshore Wind Ltd., said he saw scope to defer procurement until around 2003, when it may be possible to buy bigger turbines, although PowerGen and Enron confirmed they have already opted for current turbines in the 1.5-MW to 2-MW range. PowerGen has contracted Danish company Vestas A/S (K.VWS) to supply its turbines. Crown Estates and the BWEA are currently in negotiations over a second round of licenses for larger sites but a spokeswoman for Crown Estates said there is no timetable for awarding these leases yet. The U.K. has led the world in deregulating its electricity market in the last 10 years, but policy-makers' concentration on making electricity cheaper for consumers has tended to work against renewable sources such as wind, whose generation costs have been traditionally higher than those for conventional sources such as coal, natural gas and nuclear power. Up until now, the prime contribution of wind to the U.K. energy sector has been to blow the emissions of coal and gas-fired plants across the North Sea to Norway, affecting the environmental consciousness of both countries accordingly. The recent introduction in the U.K. of new trading arrangements for the wholesale electricity market has exacerbated this by pushing prices lower and forcing companies to devote much greater resources to trading in near real-time. This is something which is frequently impossible for small-scale generators to do, especially when the source of the power is, by its nature, unpredictable. However, these difficulties may be at least partly addressed by 2004, when all public electricity suppliers in the U.K. will be obliged to buy a certain proportion of their supplies from renewable generation. One element of wind power which won't be resolved by then is its volatility, and the difficulties it makes for the grid operator who must balance demand and supply in the system on a second-by-second basis. A spokesman for National Grid Group PLC (NGG) said he didn't expect any major complications from the first round of projects however. "We can accommodate a fair bit of renewable generation before there are any issues involved," he said. Even so, he warned that grid operators "will need more timely information from renewable generators" over time to help it balance the system. -By Geoffrey T. Smith and Germana Canzi, Dow Jones Newswires; (+44 20) 7842 9260; geoffrey.smith@dowjones.com (Andrea Chipman in London and Michael Young in Copenhagen contributed to this article) Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: US POWER-Trust the forecast? Energy trading desks do. By Paul Thomasch 04/05/2001 Reuters English News Service (C) Reuters Limited 2001. NEW YORK, April 5 (Reuters) - While it may be weeks or months before temperatures really start soaring in California, weather forecasters are already feeling the heat. Once a profession where graduates took jobs in government, academia or television and radio, forecasters are now finding they have a place in the business world, too. Agriculture and airlines have long employed meteorologists, but the advent of power trading in the past decade has made it particularly true in the energy business. Utilities have discovered that shifts in weather can quickly turn into millions of dollars in profits or losses. "In the financial community, utilities are thought of as the old, staid, secure, dividend-paying stocks that you like to own," said Guy Dicciani, a weather derivatives trader with Reliant Energy Wholesale Group, an unregulated unit of Reliant Energy . "But in the new deregulated world, a lot of energy companies are now subject to wild swings in revenue. And the shareholders and institutions don't like to be told that revenue is highly influenced by weather." That, experts say, has made a good meteorologist a hot ticket. BRIEFING FOR TRADERS As California has shown, the stakes can be sky-high when it comes to forecasting. The state's failed deregulation plan has pushed it into a power crisis, causing rolling blackouts and threatening Pacific Gas and Electric and Southern California Edison, units of PG&E Corp. and Edison International , with bankruptcy. Throw an unexpected heat wave into the mix this summer and the state's crisis could quickly worsen. That's where Mike Pass and his colleagues come into play. After stints with the National Weather Service and on television in Texas and Louisiana, Pass is now the senior meteorologist for Reliant's Wholesale Group, leaving him the responsibility of briefing traders like Dicciani and others on forecasts stretching as far forward as 15 days. At the morning meeting, Pass said, a roomful of energy traders goes silent when he starts talking about the weather. "It starts out noisy, but when we're into that briefing, within seconds everyone is paying attention." The reason for such attention is not lost on him. "Weather drives the power demand, and therefore weather is a critically important issue to utilities," Pass said. THE BOTTOM LINE The energy industry's fascination with weather forecasting stretches beyond companies such as Reliant, Enron Corp. and Aquila Inc. , which have hired their own staffs of meteorologists. It has also been a shot in the arm for companies such as AccuWeather Inc., which employs more than 90 meteorologists. Founded by Dr. Joel Meyers, considered a pioneer in the business, the company provides forecasting services to 150 companies on the Fortune 500. Its clients also include 50 to 75 energy companies, some of which are provided with tailor-made updates by the hour. "Clearly in determining gas usage and electricity load, weather information is critical," said Meyers. "We've been told our forecasts can make a swing of half a million dollars a day in the bottom line." For students of meteorology - about 800 graduate each year with either a bachelors, masters or doctorate degree - the rise in energy-related jobs has been a welcome relief. "In the past few years, the impact of the private sector on the field has been widespread," said Keith Seitter, deputy executive director of the American Meteorological Society, and a former professor of meteorology. "A lot of industries are becoming more and more aware that their business is weather sensitive, and are willing to pay for that information," he said. PAY'S STILL LOW But few people go into the field thinking about dazzling jobs in the business world. Rather, meteorologists just love the weather, according to Seitter. "The people who go into meteorology can't imagine doing anything else." And they'll do it regardless of the pay, which can start as low as $25,000 a year. Bill Syrett, who manages the weather observatory at Penn State University, which has graduated about one in every four meteorologists now working, warns parents of prospective students that their kids aren't likely to get rich on the weather. Even with jobs popping up in energy and trading. "The curriculum here - and at most schools that have a reputable program - emphasized math and physics. It's kind of the same as the curriculum for engineers," said Syrett. "But what I tell parents of students is their kids will start at half the pay." So what's the problem? "We're penalized for our passion," he said. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: Ecuador to offer Oriente crude contract to Asia. 04/05/2001 Reuters English News Service (C) Reuters Limited 2001. NEW YORK, April 5 (Reuters) - Ecuador will announce a tender to sell an Asian term contract for Oriente crude oil this Friday, state Petroecuador said. "The council will decide by Friday on the conditions and terms of the tender," a Petroecuador official said. Ecuador sells its Oriente crude through 11 one-year term contracts. The 12,000 barrel per day (bpd) Asian contract going on tender was previously held by Korean refiner LG International. LG International has a second one-year term Oriente crude contract of 18,000 bpd that should expire in September or October, depending on the last loading date, Petroecuador said. Other firms holding Oriente contracts include Texaco Inc, which receives 24,000 bpd; Japan-backed Arcadia Petroleum for 24,000 bpd; Swiss trading Glencore International AG for 12,000 bpd; Enron Corp holds 12,000 bpd; Uruguay's state oil firm ANCAP with 12,000 bpd, while Nicaragua's state owned company receives 12,000 bpd. Petrotrin, Trinidad and Tobago's oil company, is expected to sign a contract for 12,000 bpd of Oriente later this month. Terms of the ongoing contracts include a $25 million prepayment, and a fixed discount of $8.75 a barrel to West Texas Intermediate (WTI) to guarantee a $20 floor price. The contract going on tender will have a price differential pegged off Oman crude. Petroecuador currently exports about 126,000 bpd of Oriente crude, which is expected to rise to 138,000 bpd if the Petrotrin contract is signed. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Greenpeace Readies Action Against Companies Opposing Kyoto Plan 2001-04-05 11:48 (New York) Greenpeace Readies Action Against Companies Opposing Kyoto Plan Amsterdam, April 5 (Bloomberg) -- Greenpeace International, an environmental pressure group, said it's preparing a campaign against the top U.S. companies opposing a plan to fight global warming agreed in Kyoto, Japan, four years ago. The Amsterdam-based environmental group called on the top 100 U.S. companies to state publicly they support the plan or to ``face the consequences.'' The group stopped short of outlining any specific threat, saying only that it was soliciting views of companies at this point. The comments underscore the depth of anger by environmental groups to U.S. President George W. Bush's decision last week to back away from the Kyoto plan. That plan would force industrial nations to cut smokestack emissions blamed for hurting the earth's climate by 5.2 percent from 1990 levels by 2012, something Bush says would be too costly for industry and consumers. ``It's a clear warning,'' said Bill Hare, policy director for Greenpeace's climate change program. ``There are many things Greenpeace could do. We don't announce our actions in advance. A boycott is only one of many options. We want to see what the companies say about their policy on global warming.'' European Union officials are hoping to jump-start talks to implement the Kyoto plan ahead of a meeting of world environment ministers in July in Bonn. Dutch Environment Minister Jan Pronk, who is mediating the Kyoto talks, plans to issue a proposal on how to restart talks within the next few days. He meets with fellow ministers and civil servants in New York on April 21. No Sanctions The EU is holding back from backing any sanctions against the U.S., which spews a quarter of the pollutants that would be restrained under the Kyoto plan. It wants to see alternative proposals on fighting global warming. ``I don't think it's time now to talk about sanctions,'' Margot Wallstroem, the EU environment commissioner, said at a briefing in Brussels. ``When they come to Bonn and give their view, from then on it's time to decide what to do.'' Greenpeace is sending a questionnaire to the 100 biggest U.S. companies, named by Fortune Magazine, about whether they support the Kyoto plan and how they feel about Bush's opposition. The group plans to publish its findings to inform its 2.5 million supporters and lay the groundwork for a campaign. Exxon Mobil Corp., the world's biggest publicly-traded oil company, leads the Fortune list of top 100 companies and is one of the most visible critics of efforts to cut emissions from burning fuels including oil, natural gas and coal. Others such as Enron Corp., which is No. 7 on the Fortune list, support the Kyoto plan. Wal-Mart Stores Inc., General Motors Corp., Ford Motor Co., General Electric Co., Citigroup Inc., International Business Machines Corp., AT&T Corp. and Verizon Communications Inc. also lead the Fortune list. Greenpeace said its members are frustrated they have no voice in opposing Bush's stand on environmental issues. ``The American people can register their opinions at the ballot box, but for the rest of the world all we can do is register our opinions via the marketplace,'' said Gerd Leipold, executive director of Greenpeace International. ``From the mail and phone calls we've been receiving, it's clear the public wants to do just that.'' --Reed V. Landberg in the London newsroom 44-20-7330-7862 or landberg@Bloomberg.net/pnt
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