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Enron Mail |
Senate asked to hold Reliant in contempt over document release
Associated Press Newswires, 07/18/01 Calif. Senate Panel Votes To Cite Reliant With Contempt Dow Jones Energy Service, 07/18/01 USA: UPDATE 1-Sempra looks to natgas lines to carry optic fiber. Reuters English News Service, 07/18/01 US GAO Demands Cheney Provide Data On Energy Meetings Dow Jones International News, 07/18/01 Investigative arm of Congress issues demand letter for energy meetings Associated Press Newswires, 07/18/01 Enron's Azurix blocks construction of Argentina-Uruguay gas pipeline - report AFX News, 07/18/01 Fitch Rts Marlin Water Trust II Sr Secured Notes Due 2003, `BBB' Business Wire, 07/18/01 Senate asked to hold Reliant in contempt over document release By DON THOMPSON Associated Press Writer 07/18/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. SACRAMENTO (AP) - A Senate committee investigating possible price gouging in California's energy market voted unanimously Wednesday to ask the full Senate to find Houston-based Reliant Energy in contempt for failing to comply with a subpoena for documents. The decision came despite Reliant's last-ditch offer to turn over 10,000 documents under a contingent confidentiality agreement that the Senate Select Committee to Investigate Market Manipulation rejected. "I'm not just trying to buy time," said Reliant attorney Charles J. Stevens. "We believe we have acted cooperatively. We believe we have a good-faith legal dispute." "It's clear you're trying to work with us. It's not contempt with contempt," agreed committee Chair Joseph Dunn, D-Santa Ana. By contrast, Sen. Steve Peace, D-Chula Vista, blasted Reliant's "shoddy behavior" before backing what he termed "a legally unprecedented step." If the full Senate imposes sanctions against Reliant, it will be the first time since 1929, when the Senate voted to jail reluctant witnesses during a committee investigation of price fixing and price gouging allegations involving cement sales to the state. There are no set penalties, said committee special counsel Laurence Drivon. By law, "the Senate can take such action as it deems necessary and appropriate." The contempt citation will be presented to the Senate Thursday, but will immediately be sent to the Rules Committee for another hearing before the full Senate acts, Dunn said. He said the committee had no choice but to seek the sanctions and likely force a court battle after it was unable to reach agreement with Reliant over the confidentiality of its documents. The committee voted 6-0 in favor of the contempt finding. "If we reach agreement on these issues, the process would be terminated immediately," Dunn said. In that light, the committee stepped back from its contempt vote last week against Enron Corp. after the company and committee moved closer to agreement over its release of thousands of documents stored in Texas. Enron sued the committee last week to stop the subpoena of its financial and electricity trading records. Among its objections are that only the Federal Energy Regulatory Commission has the authority to investigate wholesale markets. Reliant, like Enron, had argued the company's financial papers are outside the committee's jurisdiction because most of its operations and paperwork are outside California. Atlanta-based Mirant Inc. also at least temporarily avoided a contempt citation by agreeing to turn over subpoenaed documents. The committee will review both companies' compliance in 30 days. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Calif. Senate Panel Votes To Cite Reliant With Contempt 07/18/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) LOS ANGELES -(Dow Jones)- A California Senate committee Wednesday voted to cite Reliant Energy (REI) with contempt because the company has refused to provide documents for an investigation into wholesale electricity prices in the state, said committee Chairman Joe Dunn, D-Santa Ana. The committee also voted to forward a contempt charge for Enron Corp (ENE) to the full Senate, where it will be voted on. If the charge is approved, the Senate will vote on punishment, which could include hefty fines or incarceration of executives. Talks between Enron and committee attorneys Monday seemed to indicate the company would agree to committee demands, but since then it has become clear the company doesn't plan to comply, Dunn said. "If you had asked two days ago I'd have said we are cautiously optimistic about Enron. Now I'm pessimistic about it. We felt they were indicating to us a willingness to do what the other generators were willing to do, but the bottom line is that they are not, despite their cooperative-sounding words. We are no closer to them coming into compliance than we were a week ago," Dunn said. The Senate Select Committee to Investigate Market Manipulation is requesting that Reliant and Enron provide 16 kinds of documents related to market behavior, rent a depository for the documents, and sign the committee's version of a confidentiality agreement. Both generators have refused to meet those demands, Dunn said. The committee will drop its contempt charges at any time before a full Senate vote if either generator agrees to its requests. A report detailing Enron's contempt charge will be sent to the full Senate on Thursday for introduction, but is expected to be referred to the Senate Rules Committee for review before a floor vote. Dunn said he didn't know how long the report would be considered in the Rules Committee, but he will "certainly push them to do it as soon as possible." Enron spokesman Mark Palmer said the company "will continue to negotiate" with the committee. Legislators are scheduled to begin a monthlong break Friday, but aren't certain that will happen because they still need to pass a budget bill and are trying to approve a bill to rescue Edison International (EIX) unit Southern California Edison before leaving. Dunn said it would take a few days to prepare a report on Reliant's contempt charge. "We may not be able to forward that report to the Senate floor until the day we get back from recess," Dunn said. No one at Reliant could be immediately reached for comment. The committee originally was poised to cite seven other electricity generators for contempt, but all eventually agreed to provide the requested information. -By Jessica Berthold, Dow Jones Newswires; 310-962-2843; jessica.berthold@dowjones.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: UPDATE 1-Sempra looks to natgas lines to carry optic fiber. 07/18/2001 Reuters English News Service (C) Reuters Limited 2001. SAN DIEGO, July 18 (Reuters) - A Sempra Energy unit said on Wednesday it has developed technology to connect thousands of miles of underused high-speed fiber-optic cable to buildings across the U.S. by inserting the cable directly into existing natural gas pipelines. Sempra said using its utility's gas lines - which hook up to buildings in cities throughout central and southern California - could tackle the telecommunications industry's "last mile" problem connecting end users to outlying fiber-optic cable networks without tearing up city streets. The surge in demand for high-speed Internet access has led telecommunications companies to pour billions of dollars into vast nationwide fiber-optic systems that carry data to computers, phones and screens faster than traditional copper wires. "Demand for broadband service in metropolitan areas is greater than ever," said Donald Felsinger, group president of Sempra Energy. "The most significant obstacle to meeting that demand is the laying of fiber-optic cable under city streets - traditionally a slow, costly and disruptive process," he said. Sempra Communications' new technology encases fiber-optic cable in a protective polyethylene conduit before inserting it through the same pipelines that carry gas to utility customers, saving time and leaving neighborhood streets intact. Sempra said companies that use the technology could see savings up to 30 percent on last mile costs compared to traditional methods of using older technologies and digging up streets, said Jennifer Andrews, a spokeswoman at Sempra Fiber Links, a new unit set up to market the technology. Andrews said the company had already met with 15 gas utilities and five telecommunications companies interested in the technology. She said Sempra's Southern California Gas Co (SCG) had already applied to the California Public Utilities Commission for approval to use the fiber-optic technology in its lines. SCG is one of the largest gas distribution companies in the United States, serving around 18 million customers in Central and Southern California. In a statement, Sempra Communications said installing the cable does not inhibit a gas utility from performing any duties necessary to protect public safety. Andrews said Sempra filed around two months ago for patents on its fiber-optic technology with the U.S. Patent Office and Trademark Office and the European Commission, the executive arm of the European Union. Energy companies that have ventured into the fiber-optic business by building infrastructure and/or through bandwidth trade, include Williams Cos., El Paso Corp.., Enron Corp. ENE.N, Dynegy Inc., Duke Energy, Consolidated Edison Inc. and Montana Power Co. In March 2000, Montana Power announced plans to divest its energy business and invest the proceeds into its broadband and telecommunications unit Touch America. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. US GAO Demands Cheney Provide Data On Energy Meetings 07/18/2001 Dow Jones International News (Copyright © 2001, Dow Jones & Company, Inc.) WASHINGTON (AP)--The investigative arm of Congress demanded Wednesday that Vice President Dick Cheney identify all the industry leaders who helped formulate the Bush administration's energy policy. Refusal could lead to a court fight. The White House, which is reviewing the request, said it would work with the General Accounting Office to resolve the issue. The GAO letter follows repeated refusals by the vice president's office to provide names and titles of participants who met with the energy task force chaired by Cheney. Under the law, the GAO could sue if the Bush administration fails to supply the data within 20 days. This is the first demand letter ever issued by the GAO to a vice president, said Democratic Reps. John Dingell and Henry Waxman, who directed the agency to review the task force's work nearly three months ago. The vice president's lawyer has told the GAO there were nine meetings of the task force and that staffers also met with many people to gather information. The result was an energy policy, announced May 17, that is aimed at increasing the nation's supply of energy. It includes expanded oil and gas drilling on public land and a rejuvenated nuclear power system. White House spokeswoman Anne Womack said the letter is under review and "we will continue to work with the GAO to resolve this issue." The vice president's office "has continued on its course of secrecy and obstinance," Dingell said in a statement. "The White House should simply try telling the truth...and stop hiding information that Congress and the public have a right to see," said Waxman. The White House's position is that the GAO is entitled to information on the task force's costs, but that the congressional watchdog agency doesn't have authority to ask for lists of those with whom the task force met. Waxman is also pressing for a Justice Department investigation of Karl Rove over the Bush political strategist's energy-related meetings. The White House has acknowledged that Rove participated in meetings on the administration's energy policy while he owned stock in energy companies such as Texas-based Enron Corp. The White House has supplied no details on Rove's meetings. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Investigative arm of Congress issues demand letter for energy meetings By PETE YOST Associated Press Writer 07/18/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. WASHINGTON (AP) - The investigative arm of Congress demanded Wednesday that Vice President Dick Cheney identify all the industry leaders who helped formulate the Bush administration's energy policy. Refusal could lead to a court fight. The White House, which is reviewing the request, said it would work with the General Accounting Office to resolve the issue. The GAO letter follows repeated refusals by the vice president's office to provide names and titles of participants who met with the energy task force chaired by Cheney. Under the law, the GAO could sue if the Bush administration fails to supply the data within 20 days. This is the first demand letter ever issued by the GAO to the vice president of the United States, said Democratic Reps. John Dingell of Michigan and Henry Waxman of California, who directed the agency to review the task force's work nearly three months ago. The vice president's lawyer has told the GAO there were nine meetings of the task force and that staffers also met with many people to gather information. The result was an energy policy, announced May 17, that is aimed at increasing the nation's supply of energy. It includes expanded oil and gas drilling on public land and a rejuvenated nuclear power system. White House spokeswoman Anne Womack said the letter is under review and "we will continue to work with the GAO to resolve this issue." The vice president's office "has continued on its course of secrecy and obstinance," Dingell said in a statement. "The White House should simply try telling the truth ... and stop hiding information that Congress and the public have a right to see," said Waxman. The White House's position is that the GAO is entitled to information on the task force's costs, but that the congressional watchdog agency doesn't have authority to ask for lists of those with whom the task force met. Waxman is also pressing for a Justice Department investigation of Karl Rove over the Bush political strategist's energy-related meetings. The White House has acknowledged that Rove participated in meetings on the administration's energy policy while he owned stock in energy companies such as Texas-based Enron Corp. The White House has supplied no details on Rove's meetings. --- On the Net: GAO: http://www.gao.gov Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron's Azurix blocks construction of Argentina-Uruguay gas pipeline - report 07/18/2001 AFX News © 2001 by AFP-Extel News Ltd LA PLATA, Argentina (AFX) - Enron Corp water and sewage unit Azurix Buenos Aires SA has obtained a restraining order against the construction of the Cruz del Sur pipeline under the River Plate from Argentina to Uruguay, the daily El Dia reported. Works were paralyzed BG Group PLC, BP Amoco PLC and Bridas Corp joint venture Pan American Energy LLC, BASF AG's Wintershall and Enron Corp and Perez Companc SA's Transportadora Gas del Sur venture Gasoducto Cruz del Sur SA from Punta Lara in Argentina to Colonia, Uruguay, it said. "Dredging operations carried out in the coastal area (near the Punta Lara potabilization plant), could have caused an alteration in the continuity and quality of water service," said Buenos Aires provincial enviromental policy department. Gasoducto Cruz del Sur has not met the conditions required to complete the pipeline, and this "could place the potability of water at risk," court sources told El Dia. Azurix holds the Buenos Aires provincial water and sewage concession. lac/gc For more information and to contact AFX: www.afxnews.com and www.afxpress.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Fitch Rts Marlin Water Trust II Sr Secured Notes Due 2003, `BBB' 07/18/2001 Business Wire (Copyright © 2001, Business Wire) NEW YORK--(BUSINESS WIRE)--July 18, 2001--Fitch has assigned a 'BBB' rating to Marlin Water Trust II and the Marlin Water Trust II Co-Issuer's (Marlin II) $475 million issuance of 6.31% senior secured notes due 2003, and $515 million 6.19% senior secured notes due 2003. The notes are issued domestically pursuant to SEC Rule 144A and outside the U.S. under Regulation S. At closing net proceeds from the issuance will temporarily be invested in two short-term Enron Corp. (Enron) notes. Ultimately the proceeds from the repayment of the Enron notes will be used to redeem the outstanding $830 million 7.09% senior secured notes due 2001 of Marlin Water Trust (Marlin) and pay interest on the senior notes and yield on the Marlin trust certificates. The support for the rating comes from an overfund account (pre-funded interest) and equity commitment from Enron in the form of mandatorily convertible preferred stock. The overfund account will be invested in Enron debt securities (rated 'BBB+', Rating Outlook Stable), with payments used to service interest to noteholders. Fitch considers the cash flow stream to repay interest representative of a 'BBB+' credit profile. Payment of principal ultimately relies on Enron's obligation to remarket mandatorily convertible preferred securities. Fitch currently rates Enron's preferred securities 'BBB-'. Enron established Marlin to facilitate off-balance sheet financing of the acquisition of Wessex Water Plc (Wessex). Azurix, an indirect wholly owned subsidiary of Enron, acquired Wessex in October 1998 for $2.4 billion through its direct subsidiary Azurix Europe Limited (AEL). Through a series of transactions, Enron contributed its ownership interest in Azurix to Atlantic Water Trust (AWT) in exchange for a 50% ownership interest in AWT. At the same time, Marlin acquired a 50% ownership interest in AWT with proceeds from the original Marlin issuance of senior notes ($1.15 billion) and trust certificates ($125 million). AWT applied the Marlin notes and certificates proceeds to repay a $900 million acquisition bridge loan and to establish a $249 million overfund account invested in Enron senior unsecured debt to pay note interest and certificate yield. In addition, Enron contributed to AWT its rights under a $125 million loan to AEL (rated `BBB+'). Both the AEL note and the Enron debt securities are held at Bristol Water Trust (Bristol) for the benefit of Marlin investors. In June 1999, Azurix completed an initial public offering of 33% of the company, proceeds of which were used to partially redeem the Marlin senior notes. In a shift in strategy in March 2001, Enron repurchased the Azurix shares held by the public. The Marlin II transaction represents a refinancing of the remaining Marlin senior notes. While various sources of repayment for the Marlin II notes are available, such as sale or liquidation of the AWT assets, an equity offering, or repayment of the AEL note, primary credit support is derived from the Enron obligation to remarket mandatorily convertible preferred stock. If an amount sufficient to repay the notes has not been deposited with the trustee 120 days prior to the maturity date or upon a Note Trigger Event, the indenture trustee will direct the share trust to sell the Enron preferred stock on terms that are designed to generate an amount sufficient to redeem the notes in full. In the event that the issuance of the preferred stock yields less than the amount required to redeem the senior notes, Enron is required to deliver additional shares. If Enron cannot or does not deliver on this obligation, then the amount of the deficiency becomes a payment obligation of Enron, representing a general unsecured claim. Trigger events include: an event of default on the Marlin II notes occurs and notes are accelerated; 120 days prior to maturity if the repayment amount of the senior notes has not been deposited with the indenture trustee as a result of the sale of Enron equity or other equity (which may include the mandatorily convertible preferred stock); or, downgrade of Enron's senior unsecured debt below investment grade by Fitch, S&P or Moody's in conjunction with a decline in Enron's closing stock price to below $34.13 over three consecutive trading days. The Marlin transactions provide Enron with an efficient vehicle to monetize its investment in Wessex and effectively accelerate the process for capital redeployment. Fitch does not expect the success or failure of AWT asset sales to materially impact Enron's consolidated credit quality. Currently, Enron's obligation under this transaction represents a small portion of Enron's asset portfolio. Enron's core operations demonstrate strong competitive market positions and provide stable earnings and cash flow contributions. Most consolidated credit measures are expected to moderately strengthen in 2001. The company's strategy to increase its return on capital employed and become more flexible and less asset intensive is reflected in the planned sales of a significant portion of its global generation assets. CONTACT: Fitch, New York Ralph Pellecchia, 212/908-0586 or Donna DiDonato, 212/908-0637 11:22 EDT JULY 18, 2001 Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.
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