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Calif Senate Committee Pushes Enron Contempt Cite Forward
Dow Jones Energy Service, 07/11/01 Enron Sues To Block Calif From Forcing Document Release Dow Jones Energy Service, 07/11/01 Enron Corp. sues to block Senate from forcing document release Associated Press Newswires, 07/11/01 USA: Enron sues Calif. to block subpoena in price probe. Reuters English News Service, 07/11/01 Enron Sues California Senate; Panel Urges Contempt (Update2) Bloomberg, 07/11/01 CSU, UC reach tentative agreement with Enron to deliver electricity Associated Press Newswires, 07/11/01 Indian state orders probe into Enron's power dispute with government Associated Press Newswires, 07/11/01 Enron's Lay keen on speedy solution to Dabhol Power issue AFX News, 07/11/01 Enron Won't Rule Out Sale of Dabhol Gas Unit, Spokesman Says Bloomberg, 07/11/01 Calif Senate Committee Pushes Enron Contempt Cite Forward 07/11/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) LOS ANGELES -(Dow Jones)- A California Senate committee Wednesday voted to forward to the full Senate a contempt charge against Enron Corp (ENE) becuase the company refuses to provide certain financial documents for an investigation into wholesale power prices in the state. If Enron is deemed to be in contempt by the full Senate, the legislators will vote on punishments that could include fines against the company or incarceration for company executives. "When Enron decides it is so important to keep its information private, I can only assume there is much more there to find than I can imagine," said Sen. Steve Peace, D-El Cajon, a member of the Senate Select Committee to Investigate Market Manipulation. Enron filed a lawsuit Tuesday to stop the Senate's subpoena of financial records, saying the documents were outside of California's jurisdiction. The company is also likely to legally contest the contempt charge, an Enron attorney said during Wednesday's hearings. The market manipulation committee will forward its contempt report to the full Senate by early next week, at the earliest, said Sen. Joe Dunn, D-Santa Ana, chair of the committee. If at any point between now and then Enron decides to comply with the committee's requests, the contempt charge will be dropped, Dunn said. The committee also voted not to recommend a contempt charge for Mirant Corp (MIR), which agreed to provide financial documents Wednesday morning shortly before the hearing. The documents sought by Dunn's committee include information on bidding and pricing behavior in the state's electricity markets. The committee originally was poised to cite eight electricity generators for contempt, but all except Enron have since agreed to provide the requested information. -By Jessica Berthold, Dow Jones Newswires; 323-658-3872; jessica.berthold@dowjones.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron Sues To Block Calif From Forcing Document Release 07/11/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) SACRAMENTO (AP)--Enron Corp. (ENE) is suing California officials to stop a Senate subpoena of its financial records in a dispute over alleged overcharges for its electricity sales to California. "They've sent two things to Texas - our money and these documents, and they saying we can't get either one back," said Laurence Drivon, special legal counsel to the California Senate Select Committee to Investigate Market Manipulation. The suit came hours before the committee will consider asking the full Senate to cite the Houston-based company for contempt Wednesday. The other subject of possible sanctions, Atlanta-based Mirant Inc., appears to be cooperating, Drivon said. Committee chairman Joe Dunn, a Santa Ana Democrat, said the committee's investigation will continue despite Enron's "pure act of intimidation. We're not going to back down." Enron's suit said the company's financial papers are outside the committee's jurisdiction because most of its operations and paperwork are outside California. That shouldn't matter, Drivon said, citing last year's successful of out-of-state documents during the investigation into the activities of former Insurance Commissioner Chuck Quackenbush. Previous investigations have included documents subpoenaed from other nations, he said. Companies doing business in California cannot claim immunity from its laws or oversight, Drivon and Dunn said. Houston-based Reliant Energy made the same argument but then agreed to turn over 1,800 documents. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron Corp. sues to block Senate from forcing document release By DON THOMPSON Associated Press Writer 07/11/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. SACRAMENTO (AP) - Enron Corp. is suing state officials to stop a Senate subpoena of its financial records in a dispute over alleged overcharges for its electricity sales to California. "They've sent two things to Texas - our money and these documents, and they're saying we can't get either one back," said Laurence Drivon, special legal counsel to the Senate Select Committee to Investigate Market Manipulation. The suit came hours before the committee will consider asking the full Senate to cite the Houston-based company for contempt Wednesday. The other subject of possible sanctions, Atlanta-based Mirant Inc., is cooperating, Drivon said. Mirant spokesman Pat Dorinson said the company has turned over 159,000 pages of documents that were being transferred to a repository in Sacramento to comply with the subpoena. The company and the committee reached an agreement last night on the confidentiality concerns, Dorinson said. Committee chairman Joe Dunn, a Santa Ana Democrat, said the committee's investigation will continue despite Enron's "pure act of intimidation. We're not going to back down." Enron's suit, filed in Sacramento Superior Court, said the company's financial papers are outside the committee's jurisdiction because most of its operations and paperwork are outside California. That shouldn't matter, Drivon said, citing last year's successful subpoena of out-of-state documents during the investigation into the activities of former Insurance Commissioner Chuck Quackenbush. Previous investigations have included documents subpoenaed from other nations, he said. Companies doing business in California cannot claim immunity from its laws or oversight, Drivon and Dunn said. Houston-based Reliant Energy made the same argument but then agreed to turn over 1,800 documents. Enron's suit also says Dunn's committee has not given the company a fair hearing, and the committee has not followed due-process protections before seeking sanctions. Not so, said Dunn and Drivon, adding that they negotiated with generators to give them time to comply with the subpoenas. Proof of that, they said, comes in the decision to give Williams, AES, Reliant, Dynegy, Duke and NRG an extra week past Tuesday's deadline to turn over documents subpoenaed last month. In a letter to Dunn, Steven J. Kean, an Enron executive vice president, said several municipal districts were profiting from the power crisis. "Yet, remarkably, the committee has inexplicably chosen not to include these market participants in its investigations." Enron officials are concerned the purpose of the investigation, Kean said, is to "create a convenient political scapegoat to shoulder the blame for California's policy mistakes and changes in market fundamentals." However, Enron has agreed to turn over some "non-confidential" documents at the Wednesday hearing, Kean said. The committee is on the verge of asking the full Senate to impose sanctions for the first time since 1929, when the Senate briefly jailed a reluctant witness during a committee investigation of price fixing and price gouging allegations involving cement sales to the state. There are no set penalties, Drivon said - by law, "the Senate can take such action as it deems necessary and appropriate." Enron is one of the world's leading electricity, natural gas and communications companies, with $101 billion in revenues in 2000. It owns 30,000 miles of pipeline, has 20,000 employees and is active in 40 countries. During the first quarter of this year, Enron's revenues increased 281 percent to $50.1 billion. It is well connected politically. It has supported both President Bush and his father, President George H.W. Bush. Last month the firm was a corporate sponsor at a congressional fund-raiser featuring the president, where contributors in tuxedos and gowns dined and drank around a giant gold "W" that reached to the rafters at the Washington Convention Center ballroom. Enron has also been tied to President Bush's approach to the energy crisis. Company chairman Kenneth Lay is a friend and one of the largest campaign contributors to Bush and the GOP. Several prominent members of the Bush administration hold stock in the company. The company is one of several major GOP donors accused of meeting secretly with Vice President Dick Cheney as he drafted the Bush administration's energy plan. ---- On the Net: http://www.enron.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: Enron sues Calif. to block subpoena in price probe. 07/11/2001 Reuters English News Service (C) Reuters Limited 2001. SACRAMENTO, Calif., July 11 (Reuters) - Energy giant Enron Corp. filed a lawsuit on Wednesday against a California legislative committee investigating it for possible price gouging in the state's volatile power market. The Senate Select Committee, leading the probe, last month found Enron and fellow energy merchant Mirant Corp. in contempt for refusing to hand over papers documenting their wholesale power sales. "Today Enron has filed suit against the Select Committee seeking to have an impartial neutral court determine Enron's rights and obligations under the Select Committee subpoena," Enron said in a statement after filing its suit in Sacramento Superior Court. While agreeing to provide "certain information and documents sought in the Committee's subpoena", the Houston-based company again refused to hand over confidential business documents. Enron argued the committee has no legal jurisdiction over wholesale electricity prices, which are regulated by the Federal Energy Regulatory Committee (FERC), and that the committee's proceedings violate the company's legal rights. The company also questioned whether the committee's actions "are designed to uncover the facts underlying the price spikes in California's...power market, or to create a convenient political scapegoat to shoulder the blame for California's policy mistakes and changes in market fundamentals." Enron's tough stand against the committee's subpoena prompted a contempt ruling on June 28, the first time in 72 years California has cited a company for contempt. Enron's lawsuit landed while the committee was gathered to vote on whether the contempt ruling should be reported to the full state senate, which has the power to slap sanctions on the company and can even fine or imprison its officers. In addition to Enron and Mirant, state officials have accused Reliant Energy Inc. , Duke Energy Corp. , Williams Cos. , and Dynegy Inc. of overcharging California power agencies and utilities some $8.9 billion for wholesale electricity over the past 14 months. Power prices in the state soared tenfold over the past year, prompting warnings from California Governor Gray Davis that the state is on track to spend $46 billion for electricity this year compared with $7 billion in 1999. Davis has blasted FERC commissioners for failing to ensure just and reasonable power prices in California and threatened to take the matter to federal court unless it is awarded refunds for the full $8.9 billion at stake. Independent energy merchants have blamed the price spike on the state's poorly designed electricity deregulation law and a failure to build enough power plants to meet the growing needs of its residents and industries. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron Sues California Senate; Panel Urges Contempt (Update2) 2001-07-11 17:26 (New York) Enron Sues California Senate; Panel Urges Contempt (Update2) (Adds committee vote in 2nd paragraph, lawmaker comment in 7th paragraph.) Sacramento, California, July 11 (Bloomberg) -- Enron Corp., the world's largest energy trader, sued a California state Senate committee to quash a subpoena for internal documents, accusing the panel of trying to blame the company for the state's power woes. The Senate panel responded by voting for a second time to recommend the full state Senate hold Enron in contempt and impose fines or other punishments if the company refuses to turn over the documents. The vote was 6-0. Enron is fighting a committee subpoena issued last month demanding thousands of pages of documents relating to the company's energy trading in California. The panel is probing whether generators manipulated the power market. Soaring wholesale prices last year left utilities unable to buy power, and the state began purchasing energy on their behalf. ``It is exceedingly difficult to discern whether the committee's actions are designed to uncover the facts underlying the price spikes in California's wholesale market, or to create a convenient political scapegoat,'' Enron Executive Vice President Steven Kean wrote in a letter to the committee. The full Senate won't receive the committee's recommendation until next week, giving Enron time to turn over the documents, said Committee Chairman Senator Joseph Dunn, a Democrat. ``The next move is now up to Enron,'' Dunn said. The Lawsuit Enron's suit claims that federal regulators have sole jurisdiction over wholesale energy trading and that the Senate subpoena is too broad, according to a copy of the suit released by Enron. Enron also accused the committee of singling it out for blame when dozens of companies sold power to the state. The Senate Select Committee to Investigate Price Manipulation in the Wholesale Energy Market voted last month to hold Enron Corp. and Mirant Corp. in contempt after they refused to turn over documents the committee was seeking. The committee gave the companies until today to comply. Mirant has already turned over 160,000 pages of documents, said Larry Drivon, special counsel to the committee. The committee voted to nullify the contempt charge against the company. California claims energy generators and traders overcharged the state by $8.9 billion. Talks ordered by the Federal Energy Regulatory Commission to settle those allegations broke down earlier this week without an agreement. Energy generators and traders had offered California a total of $716 million in refunds. FERC Administrative Law Judge Curtis Wagner asked federal regulators to determine appropriate refunds, if any. California Governor Gray Davis said that if the state isn't awarded the full $8.9 billion in refunds, it would file suit against the energy companies. ``If you think California is going to settle for $1 billion in refunds, we will see you in court,'' Davis said yesterday. CSU, UC reach tentative agreement with Enron to deliver electricity By CHELSEA J. CARTER Associated Press Writer 07/11/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. LONG BEACH, Calif. (AP) - California's two public university systems have reached a tentative settlement with Enron Energy Systems Inc. to buy cheap power, bringing to an end a federal lawsuit accusing the Houston company of wanting to sell the electricity at a higher cost. Enron has tentatively agreed to extend its contract with California State University and the University of California for two years, Chancellor Charles B. Reed told CSU's board of trustees Wednesday. The agreement means the university systems will continue receiving electricity directly from Enron rather than from Southern California Edison and Pacific Gas & Electric. "The agreement means considerable savings for the universities and allows us to continue with our energy conservation efforts," said Richard West, CSU's executive vice chancellor and chief financial officer. In a prepared statement, Enron confirmed the tentative agreement. "Enron has always been a strong advocate of the benefits of direct access, and we are pleased to be able to extend our contract for two years with UC/CSU," said Marty Sunde, vice chairman of Enron Energy Services, said in a written statement. Although a tentative agreement has been reached, West said the university systems were continuing to negotiate price and other terms of the contract extension. The agreement is expected to be finalized by December. Executives of Enron were attempting to get out of delivering power for the final year of a four-year deal with CSU and UC. Enron, which buys power from producers and sells it on the market, said the contract would cost the energy company $12 million a month because of skyrocketing wholesale power prices. Enron said the state should free it from its obligation and taxpayers should pick up the tab. The state argued the company wanted to increase its profit. A federal judge ordered Enron to continue supplying power to the two university systems in April. Enron appealed the ruling to the 9th U.S. Circuit Court of Appeals in San Francisco. UC's annual electric bill is about $87 million and its natural gas bill is about $26 million. CSU annually pays about $40 million for electricity and $20 million for natural gas. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Indian state orders probe into Enron's power dispute with government By KUMUDINI SALYANKAR Associated Press Writer 07/11/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. BOMBAY, India (AP) - An Indian state ordered an investigation Wednesday into a dispute between the state's utility company and U.S. power supplier Enron Corp. over the purchase of electricity, news reports said. A judge will investigate various aspects of the agreement between a subsidiary of Enron and the Maharashtra State Electricity Board, Press Trust of India quoted state Chief Minister Vilasrao Deshmukh as saying. He said the terms of the probe would be decided within a month. Hours earlier, Enron Corp. Chairman Kenneth Lay said he was hopeful of a solution to the dispute, in which Enron accuses the state-run power utility of defaulting on payments. The utility denies that it defaulted and accuses Dabhol Power Company, Enron's Indian unit, of charging exorbitant prices. Indian politicians have called for renegotiating the 1995 purchase agreement. Federal and Maharashtra state officials are holding talks with Enron and the state utility to resolve the dispute. "I am hopeful there will be some solution to the problem," Lay told reporters after meeting political leaders in Bombay at the end of his three-day stay in India. "The federal government has a very large role to play," said Lay. "The government listened to my points but it's not for me to say what they will decide." He said he met lenders, government officials and political leaders in New Delhi, India's capital, and Bombay. Enron in mid-May issued a notice to the state utility, warning it to stop defaulting on payments and threatening to halt work on a new dlrs 3 billion power plant, the biggest-ever foreign investment in India. The utility countered by demanding that Enron offset overdue December and January bills of dlrs 48 million with a dlrs 85.31 million fine it levied on the power company for not being able to supply power when required. The second phase of Enron's liquefied natural gas power plant was scheduled for completion at the end of the year at Dabhol, 335 kilometers (210 miles) south of Bombay. "The whole idea is to resolve the problem," Lay said. "It's a very large project and the country badly needs power. Once the LNG project comes up, power will be much cheaper." (str/rtb, nnm/lak-ss) Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron's Lay keen on speedy solution to Dabhol Power issue 07/11/2001 AFX News © 2001 by AFP-Extel News Ltd BOMBAY (AFX) - Enron Corp chairman Kenneth Lay said he is keen for a speedy solution to the ongoing challenges surrounding the Dabhol power project. Enron, Maharashtra State Electricity Board, General Electric Co and Bechtel are the joint venture partners in Dabhol Power Co Ltd, which is setting up the power project in Maharashtra. Media reports indicate that Lay is in India to discuss various options for the project, including a possible takeover of Dabhol Power by the government. Lay said: "I did not want to leave the country this time without reaffirming my interest in and support for India. I hope that we will be able to find a resolution to this problem that allows us all to move forward." The project faced hurdles due to MSEB's inability to pay dues for power purchased from Dabhol Power. The state government has also asked for a reduction in the tariff on power sold by Dabhol Power. jd/jkm/ For more information and to contact AFX: www.afxnews.com and www.afxpress.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron Won't Rule Out Sale of Dabhol Gas Unit, Spokesman Says 2001-07-11 15:48 (New York) Enron Won't Rule Out Sale of Dabhol Gas Unit, Spokesman Says Houston, July 11 (Bloomberg) -- Enron Corp., which is seeking a way to resolve a dispute over a $3 billion Indian power project, hasn't ruled out selling its liquefied natural gas operations there to government-owned Gas Authority of India Ltd., spokesman John Ambler said. Enron is building liquefied gas facilities to process fuel for Dabhol Power Co., the Enron unit that owns the power project in Maharashtra state. Enron and the Indian government have discussed a sale of the gas facilities, the Business Standard newspaper reported on its Web site, citing unidentified people. The report followed a visit to India by Enron Chairman Kenneth Lay, who has been holding talks with officials in New Delhi. ``In the discussions we had with the central government, a whole range of possibilities was discussed,'' Ambler said. ``We're definitely not on any kind of single track.'' The Business Standard report also said the government and Lay discussed the possibility of India's National Thermal Power Corp. taking over Dabhol. India National Thermal would get a 16 billion rupee ($339 million) tax break because it's a local company, allowing it to sell power at lower rates, the paper said. Enron owns 65 percent of Dabhol Power, India's largest private foreign investment. The utility and its sole customer, the state-owned Maharashtra State Electricity Board, are in the midst of a 7-month-old dispute over 3 billion rupees ($64 million) in unpaid bills by the board, and the price Dabhol charges for power. The gas terminal is part of a $2 billion expansion of the Dabhol plant. Some contractors, saying they haven't been paid since April, halted work on the power plant. Construction of liquefied gas facilities wasn't affected because another crew is handling that work. The Dabhol plant now burns naphtha, a chemical refined from crude oil. Switching to natural gas will lower power prices, Ambler said. High prices are the crux of the Maharashtra board's dispute with the utility. The board says Dabhol charges more than double the rates of other Indian generators. Dabhol has long-term liquefied gas contracts totaling 2 million metric tons a year with Oman Liquefied Natural Gas Co., Oman's state owned gas company, and Abu Dhabi Gas Liquefaction Ltd., a unit of state-owned Abu Dhabi National Oil Co. of the United Arab Emirates. In a statement issued as he was leaving India today, Lay said Enron had been ``involved in a range of meetings with political leaders, government officials, business leaders and other interested parties'' designed to resolve the Dabhol dispute. General Electric Co. and private construction company Bechtel Group are partners in the Dabhol project, which is being financed by loans backed the U.S. and Japanese governments, as well as Indian lenders, Lay said. Forty ``of the world's top corporations'' are involved in the project, he said. Shares of Houston-based Enron fell 22 cents to $49 in late trading.
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