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California's Most Wanted Honchos
Business Week, August 13, 2001 The Smart Business 50 Ziff Davis Smart Business ,August 13, 2001 Enron Seeks Sale of Azurix Argentina Assets - Paper Dow Jones International News, 08/07/01 USA: AOL Time Warner relaunches Business 2.0 magazine. Reuters English News Service, 08/07/01 VENEZUELA: Venezuela OKs Petrotrin stake in offshore oil field. Reuters English News Service, 08/07/01 INDIA: S&P downgrade seen hurting Indian markets briefly. Reuters English News Service, 08/07/01 Enron unit Azurix to sell Argentina ops to Bouygues' Saur - report AFX News, 08/07/01 Ziff Davis SMART BUSINESS Honors the Top 50 U.S. Companies That Are Using t= he Internet to Grow Their Business PR Newswire, 08/07/01 PGE Joins Other Western Utilities to Oppose FERC Actions Business Wire, 08/07/01 Four Utilities Seek Changes to California Price Caps (Update1) Bloomberg, 08/07/01 American Water to Pay $150 Mln for Enron Water Unit (Update2) Bloomberg, 08/07/01 NewPower Sees 2001 Sales Below Forecast, Stock Falls (Update5) Bloomberg, 08/07/01 California's Most Wanted Honchos Business Week, August 13, 2001 It may be humid in Houston, but it's even stickier in California if you're = a Texas energy exec. Enron Chairman Kenneth Lay indefinitely postponed an A= ug. 7 speech to Town Hall Los Angeles, a civics organization. The reason? E= nron confirms it feared Lay would be arrested if he set foot on California = soil. Enron (ENE) has been cited for contempt by a California Senate commit= tee investigating charges of electricity price gouging. Enron refuses to pr= ovide what it calls classified documents unless a judge ensures they'll rem= ain confidential. "The Senate is looking for a political scapegoat, and we = can't trust the situation," says an Enron spokeswoman. Lay isn't the only Texan to cancel California. Reliant Energy (REI) Chairma= n R. Steve Letbetter skipped a July 18 speech to the same group. Reliant wa= s also cited by the Senate. A Reliant spokesman says Letbetter had more urg= ent business in Houston. Of course, Lay may also have been trying to avoid the fate of his CEO, Jeff= rey Skilling. In San Francisco on June 21 (pre-citation), an electricity ac= tivist hit Skilling with a cream pie.=20 By Christopher Palmeri The Smart Business 50 By The Editors of Ziff Davis Smart Business, Ziff Davis Smart Business=20 August 13, 2001 9:00 PM PT Last year, in the first smart business 50, we defined a new kind of Interne= t company. Never mind Yahoo and eToys and Pets.com. Instead we highlighted = companies established years before the Web-and honored those that=20 had most successfully embraced the Net to expand and enhance their business= . If last fall you'd invested in the publicly traded stocks among those 50 = most Internet-savvy U.S. companies-including General Electric, Enron, Charl= es Schwab, UPS, Lands' End, and W.W. Grainger-you'd have beaten the market = overall (see chart, page 69).=20 Live and learn. By now it's conventional wisdom that the Internet isn't a b= usiness model, it's just a bunch of com puters connected together. Using it= as a revolutionary=20 communications medium is a first step, but delivering value to customers-an= d making more money than you spend-remains key to business success.=20 "Why does a company like Carrier do e-business?" asks Andre Papaleo, vice p= resident of e-business at the 99-year-old manufacturer of air conditioners.= "Because we love to program in Java?" No. Carrier's e-business efforts, li= ke any other initiatives, must meet one or more specific criteria, he says.= They must increase market share, improve profitability, bolster asset velo= city by speeding product cycle times, or enhance user satisfaction.=20 If the Net isn't doing at least one of those things, why bother?=20 As we surveyed companies for this year's Smart Business 50, we learned much= about what's worked online in 2001. We've pulled out the 10 key trends in = Internet business and labeled them as lessons.=20 The lessons are diverse. Enron, our top company this year, stormed onto the= Internet with one of the largest private marketplaces in history, doing ov= er $3 billion in transactions a day. As many public online marketplaces con= tinue to flounder, the success of Enron Online shows that the best way to a= ttract buyers and sellers to a market is not to build a Web site and hope t= hey come, but to be an attractive buyer and seller yourself.=20 General Electric (No. 4) has turned the Internet inward to use it as a powe= rful collaboration platform. General Motors (No. 33) and Raytheon (No. 34),= meanwhile, are among the leaders in using the Net to teach and train their= employees.=20 Dell (No. 9) and Herman Miller (No. 10) exemplify how the Internet build-to= -order model not only gives customers what they want, but slashes inventory= and production costs. Chemical maker Sigma-Aldrich (No. 20) now uses conte= nt to drive its e-commerce.=20 Meanwhile, as the Internet matures in the 21st century, it's moving into ne= w places. Though Americans haven't embraced shopping from cell phones and P= DAs in force, wireless data technology is improving, and United Airlines' (= No. 32) wireless services for travelers are a perfect example. Rumpus (No. = 15) decided not to play ball with traditional toy retailers and children's = media experts, instead becoming one of the most prolific developers of anim= ation on the Web.=20 Carrier (No. 48) is among the forward-thinking manufacturers incorporating = the Internet into their products-in Carrier's case, thermostats and air con= ditioners-to make them more desirable and provide better information about = their use. The Internet is finding a home, too, in a venue once thought inh= ospitable: brick-and-mortar stores. Internet kiosks in Staples' (No. 38) mo= re than 950 stores help shoppers go home satisfied.=20 And the success of credit card issuer Capital One Bank (No. 42), after it w= aited so long to formulate its Internet plan, shows what else has changed. = Last year it was fashionable to rap laggard companies that hadn't rushed th= eir core business onto the Web. As it turns out, other banks' supposed firs= t-mover advantage proved to be less useful than Capital One's patient insis= tence on first understanding what worked.=20 How We Did It For this year's Smart Business 50, our team of reporters and editors did wh= at journalists do best: months of research, starting with leading U.S. comp= anies across every industry, as well as nonprofit organizations and governm= ent agencies. We ruled out pure-play Internet companies-they're not what th= is list is about. We interviewed e-business chiefs at diverse companies and= asked them to nominate their peers.=20 We also consulted the experts. Two advisors in particular pointed us to e-b= usiness leaders in their areas of expertise: Patricia Seybold, CEO and foun= der of the Patricia Seybold Group and author of The Customer Revolution (Cr= own Business, 2001), helped identify companies that use the Web to bolster = their customer capital. William Markham, a logistics expert at AT Kearney, = pointed us to businesses successfully integrating the Net in logistics and = distribution processes.=20 Finally, we selected leaders in retailing, manufacturing, financial service= s, media, health care, transportation, distribution, and other sectors. Ult= imately, the ranking represents the well-considered opinion of the Ziff Dav= is Smart Business editors.=20 We learned a lot. We think you will too.=20 No. 1: Enron http://www.zdnet.com/smartbusinessmag/stories/all/0,6605,2799242-4,00.html Enron Seeks Sale of Azurix Argentina Assets - Paper 08/07/2001 Dow Jones International News (Copyright © 2001, Dow Jones & Company, Inc.) BUENOS AIRES -(Dow Jones)- Azurix Corp., a unit of Enron Corp.(ENE), plans = to sell its Argentina operations to Societe de Amenagement Urbain et Rural,= or Saur, of France, its partner in Mendoza province, the Buenos Aires Econ= omico newspaper reported Tuesday.=20 John Ambler, chief spokesman for Houston-based Enron's Latin America operat= ions, said company guidelines regarding possible asset sales prevented him = from commenting on the newspaper report. However, "Azurix has made it clear that it is looking to divest its assets = worldwide," Ambler said.=20 On Monday, American Water Works Co. (AWK) agreed to buy Azurix's North Amer= ican operations for an undisclosed amount. Enron took Azurix private earlie= r this year.=20 Azurix and Saur each own 32.1% of Obras Sanitarias de Mendoza, a water comp= any in which Azurix bought a minority stake in May 1998, Ambler said.=20 In July 1999, Azurix won the bidding for the state-run Direccion de Obras S= anitarias de Buenos Aires and currently owns 90% of the water company, whic= h serves the largest and most populous of Argentina's 23 provinces.=20 Earlier this year Azurix was criticized by the government of the province o= f Buenos Aires for the quality of its service and was asked to increase its= investments in the province's drinking water and sewer systems.=20 -By Tim Loughran, Dow Jones Newswires; 5411-4313-1918; tim.loughran@dowjone= s.com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 USA: AOL Time Warner relaunches Business 2.0 magazine. By Reshma Kapadia 08/07/2001 Reuters English News Service (C) Reuters Limited 2001. NEW YORK, Aug 7 (Reuters) - Media giant AOL Time Warner Inc., which had lau= nched a new economy magazine last year at the height of the Internet boom, = unveiled a new version of its Business 2.0 magazine on Tuesday designed to = marry the once-high-flying dot-com sector with old economy stalwarts.=20 The relaunched monthly magazine, Business 2.0, combines Time Inc.'s eCompan= y magazine with the Business 2.0 publication which AOL Time Warner bought f= rom Future Network Plc in June for $68 million. The front cover of the August issue of Business 2.0, the first edition of t= he relaunched magazine, features the heads of old economy companies Enron C= orp. , Charles Schwab Corp. and UPS, rather than the dot-com poster childre= n that graced magazines covering the Internet and technology during the dot= -com boom of the late 1990s.=20 The cover signals the magazine's shift to covering technology issues at all= levels in the corporate world. The move comes as a sharp downturn in adver= tising has caused many publishers to retreat and retool their magazines.=20 "The story that once was outside mainstream America corporate life is now i= nside it," said Ned Desmond, the new magazine's editor at a press briefing = here. "It's not about dot-com spin-offs being run by VCs (venture capital f= unds), but concepts, technology and ideas moving through real companies."= =20 The shift follows in the footsteps of rival publications, such as Industry = Standard and Fast Company, which have also broadened coverage to encompass = more of the traditional business world as many of the Internet companies th= at had graced their covers in recent years have fallen by the wayside.=20 Despite the recent dot-com backlash, Huey said there was still interest in = the type of content San Francisco-based Business 2.0 will offer. Not all th= ose making technology have gone off to ashrams, he joked.=20 "They are trying to figure out how to get back on the horse and get back on= the trail," Huey said.=20 Time Inc. executives acknowledged that the difficult market has caused many= Internet and technology magazines to slim down operations.=20 "We are not denying that this is a rough market, but we are doubling down i= n a rough market," said John Huey, recently appointed editorial director of= Time Inc.=20 The new magazine is much better positioned than either eCompany, which had = been a bi-weekly, or Business 2.0 would have been alone, Huey said.=20 "Now we are up there at the top of the category with one or two other books= ," he added.=20 While Time decided to retain the Business 2.0 name because it was better kn= own in the market, Huey said it chose to make the new magazine a monthly.= =20 "Several (magazines) went bi-weekly to capitalize on the glut of advertisin= g that turned out not to be that long-standing and we didn't want to go the= re," Huey said.=20 Executives said the new magazine has attracted about 85 advertisers, includ= ing Banana Republic, Absolut Vodka and WorldCom. Only 10 of those came from= the original Business 2.0.=20 Fortune President Chris Poleway said the magazine benefits from bundled adv= ertising packages that allow advertisers to buy ad space in all of the publ= ications under Fortune's umbrella.=20 Poleway said the purchase of Business 2.0 has accelerated the timeline for = profitability and expects the company to make money in one to two years.=20 PARENTAL HELP=20 Business 2.0 is also benefiting from its relationship with AOL Time Warner = Inc's Internet unit. About 20 percent of the magazine's 550,000 subscriptio= ns were generated online-of which half came through AOL, the world's larges= t Internet service provider.=20 The magazine, like other titles under the Time umbrella, will also be promo= ted through other AOL Time Warner properties such as cable network HBO and = Fortune magazine. Time publications, including Business 2.0, will also be w= orking closely with 24-hour news network CNN on business programming. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 VENEZUELA: Venezuela OKs Petrotrin stake in offshore oil field. 08/07/2001 Reuters English News Service (C) Reuters Limited 2001. CARACAS, Aug 7 (Reuters) - Venezuela has given the state-owned Petroleum Co= mpany of Trinidad and Tobago, also known as Petrotrin, approval to enter a = joint venture to explore an offshore oil field near the maritime border of = the South American nation with Trinidad.=20 The Official Gazette said Petrotrin would take a 50 percent interest in the= Gulf of Paria East block. That stake previously was held by Enron Corp. , = the No. 1 U.S. natural gas and electricity marketer. No financial details o= f the deal were immediately available. A test well at the block produced 3,000 barrels a day of oil in February. I= ts Venezuelan operator Inelectra had said it would seek a partner with the = financial muscle to help develop the field.=20 It was the third oil find from eight oil blocks awarded in Venezuela's 1996= Third Round exploration licensing, when licenses valued at a total of $800= million were granted.=20 None of the fields has yet produced a commercially viable discovery. Four b= locks will be handed back to state oil company Petroleos de Venezuela, or P= DVSA, at the end of this year after disappointing drilling results.=20 Enron had originally held a 90 percent stake in the Gulf of Paria East fiel= d, with Inelectra holding only 10 percent. The U.S. company reduced its sta= ke last year after disappointing well test results.=20 Inelectra has said it plans to invest $174 million in Venezuela between 200= 1 and 2003, including activites in gas exploration. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 INDIA: S&P downgrade seen hurting Indian markets briefly. 08/07/2001 Reuters English News Service (C) Reuters Limited 2001. BOMBAY, Aug 7 (Reuters) - Standard & Poor's downgrade of India's local curr= ency rating and outlook is bound to adversely hit the currency and stock ma= rkets, but traders said they do not expect any sustained bearishness.=20 S&P on Tuesday lowered India's long-term local currency sovereign credit ra= ting to BBB-minus from BBB. It affirmed its BB long-term and single B short-term foreign currency sover= eign credit and A-3 short-term local currency sovereign credit ratings on t= he country. The outlook for both long-term ratings was revised to negative = from stable.=20 The rating agency said the downgrade reflects unchecked budget deficits and= rising domestic indebtedness.=20 The announcement came after the rupee and stock markets had closed, but cau= sed a sharp fall in government bonds.=20 "There could be a knee-jerk reaction to the move but I don't see the reacti= on being felt for an extended period and the current levels being so low, a= severe fall is unforeseen," said U.R.Bhat, chief investment officer at Jar= dine Fleming India AMC. The Indian stockmarket, battered by a host of scand= als since March, is already one of the worst performers in the region.=20 The benchmark 30-stock Bombay Sensitive index has lost over 16 percent sinc= e the start of the year. The index ended weak on Tuesday, slipping 0.3 perc= ent to 3,319.67 points.=20 The rupee ended Tuesday steady at 47.1125/1200 per dollar, down just one pe= rcent since April.=20 "There is some element of enquiry among corporate clients. People will wait= till tomorrow to take a call on the rupee," said S. Rosha, head of corpora= te treasury sales at HSBC.=20 But most corporates were reluctant to hedge, given the rupee's stability, R= osha said, predicting resistance for the dollar at levels around 47.20.=20 TREND REVERSAL=20 The rupee is convertible only on the current account and the central bank o= ften intervenes through state-run banks to check sharp movements.=20 It has been helped this year by heavy foreign investment, both direct and p= ortfolio, which has boosted foreign currency reserves to record highs.=20 Foreign portfolio inflows in the first half of 2001 totalled more than $2.5= billion compared with $1.56 billion through the whole of 2000.=20 And a reversal in that trend is what worries currency and stock market trad= ers the most.=20 "The move could hit investment in the country, both foreign direct investme= nt and domestic investment," said Ajit Ranade, chief economist at ABN AMRO = Bank.=20 "Local companies planning to raise funds from abroad will definitely feel t= he pinch," he said.=20 K.Ramachandran, head of research at Tata TD Waterhouse, differed. "Portfoli= o investment flows are unlikely to be affected since foreign funds have dif= ferent yardsticks of measuring risk," he said.=20 S&P's downgrade follows the lowering of the country's rating outlook by Fit= ch in June. Fitch cited similar worries.=20 Rival rating agency Moody's Investors Services told Reuters earlier this mo= nth it was not reviewing India's rating or outlook, but expressed concern o= ver slippages in reforms.=20 Moody's currently has a Ba2 rating on India with a positive outlook. The ra= ting is two notches below investment grade.=20 India's credibility with foreign investors is already under a cloud after a= bitter dispute between energy giant Enron Corp and local utility Maharasht= ra State Electricity Board over high tariffs and payment defaults.=20 Analysts say the country's attempt to resolve the Enron dispute is a test c= ase of its ability to attract more foreign investments. The $2.9 billion pr= oject is the largest single direct investment in the country.=20 FISCAL DEFICIT OVERSHOOT=20 Government bonds yields rose nearly 10 basis points after the news, and dea= lers said any weakness in the rupee will further dampen the current liquidi= ty-led rally.=20 Traders have already discounted an overshoot in the federal fiscal deficit,= targeted at 4.7 percent of GDP.=20 S&P said its outlook revision reflects rising concern that public finances = might worsen further in the years to come. It said recent scandals have har= med the government's ability to implement "encouraging" measures announced = in its last budget."=20 The country has been struggling with a sharp slowdown in economic growth. G= DP growth slowed to an estimated 5.2 percent last year (2000/01-April/March= ) from the previous year's 6.4.=20 (additional reporting by Umesh Desai). Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron unit Azurix to sell Argentina ops to Bouygues' Saur - report 08/07/2001 AFX News © 2001 by AFP-Extel News Ltd BUENOS AIRES (AFX) - Enron Corp will sell its Azurix Buenos Aires SA and Ob= ras Sanitarias de Mendoza units to Bouygues unit Saur, financial daily Buen= os Aires Economico reported without naming sources.=20 After completion of the deal, Saur will have some 8 mln clients in the coun= try, the report said. The disposal by Enron of its water operations in the country is part of the= company's wider policy of reducing its operations in Argentina and intensi= fying them in Brazil, BAE said.=20 jmp/jms For more information and to contact AFX: www.afxnews.com and www.af= xpress.com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Ziff Davis SMART BUSINESS Honors the Top 50 U.S. Companies That Are Using t= he Internet to Grow Their Business 08/07/2001 PR Newswire (Copyright © 2001, PR Newswire) Smart Business 50 Stock Index Outperforms the S&P 500 Index and Nasdaq=20 NEW YORK, Aug. 7 /PRNewswire/ -- Ziff Davis SMART BUSINESS, the magazine fo= r senior managers using technology and business services to grow their comp= anies, announced today its second annual Smart Business 50. The Smart Busin= ess 50 honors the top 50 U.S. companies that have done the best job of usin= g the Internet to enhance and expand their existing business. The Smart Bus= iness 50 appears in the September 2001 issue of Ziff Davis SMART BUSINESS, = which is on newsstands August 14 and online now at http://www.smartbusiness= mag.com. (Photo: http://www.newscom.com/cgi-bin/prnh/20010807/NYTU055 )=20 The Smart Business 50 includes public and private companies, government age= ncies, and other organizations that existed before the commercialization of= the World Wide Web. In forming the list, the editors of Ziff Davis SMART B= USINESS considered the Internet's contribution to companies in such areas a= s sales growth and profitability, cost savings, expansion into new business= areas, effectiveness in heading off competitors, faster delivery of produc= ts, improved market share and brand recognition, as well as boosting of cus= tomer and employee satisfaction.=20 "We looked at how the companies are using the Internet to do business with = suppliers, customers, and partners -- and within their own walls," said Wen= dy Taylor, editor of Ziff Davis SMART BUSINESS. "We learned enough about wh= at works for online business in 2001 that we've highlighted 10 of the compa= ny stories as lessons."=20 The list includes some of the world's leading companies and organizations: = Army & Air Force Exchange Service, Avon, Barnes & Noble, Boeing, Burlington= Northern Santa Fe, CVS, Costco, Dell, Dow Jones, Enron, FedEx, General Ele= ctric, IBM, Intel, Hewlett-Packard, Kmart, Kaplan, Lands' End, Major League= Baseball, Neiman Marcus, Office Depot, Spiegel, Staples, UPS, and the U.S.= Mint.=20 The Smart Business 50 rankings have also proven to be an industry benchmark= on financial performance. A Ziff Davis SMART BUSINESS stock index that inc= ludes the public companies from last year's Smart Business 50 has not only = outperformed all other Internet company stock indices, but has also outperf= ormed the Standard & Poor's 500 index, which serves as the benchmark for th= e overall stock market.=20 About the Smart Business 50=20 The Smart Business 50 is an annual ranking of the U.S. companies that have = done the best job of incorporating the Internet into their business.=20 About Ziff Davis SMART BUSINESS=20 Ziff Davis SMART BUSINESS is an award-winning magazine that delivers inform= ation to senior business managers who understand that integrating technolog= y into core business functions is key to growth. The monthly publication pr= esents in-depth case studies and return-on-investment analysis on the topic= s of technology and business services. It provides more than 800,000 paid s= ubscribers with a hands-on road map to drive business objectives with techn= ology solutions.=20 About Ziff Davis Media Inc.=20 Ziff Davis Media Inc. (http://www.ziffdavis.com) is the leading information= authority for buying, using and experiencing technology and the Internet. = It is the largest technology and Internet magazine publisher and the sixth = largest magazine publisher in the United States. The company is also at the= forefront in creating a new generation of business and consumer media that= educate, entertain and empower people. In the U.S., Ziff Davis Media publi= shes 13 industry-leading business and consumer publications: PC Magazine, Z= iff Davis SMART BUSINESS, eWEEK, Interactive Week, Smart Partner, The Net E= conomy, CIO Insight, Yahoo! Internet Life, Expedia Travels, Electronic Gami= ng Monthly, Official U.S. PlayStation Magazine, Computer Gaming World and E= xpert Gamer. Through a joint venture with International Data Group (IDG), t= he company also publishes Macworld. Other Ziff Davis Media business units i= nclude Ziff Davis Internet, a developer of innovative web and other interac= tive media including ExtremeTech (http://www.extremetech.com) and PCMag.com= ; Ziff Davis Custom Media, which provides custom and contract media solutio= ns within the technology industry; and eTesting Labs, which provides state-= of-the-art internet and technology testing. The company also produces resea= rch, conferences, seminars and Webcasts.=20 MAKE YOUR OPINION COUNT - Click Here=20 http://tbutton.prnewswire.com/prn/11690X86561232 /CONTACT: Randy Zane, +1-212-503-3535, randy_zane@ziffdavis.com; or Amy Ker= rigan, +1-212-503-3534, amy_kerrigan@ziffdavis.com, both of Ziff Davis Medi= a Inc./ 10:01 EDT=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 PGE Joins Other Western Utilities to Oppose FERC Actions 08/07/2001 Business Wire (Copyright © 2001, Business Wire) PORTLAND, Ore.--(BUSINESS WIRE)--Aug. 7, 2001--Portland General Electric (P= GE) has joined together with other Western utilities to protest recent acti= ons by the Federal Energy Regulatory Commission (FERC) to create price cont= rols on wholesale power sales in the West.=20 FERC orders issued June 19 and July 25 attempt to stabilize the Western ene= rgy marketplace. This coalition of utilities has concluded, however, that F= ERC's actions will have unintended, yet harmful consequences for Western ut= ilities and consumers. Left unchanged, FERC's order may create higher price= s for some utilities' retail customers and could result in power supply sho= rtages in many areas of the West. "We believe FERC has changed the rules in the middle of the game," said Pam= ela Lesh, vice president of Public Policy and Regulatory Affairs at PGE. "F= ERC did not create a proper transition plan for those market participants w= ho took prudent steps to plan ahead in accordance with the old rules."=20 PGE believes the impacts from FERC's recent actions, which may prove harmfu= l to Northwest consumers and utilities, can be minimized or reversed if the= federal agency takes several corrective measures, including:=20 -- FERC should base a price mitigation plan on prices in all=20 affected states, not just California(a). While PGE does not=20 support price caps in general, at the very least, the company=20 believes FERC should set the cap on the highest cost=20 generator, and highest cost fuel, in the 11 Western states.=20 Another option would be to establish a proxy of $150 per=20 megawatt-hour.=20 -- All market sellers, whether generators, utilities, or=20 marketers, should be allowed to justify their bids based on=20 their costs. Currently, it's a one-price-fits-all formula that=20 doesn't account for costs due to certain circumstances, except=20 for generators.=20 -- FERC should exempt demand reduction programs from the price=20 mitigation cap. These programs compensate businesses for=20 reducing usage during times of high prices. PGE created an=20 industry-leading program to reduce demand, but price caps=20 create uncertainty for the future of this effort.=20 -- Out-of-state sellers should receive transmission costs and=20 losses on top of the capped price. Whenever an entity=20 transmits power over a long distance, a certain percentage of=20 power is lost to the transmission process. Additionally, as=20 that power crosses the jurisdictions of other utilities, there=20 is a fee, or toll, charged for the usage of those lines.=20 FERC's existing methodology does not account for these fees=20 and losses.=20 The utilities that have joined together in this coalition include PGE in Or= egon, Puget Sound Energy in the state of Washington, and Nevada's Sierra Pa= cific Resources. The coalition members are committed to working with their = respective Congressional delegations, governors, other state leaders, and p= ublic utility commissions, to assist FERC in developing solutions that are = both more fair and more likely to achieve reliable power supplies this comi= ng year.=20 Portland General Electric (PGE) is a wholly-owned subsidiary of Enron Corp.= , one of the world's leading integrated electricity and natural gas compani= es. PGE is the single largest distributor of Oregon's electrical energy nee= ds in one of the fastest growing economies in the nation. As a fully integr= ated utility, PGE serves more than 730,000 residential, commercial and indu= strial customers in northwest Oregon. PGE's Internet address is www.portlan= dgeneral.com.=20 (a) Through the price mitigation order, wholesale prices are now geared to = the cost of power production in California. Specifically, the cap is based = on the highest-cost natural gas-fired plant in the state, whose power is ne= eded when reserves fall below seven percent and trigger a "Stage 1" supply = emergency. When reserves return above seven percent, the price cap is set a= t 85 percent of the highest hourly price set during the most recent Stage 1= emergency. CONTACT: PGE Scott Simms, 503/464-7342 or Kregg Arntson, 503/464-7695=20 10:00 EDT AUGUST 7, 2001=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Four Utilities Seek Changes to California Price Caps (Update1) 2001-08-07 16:20 (New York) Four Utilities Seek Changes to California Price Caps (Update1) (Closes stock prices in last paragraph.) Portland, Oregon, Aug. 7 (Bloomberg) -- Enron Corp., Puget Energy Inc. and Sierra Pacific Resources, owners of four utilities that sell power to California, want U.S. regulators to restructure price caps placed on the state's electricity market. The rules set by the Federal Energy Regulatory Commission in May often require the utilities to sell their excess electricity at a loss, the companies said in statements. FERC set prices based on costs of the most expensive generators in California, and in June broadened rules to include 10 other Western states. Enron's Portland General Electric, Puget Sound Energy, Nevada Power and Sierra Pacific Power want FERC to change the rules so that the price-setting formula includes costs of all sellers, not just generators in California. ``Now, Californians can obtain power at the last minute at an artificially low price while states that have had the foresight to purchase more secure, longer-term power are left with higher bills,'' Walt Higgins, chairman, president and chief executive officer of Sierra Pacific Resources, said in a statement. The utilities say they sometimes sell at a loss to California because the price they pay for power is higher than the cost of the most expensive power plant in the state. ``The price controls were designed to help California and we're now seeing that that's going to cost neighboring states,'' said Grant Ringel, Puget Sound spokesman. Oregon needs new power plants to meet rising demand and has lost 1,300 megawatts of planned power plants since June because of developer concerns about price caps, Ringel said. One megawatt is enough to light 750 to 1000 average U.S. homes. California officials had demanded the price caps after the state's two largest utilities, PG&E Corp.'s Pacific Gas & Electric and Edison International's Southern California Edison, racked up more than $14 billion in power-buying losses. The coalition of western utilities hopes to bring others on board to help foster federal rules that account for differences in each of the states, Ringel said. Houston-based Enron's shares fell 90 cents to $43.60. Bellevue, Washington-based Puget Energy rose 32 cents to $24.17, and Reno, Nevada-based Sierra Pacific fell 44 cents to $15.07. American Water to Pay $150 Mln for Enron Water Unit (Update2) 2001-08-07 16:37 (New York) American Water to Pay $150 Mln for Enron Water Unit (Update2) (Updates with closing share prices.) Voorhees, New Jersey, Aug. 7 (Bloomberg) -- American Water Works Inc., the largest publicly traded U.S. water utility, agreed to pay $149.8 million for Azurix North America, a unit of No. 1 energy trader Enron Corp. The price includes $141.5 million in cash and $8.3 million in debt, American Water said in a filing with the U.S. Securities and Exchange Commission. The company, which announced the purchase yesterday, will finance the acquisition with debt, spokesman Jim Harrison said. The transaction will probably close within 90 days, he said. French news agency Agence France Presse reported that Enron also is negotiating to sell Azurix's Argentine assets to French industrial group Bouygues SA. Enron spokesman John Ambler called the report ``speculation,'' but said Enron will sell more Azurix assets. ``We're having ongoing asset sales over a period of time,'' Ambler said. American Water's acquisition will help it expand in the southeastern and northwestern U.S. and in three Canadian provinces, and will boost earnings per share in its first full year, the company said. Enron, which controls two-thirds of Azurix Corp., of which Azurix North America is a unit, took Azurix private in March for $327.5 million. The move, 21 months after the affiliate sold shares to the public, was made when it became clear Azurix was having trouble with its strategy of buying up water companies and winning large water projects. Azurix provides water and wastewater services, including operations and maintenance, engineering and other services. The North American unit has annual revenue of about $157 million and serves about 2 million people. American Water Works, based in Voorhees, New Jersey, serves about 10 million people in the U.S. Its shares rose 54 cents to $32.95. Enron fell 90 cents to $43.60. NewPower Sees 2001 Sales Below Forecast, Stock Falls (Update5) 2001-08-07 16:07 (New York) NewPower Sees 2001 Sales Below Forecast, Stock Falls (Update5) (Updates with closing share values in first, second and last paragraphs.) Purchase, New York, Aug. 7 (Bloomberg) -- Shares of NewPower Holdings Inc. fell 31 percent after the venture, formed by Enron Corp. to compete with traditional gas and electric utilities, said revenue this year will be lower than projected. Shares of NewPower fell $2.27 to $5.08 on trading of 1.22 million shares, more than six times the three-month daily average. The decline was the third-biggest among U.S. stocks. The stock has fallen 76 percent since debuting in October. Revenue in 2001 will be $420 million to $440 million, down from $530 million to $540 million forecast previously, Chief Executive Eugene Lockhart said. Revenue this quarter probably will be $60 million to $65 million. The company expects to have 1 million customers by the end of the year, below the 1.2 million projected previously. Revenue fell partly because of delays in Texas's plan to open its electricity market to competition. Milder-than-expected weather and a higher power-grid fee in the market encompassing Pennsylvania, New Jersey and Maryland also hurt business, Lockhart said on a conference call with analysts and investors. The Purchase, New York-based company was formed in late 1999 to sell power and natural gas to homes and small businesses in deregulated markets. NewPower plans to trim costs by marketing directly to possible customers in states such as Texas, Virginia and Massachusetts, instead of paying to purchase groups of customers from other companies, Lockhart said. NewPower doesn't plan to cut its workforce to reduce costs, spokeswoman Gael Doar said. New Power had a second-quarter loss of $55.6 million, or 96 cents a share. Revenue was $64.6 million, less than the $70 million to $75 million the company had expected. Shares of Houston-based Enron, the biggest energy trader, fell 90 cents to $43.60. They have fallen 48 percent this year.
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