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Enron Mail |
Electricity Cost Data Spread the Blame Power: Many suppliers charged more
than the firms that Davis has pilloried, records show. Los Angeles Times, 07/10/01 Duke Energy Asked to Allow Release of Data Power: Senator says the generator is refusing to make public some information crucial to the price-gouging probe. Firm says it's complying. Los Angeles Times, 07/10/01 California to get plan for refunds Houston Chronicle, 07/10/01 INDIA: CEO of Enron's Indian unit Dabhol quits. Reuters English News Service, 07/10/01 US Enron Chmn Confirms India Dabhol Pwr CEO's Resignation Dow Jones Energy Service, 07/10/01 Enron's Kenneth Lay on its $3 Bln Indian Power Project: Comment Bloomberg, 07/10/01 MORE WORK NEEDED TO REVIVE INDIA'S DABHOL PROJECT: ENRON CHIEF Asia Pulse, 07/10/01 Tropic Networks reveals investors: $60-million financing National Post, 07/10/01 India: New engg consultant for Enron project likely Business Line (The Hindu), 07/10/01 India: Centre firm on Dabhol Business Line (The Hindu), 07/10/01 Enron has no immediate plan to quit India, says Lay Business Standard, 07/10/01 Enron seeks CII's help on Dabhol Business Standard, 07/10/01 Enron takes some heat, but rates a `buy' Chicago Tribune, 07/10/01 Power Producers' 2Q Bolstered By April, May Prices Dow Jones News Service, 07/09/01 Enron's Kenneth Lay on India's Dabhol Power Project: Comment Bloomberg, 07/09/01 Prosecutors to Get Reliant, Mirant, Dynegy Documents (Update1) Bloomberg, 07/09/01 California; Metro Desk Electricity Cost Data Spread the Blame Power: Many suppliers charged more than the firms that Davis has pilloried, records show. RICH CONNELL; ROBERT J. LOPEZ; DOUG SMITH TIMES STAFF WRITERS 07/10/2001 Los Angeles Times Home Edition B-1 Copyright 2001 / The Times Mirror Company SACRAMENTO -- California's energy meltdown involves a far more diverse group of wholesale electricity merchants than suggested by Gov. Gray Davis, who has aggressively blamed a handful of Texas companies, state records show. During the first three months of this year--one of the worst stretches of power shortages during the crisis--an assortment of public and private entities charged the state prices averaging well above some of those paid to Texas firms, according to documents released to The Times on Monday by the Department of Water Resources, which now buys power for California. Among those setting and collecting some of the highest average prices per megawatt-hour were a Canadian public utility, a subsidiary of San Diego Gas & Electric's parent company, and the Los Angeles Department of Water and Power, the report shows. Their average prices ranged from $498 a megawatt-hour charged by Powerex, the trading arm of British Columbia's BC Hydro, to $292 an hour by the DWP. In fact, some of the biggest private power companies singled out for criticism by Davis and other state officials--Dynegy Inc., Duke Energy and Mirant--charged less than the average prices the state paid for the period. Those companies' average prices ranged from $146 to $240 per megawatt-hour, according to an analysis of the documents. The figures cover the various types of spot and longer-term power purchased by the state during three months that included rolling blackouts and more than a month of razor-thin reserves, leading to continuous power emergencies. Davis spokesman Steve Maviglio said the governor has directed his sharpest barbs at private out-of-state generators because, in general, they have reaped the highest profits over the longest period. "You have to look at the whole picture," Maviglio said. "The governor was expressing his displeasure with the arrogance of the generators who wear cowboy hats," he said. "Their profits were 100% to 400% above last year. . . . Just because there are other entities who are charging us more [per megawatt-hour] doesn't change the fact that we are getting ripped off by companies from Houston, Tulsa, Atlanta or Charlotte." The report by the Department of Water Resources was provided to The Times on the same day the state released 1,700 pages of documents on California's electricity purchases on the volatile spot market for the year's first quarter. The records detail how the state spent nearly $8 billion buying power in the first five months of the year, and underscore the complexity of the state's energy problem. They also show that patterns of high prices are not limited to a few generators. Oscar Hidalgo, a spokesman for the water resources agency, said that the reports together show that prices were extremely volatile early in the year. "All the prices were high," he said, noting the downward trend in costs since his agency began buying power in mid-January. The average price per megawatt-hour for all state purchases went from $316 in January to $243 in May. Spot prices fell from an average of $321 per hour to $271, the reports show. In the first quarter of the year, some public entities' prices far exceeded those of the biggest private companies. For example, Houston-based Enron, one of the nation's biggest power traders, charged an average of $181 per megawatt-hour. And Atlanta-based Mirant, which sold the most to the state, a total of $706 million, charged an average of $225 per megawatt-hour. By contrast, a Calgary, Canada, firm, TransAlta Energy, averaged $335 a megawatt-hour, and the Sacramento Municipal Utility District had average charges of $330 per megawatt-hour. A spokesman for Enron, Mark Palmer, said recently that the "vilification of Enron was based on politics, not facts." Spokesmen for BC Hydro could not be reached late Monday to comment on its huge sales to the state. In the past, the utility has defended its pricing practices, saying it has offered last-minute hydroelectric power that helped keep California's lights on. A spokeswoman for Sempra, the parent company of San Diego Gas & Electric, said late Monday the company was unable to comment because it had yet to see the figures released by the state. Officials at DWP, who could not be reached Monday evening, have defended their pricing, saying the costs of producing the power needed by the state were extremely high. More Power Bought Than Projected Hidalgo, of the Department of Water Resources, said his agency's efforts, coupled with conservation by business and consumers and falling natural gas prices, have begun to tame the state's market. Still, the state had to purchase $321 million in power in April and May, about 10% more than Davis' analysts had projected. Hidlago said that was because of hot weather in May and other supply problems in April. He said reports will show that power purchases fell short of state projections in June and early July. The reports also will show that prices paid by the state were down in June and July, partly because spot prices have fallen sharply, often to well under $100 a megawatt-hour. A summary Department of Water Resources report released Monday credited Davis' program of nurturing new power generation and establishing long-term power contracts with with "moving the California electric energy industry closer to normalcy." Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. California; Metro Desk Duke Energy Asked to Allow Release of Data Power: Senator says the generator is refusing to make public some information crucial to the price-gouging probe. Firm says it's complying. CARL INGRAM TIMES STAFF WRITER 07/10/2001 Los Angeles Times Home Edition B-8 Copyright 2001 / The Times Mirror Company SACRAMENTO -- The chairman of a Senate committee probing suspected price gouging during the California energy crisis charged Monday that Duke Energy is refusing to allow him to make public information key to his investigation. Sen. Joe Dunn (D-Santa Ana) said Duke has made the price bidding information from its Chula Vista plant available to committee members and staffers. But under a federal confidentiality rule, the data cannot be made public without Duke's consent. The documents concern the Chula Vista plant, which former employees have alleged was ramped up and down to drive up power prices during three days in January. However, state records show that the agency overseeing the electricity grid ordered those gyrations to keep the power flowing throughout the state. Dunn said Duke's refusal thwarts the committee's investigation and efforts to enact possible remedial legislation because the confidential information cannot be shared with others in the Legislature or the public. Dunn said Duke cited a rule of the Federal Energy Regulatory Commission that gives the company the authority to decide which records it makes public and which stay secret. "The only one who can release the data is Duke. We agreed to be bound by what is provided in the FERC tariff, nothing more or less," he said. Former Employees Tell of Maneuvers Dunn noted that the committee is considering trying to obtain the information elsewhere and "release it over Duke's objections." Three former workers at the Duke plant near Chula Vista testified last month under oath that the plant, among other things, was ramped up and down in what seemed to be an effort to maximize revenue during the Jan. 16-18 emergency. But Duke countered immediately that it had merely obeyed orders of the California Independent System Operator, which keeps the state's electricity grid in balance. Duke later provided Cal-ISO documents backing up its explanation. Duke executives insisted that the former employees failed to provide a full picture of the plant's operation during the three days. But Dunn, chairman of the select Senate committee on alleged price gouging, said Monday that by refusing to authorize release of all the subpoenaed data, Duke was guilty of the same tactics. "Duke is trying to draw the impression that it has [provided] the full picture. But they are fully aware that we cannot draw any final conclusions until all that data has been released. That hasn't occurred," Dunn said. To make a determination whether the Chula Vista power was withheld to drive up prices, Dunn said, the committee must publicly examine "the bids Duke submitted from which the ISO issued orders to the plant." They include the expensive hour-ahead and day-ahead markets, he said. Duke, a North Carolina-based wholesaler that operates several plants in California, noted that it considers the information proprietary and off-limits to legislators not on the committee. Duke spokesman Tom Williams insisted that the generator is attempting to comply with the committee's demands. But he was unable to say whether Duke would agree to make the bidding documents public along with other records the committee plans to turn over. "We are complying now," Williams said. "There is some suggestion that we are leaving stuff out when we have not had a chance to testify. . . . I don't know what we are ultimately going to do." The committee had threatened to cite eight wholesale generators unless they provide pricing and bidding documents by Wednesday. Six, including Duke, have said they would comply to avoid a contempt citation. Two, Enron and Mirant, were cited. Dunn said the committee on Wednesday likely will give companies that are trying to comply an extra week to do so, but others probably will be formally charged with contempt in a report to the full Senate. The upper house is the final arbiter of such issues. Although there is scant precedent for levying penalties against those cited for contempt, Dunn said he favors imposing severe fines. In 1929, the most recent case, a cement company executive was sent to jail. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. July 10, 2001 Houston Chronicle California to get plan for refunds Officials celebrate judge's proposition By DAVID IVANOVICH and LAURA GOLDBERG Copyright 2001 Houston Chronicle WASHINGTON -- Power companies failed Monday to reach agreement with California over how much to pay in refunds for alleged overcharging during the state's electricity crisis. And so the judge who tried to mediate those talks will recommend a plan that would generate "hundreds of millions, and maybe $1 billion" worth of refunds, a far cry from the $8.9 billion California has demanded. A marathon, 15-day negotiating session between California and a collection of power generators that included Houston-based Reliant Energy, Enron Corp., Duke Energy North America, Dynegy and El Paso Corp. ended without the parties coming close to clinching a deal. "In 15 days you can't work miracles," said Curtis L. Wagner, the administrative law judge overseeing the talks at the Federal Energy Regulatory Commission. As a result, Wagner will propose the five-member commission adopt a plan that would result in at least some refunds for power sold between October 2000 through May. California officials quickly seized on that point to claim victory. Michael Kahn, head of the California Independent System Operator, called Wagner's plan a "ringing endorsement" of his states' claims that refunds are necessary. But Wagner's methodology for determining how those refunds should be calculated tilted toward the power generators' position in many key respects, hence the wide disparity between his ballpark estimates and California's claims. Wagner noted that he had not run the numbers under his methodology. Instead, he will recommend regulators hold hearings within 45 to 60 days to determine exact refund totals. California officials insisted the final refund dollars will total "multiple billions." And they left open the very real possibility they will sue in federal court to recoup the remaining dollars they believe they are owed. California Gov. Gray Davis, who has been a vociferous critic of the commission, went on the offensive again Monday. "While in the past the FERC has shown little, if any, interest in consumers, they now have the opportunity to redeem themselves by returning the $8.9 billion California has demonstrated it is owed," Davis said in a prepared statement. During the negotiations, the electric power companies, marketers and other suppliers offered to pay $716.1 million, never coming anywhere close to California's demands. "Not surprisingly, the energy pirates that bilked rate payers out of billions of dollars stonewalled and refused to negotiate in good faith with our team in Washington," Davis said in his last salvo at the out-of-state generators. California wanted Reliant, for instance, to pay $376 million in refunds, said John Stout, senior vice president for asset commercialization for Reliant's Energy Wholesale Group. But that's nearly three times the $127 million operating margin the company garnered from its California operations between October and May, according to a filing the company made with the Securities and Exchange Commission last week. Stout said Reliant offered to pay slightly less than $50 million. "We were essentially offering to refund one third of the operating margin over the relevant period," Stout said. But Davis contends: "The energy generators and suppliers refused to recognize their responsibility to the people of California and own up to their profiteering." California's claims for $8.9 billion include sales starting in May 2000. But Wagner only considered claims from October onwards. That meant $3 billion of California's claims were not part of the settlement talks. "For California to continue this bogus claim of $8.9 billion, I think just shows that they are not interested in any kind of a settlement," Enron spokesman Mark Palmer said. "They are just interested in creating a whipping post. The last thing that the political leadership in California wants to do is take responsibility for the problem they created." Joel Newton, regulatory counsel for Dynegy and a spokesman for a coalition of generators, argued that California's analysis did not account for last year's rise in natural gas prices, high environmental costs and transportation constraints for both electricity and natural gas. The settlement talks were organized not only to try to resolve the differences over refunds but other outstanding disputes stemming from California's power debacle. California, trying to move away from its dependence on power purchases from the spot market, has been trying to line up long-term power contracts. As of June 12, the state had signed deals totaling $42.8 billion with 18 different suppliers. As a result, California purchased only 1.9 million megawatt hours of power on the spot market, down from 4 million in May. But with a slew of civil and potentially criminal investigations, some power companies have been loathe to sign long-term deals while those disputes are still outstanding. The power companies pushed, as part of the settlement negotiations, to have those other investigations dropped. But California officials refused. "We're disappointed that we were unable to reach a global solution," said Dynegy spokesman Steve Stengel. California is not the only Western state seeking refunds. Other states in the region have their own claims, totaling more than $6 billion. Wagner has proposed holding a separate negotiating session for those states, arguing that their concerns had been given short shrift in the settlement talks because of the central battle with California. INDIA: CEO of Enron's Indian unit Dabhol quits. 07/10/2001 Reuters English News Service (C) Reuters Limited 2001. BOMBAY, July 10 (Reuters) - The president and chief executive officer of Enron Corp's Dabhol Power Company, which is involved in a drawn out row with an Indian utility, has quit following the expiry of his contract, a Dabhol spokesman said on Tuesday. Neil McGregor, who has been involved in crucial discussions to solve a more than six-month-old dispute with the Maharashtra State Electricity Board (MSEB) over payment defaults and high tariffs, will leave for Singapore soon to pursue other opportunities, the spokesman added. "My contract expired on June 30. I have decided against its renewal and will pursue other challenges elsewhere in the global utility sector," McGregor told the Press Trust of India. The wrangle has affected India's image among foreign investors and threatens nearly $3 billion of foreign investment. Dabhol is building a $2.9 billion, 2,184 MW plant in the western Indian state of Maharashtra in two phases. The first phase of 740 MW is up and running, while the second phase of 1,444 MW is 97 percent complete. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. US Enron Chmn Confirms India Dabhol Pwr CEO's Resignation 07/10/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) NEW DELHI -(Dow Jones)- U.S. energy major Enron Corp.'s (ENE) chairman, Kenneth Lay, confirmed Tuesday the resignation of Neil McGregor, president and chief executive of Enron India's subsidiary Dabhol Power Co. "Yes, Mr. McGregor's contract with us ended, and he decided to move on on his own. He did a good job with us," Lay told reporters. Earlier Tuesday, India's Economic Times reported McGregor had stepped down from his post "to pursue other projects." Enron India's managing director, K. Wade Cline, will assume the additional responsibility of managing operations of Dabhol Power, the report said. - - 10/07/01 07-12G Lay said a meeting with Federal Finance Minister Yashwant Sinha earlier Tuesday aimed at resolving a prolonged payments dispute between DPC and its principle buyer, the Maharashtra State Electricity Board, ended inconclusively. "We discussed the problems of the Dabhol project. We discussed the avenues to end those problems. We haven't come to any conclusion today. We didn't expect to come to any conclusion today. We're certainly very hopeful that the problems of Dabhol Power Co. can, and will be resolved fairly quickly," Lay said. Enron Corp. has a 65% controlling stake in the US$2.9 billion Dabhol Power Project, India's single largest foreign investment. Other shareholders include General Electric (GE) with 10% and Bechtel Group Inc. (X.BTL) with 10%. The MSEB has defaulted on payments totaling US$48 million to DPC, which was providing electricity from its 740 megawatt power plant located south of Maharashtra's capital, Bombay. In May, Enron served a preliminary termination notice on the MSEB, which stopped buying power from Dabhol. DPC said in June that contractors halted work on Phase II due to payment defaults. Continuing defaults by the MSEB is making it almost impossible for DPC's lenders to disburse additional funds for Phase II construction. The stoppage will add to overall project cost, Lay said, adding this was beyond the company's control. Lay said construction of Phase Two, including the company's liquified natural gas import facility, is 85% complete. -By Himendra Kumar, Dow Jones Newswires; 91 11 4619426; himendra.kumar@dowjones.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron's Kenneth Lay on its $3 Bln Indian Power Project: Comment 2001-07-09 09:56 (New York) New Delhi, July 9 (Bloomberg) -- Kenneth Lay, chairman of Enron Corp., the world's biggest energy trader, on its $3 billion India unit Dabhol Power Co. Lay met India's Power Minister Suresh Prabhu in New Delhi today. He was accompanied by Wade Cline, managing director of Dabhol Power. ``We had a productive conversation. Obviously there are problems and differences and they need to be solved.'' Dabhol and the Maharashtra State Electricity Board, its only customer, have been quarrelling for the past seven months over unpaid bills. The board no longer buys power from the unit and construction work on the second phase of the plant was stopped last month after lenders stopped funding it. ``We are working hard and are committed to finding a solution for investors'' in the project, India's biggest foreign direct investment yet. ``It's premature to say whether we will pull out'' of the project. ``We have been and remain committed to India.'' MORE WORK NEEDED TO REVIVE INDIA'S DABHOL PROJECT: ENRON CHIEF 07/10/2001 Asia Pulse © Copyright 2001 Asia Pulse PTE Ltd. NEW DELHI, July 10 Asia Pulse - Enron Corporation said that more work was needed to review its controversial Dabhol power project, which is embroiled in a payment dispute with Maharashtra State Electricity Board. "We did not come to any conclusion and we did not expect to come to any conclusion. More work is required by us and the government to review the project," Enron Corporation Chairman Kenneth Lay told newspersons after meeting Finance Minister Yashwant Sinha. Enron promoted Dabhol Power Company (DPC) and MSEB are locked in a payments dispute which provoked Enron to serve a preliminary termination notice to the utility, which in turn stopped buying power from 740-MW phase-I of Dabhol project. The US energy giant, which holds 65 per cent interest in DPC, has stopped construction of the 1,444 MW second phase of the project after completing 85 per cent of the work, Lay said. "It is in the government's and the country's interest to revive the project," he said while expressing optimism that an amicable solution to the problem would be found soon. Lay, who had a two-hour long meeting with Power Minister Suresh Prabhu yesterday to discuss the fate of the project, said that the solution should take care of the interests of both India and investors. Lay, who flew here yesterday, would meet Maharashtra Chief Minister Vilasrao Deshmukh tomorrow in a bid to resolve the stand-off with MSEB. (PTI) 10-07 1942 Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Financial Post: Canada Tropic Networks reveals investors: $60-million financing Kim Hanson Financial Post 07/10/2001 National Post National C04 © National Post 2001. All Rights Reserved. Tropic Networks Inc., an Ottawa-based optical networking firm, will announce today that Enron Broadband Services, a subsidiary of Enron Corp. and Anschutz Investment Co. were key investors in Tropic's previously announced US$60-million financing. Enron is the biggest energy trader in North America. Anschutz Co. is the financial arm of Anschutz, based in Denver. Tropic Networks makes hardware and software that allows major telecommunication companies to deliver high-bandwidth data over fibre-optic lines. In February, the company announced the financing, which still ranks as one of the largest financings to be completed in 2001 by a privately held Canadian firm. The company will use the proceeds to expand marketing, sales and research efforts. Anschutz and Enron are members of Tropic's investor partner team, which includes Crescendo Ventures, a US$1-billion venture firm in Palo Alto, Calif., Goldman Sachs, Altamira, Raza Venture Funds, Celtic House International, Kodiak Venture Partners and the Ontario Teachers' Pension Plan Board, all of which invested in the latest round. To date, Tropic Networks has raised US$67-million through two rounds of financing. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. India: New engg consultant for Enron project likely 07/10/2001 Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - Asia Intelligence Wire MUMBAI, July 9. INDIAN lenders to Enron's power project are likely to appoint a new engineering consultant to work out the cost of different alternatives to complete the Dabhol power project. According to sources, Stone and Webster (S&W), the consultant which was given the mandate to work out the costs of different options to complete the project has not got back with its revised report. S&W was given the mandate after a meeting of all lenders to the project in Singapore on June 5 and 6. However, the lenders were not happy with the consultant as it had delayed the report and had also failed to get the figures ratified by Enron. Even though the lenders wrote to S&W asking it to rework the report, the consultant has not done so, the sources said. Therefore, the lenders may change the consultant, they said. Meanwhile, the lenders are hoping that the Chairman of Enron Corporation, Mr Kenneth Lay, would be able to thrash out a solution to the crisis. According to sources, Mr Lay would be in a better position to take hard decisions such as taking a hit on returns to reduce the cost of power generated by Dabhol Power Company (DPC). But they said the company is unlikely to back down on the demand for lifting the entire power produced by it. The Enron Corporation chief is scheduled to meet the Maharashtra Chief Minister, Mr Vilasrao Deshmukh, tomorrow. Mr Lay, who is in Delhi meeting with Union Ministers and bureaucrats, will reach here on Tuesday. Mr Vinay Bansal, Chairman, Maharashtra State Electricity Board, and Mr Vinay Mohan Lal, State Energy Secretary, are also likely to attend the meeting, sources said. He would meet Indian lenders on Wednesday. According to sources, he will meet the IDBI Chairman, Mr S.K. Chakrabarti. It is, however, not known if representatives of other lenders would be present. Mr Lay's meeting with the Chief Minister assumes an added significance as the Democratic Front Government is toying with the idea of ordering a judicial probe into the Enron issue. A decision on the issue was to be taken at the meeting of the Democratic Front Co-ordination Committee last week. However, a final decision was postponed to July 11. Mr N.D. Patil, Convenor of the Democratic Front, told Business Line that the July 11 meeting would be the last one on this issue. "We would not have another meeting on Enron. Whatever be the decision, it would be made on July 11," Mr Patil said. According to sources, at the last co-ordination panel meeting, a decision had almost been taken to order a judicial probe. However, it was deferred at the last minute, probably in view of Mr Lay's visit, they said. Dinesh Narayanan Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. India: Centre firm on Dabhol 07/10/2001 Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - Asia Intelligence Wire NEW DELHI, July 9. THE Centre today stuck to its guns and refused to entertain Enron worldwide chief, Dr Kenneth Lay's request for buy-out of the plant by a Central utility. In a meeting spanning nearly two hours between the Enron Chairman, Dr Lay, and the Power Minister, Mr Suresh Prabhu, the former sought an expeditious process to resolve the Dabhol issue either way. Sources pointed out that the Enron chief had requested the Government to firm up a solution within the next two-to-three months to enable the company to take an investment decision on the Dabhol project. In other words - whether to pull out of the project or to stay on. Dr Lay will also be meeting the Finance Minister, Mr Yashwant Sinha, besides the Leader of the Opposition, Ms Sonia Gandhi, on Tuesday. He will then go to Mumbai to meet leaders of the ruling NCP combine to ascertain the State Government's sentiments. During the meeting, Mr Prabhu communicated to Dr Lay the Centre's support towards a workable solution acceptable to the stakeholders - namely, the State, the Centre and the consumers. Besides Central intervention by way of buy-out of the Dabhol plant, Dr Lay discussed various other options, including third party sale to identified consumers, willingness to reduce tariff by 10 per cent, etc. - options which have already been discussed in the past by the Energy review committee set up the Maharashtra Government. A good part of the meeting was also spent discussing the power shortage crisis in California. Emerging from the meeting, Dr Lay said, "It was a productive meeting and we had constructive discussions. Dabhol is a difficult problem but we agreed that it needs to resolved quickly. I will be meeting the Government of Maharashtra later this week. We are committed to finding a solution." Earlier in the day, Dr Lay met with the Finance Secretary, Mr Ajit Kumar. Our Bureau Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron has no immediate plan to quit India, says Lay Our Economy Bureau NEW DELHI 07/10/2001 Business Standard 3 Copyright © Business Standard Enron has no immediate plans to quit India. The high-profile chairman of Enron Corp, Kenneth Lay, told reporters after a two-hour long meeting with Union power minister Suresh Prabhu that it was premature to talk about Enron 's exit from the Dabhol power project at this juncture. "We had been, and are committed to India," said Lay. He added that the problem was complex and Enron was working on finding a solution. Sources said that Lay in his meeting with Prabhu discussed various possibilities associated with Enron's future in the Dabhol power project. They added that the Enron chief outlined the conditions for staying with the project. The other option discussed for solving the Dabhol imbroglio was to find a buyer. AES and a few other companies have already shown interest in taking over the project. Sources said that in today's meeting the terms on which Enron would like to sell its stake to the buyer was also discussed in detail. They, however, added that Lay didn't place any alternative proposal to solve the ongoing DPC-MSEB payment problem. Lay said that the company would hold further consultations with the power ministry. The Enron chief is slated to meet finance minister Yashwant Sinha tomorrow and Maharashtra Chief Minister the day after to discuss the issue. Earlier in the day, Enron India CEO K Wade Cline met finance secretary Ajit Kumar to apprise him of the Enron's viewpoint on its future association with the Dabhol project. Cline told reporters after the meeting that they wanted to prepare both the sides for the subsequent meeting with the finance minister. He added, "There are a variety of options facing us with the project and we are just trying to work through them." Cline said that Enron's plans with the Dabhol project would depend on how the government responded to the options outlined by them. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron seeks CII's help on Dabhol Surajeet Das Gupta New Delhi 07/10/2001 Business Standard 1 Copyright © Business Standard Enron Corporation chairman Kenneth Lay had a quiet meeting today with Confederation of Indian Industry brass where they discussed ways to resolve the Dabhol Power Corporation imbroglio. The one-hour meeting, called on Enron's request, was attended by CII president Sanjiv Goenka and director-general Tarun Das. Enron was represented by Lay and his team. While details of the meeting are not clear, Enron is believed to have sought CII's help in finding a solution to the Dabhol issue. Lay and his team also briefed the CII brass on the various meetings they would be having in Delhi and Mumbai. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Business TAKING STOCK Enron takes some heat, but rates a `buy' Andrew Leckey, Tribune Media Services 07/10/2001 Chicago Tribune North Sports Final ; N 8 (Copyright 2001 by the Chicago Tribune) Q. I purchased Enron at $46 a share and it rose to nearly $90. It has since plummeted back to around my purchase price. Will the company fare better in the future? A. It's been a tough year for this Houston-based oil, natural gas and communications trader, even though it beat earnings expectations in its latest quarter and future prospects remain promising. Enron (ENE) is owed $580 million by bankrupt Pacific Gas & Electric. The company has also been lambasted by California officials who believe it and other energy firms forced electricity prices upward by holding back supply. Jeffrey Skilling, chief executive and president, was hit by a pie hurled by a protestor on a recent visit to San Francisco, indicative of public sentiment there toward Enron. Skilling places the blame for the current energy crisis on California regulators. Meanwhile, plans to sell Enron's Portland General unit to Sierra Pacific Resources for $3 billion have gone awry because of that Nevada utility's financial problems. Enron also pulled out of a 20-year deal with Blockbuster Video to deliver movies over the Internet. In the international front, the government of India asked for the third time in seven years to renegotiate its contract with the Dabhol Power Co., which is 65 percent owned by Enron. Construction on the second phase of the troubled Dubhol power plant has been halted because of unpaid bills. Amid all this turmoil, shares of Enron are down 43 percent in value this year, a dramatic departure from last year's gain of 89 percent and 1999's increase of 58 percent. But at its reduced stock price, it currently rates a solid "buy" recommendation from the Wall Street analysts who follow it, according to the Boston-based First Call research firm. That consists of 11 "strong buys," four "buys" and one "hold." Enron's core business of electricity and natural gas trading remains strong and growing. The company's earnings are expected to increase 18 percent this year, versus 20 percent for the utility industry. Next year's projected 15 percent increase compares to 7 percent for its peers. The predicted five-year annualized growth rate for the company is 16 percent. The firm is also involved in the development of an intelligent network platform to provide bandwidth management services and the delivery of high bandwidth communication applications. The broadband services division posted a $35 million loss in the most recent quarter. ---------- Andrew Leckey answers questions Sunday in Business and Tuesday in Your Money. Address inquiries to Andrew Leckey, P.M.B. 184, 369-B Third St., San Rafael, Calif. 94901-3581, or by e-mail at andrewinv@aol.com. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Power Producers' 2Q Bolstered By April, May Prices By Kaja Whitehouse Of DOW JONES NEWSWIRES 07/09/2001 Dow Jones News Service (Copyright © 2001, Dow Jones & Company, Inc.) NEW YORK -(Dow Jones)- Independent power producers should meet analysts' second-quarter earnings targets, with increased production offsetting tempered June prices. Electricity prices remained healthy this quarter, especially in April and May. But the value of power cooled in June, weighed down by falling natural gas prices, mild weather and battling politicians, analysts said. Power generators scrambled to pump up June volumes to offset the price drops, analysts said. With increased production because of development and acquisitions, generators sold more power this quarter than last year, said Barry Abramson, an analyst at UBS Warburg. Many in the group are expected to post earnings growth of as much as 20. Second-quarter earnings generally fall below the first-quarter results because the mild weather decreases the demand for heating and the need for air conditioning usually hasn't fully kicked in. The only glitch was the sudden and precipitous drop in June power prices, analysts said. The cost of one megawatt of power during peak hours in Southern California plummeted to an average June high of $83 from highs of $275 in May. Power prices in the Northeast dipped to an average June high of $44 from $60 in May. Analysts cited tepid natural gas prices, which help determine the price of electricity as a common fuel for generation. "Gas prices in June collapsed," said Chris Ellinghaus, an analyst at Williams Capital Group. In Southern California, the fuel cost power generators $7 per million British thermal unit on the wholesale natural gas market mid-June, versus $10.50 per BTU from just a month prior. Lower gas prices added pressure to generators that supplied electricity to markets with cooler weather compared with last year. Sellers to Northeast markets suffered an average loss of $20 per megawatt in peak May and June hours this year due to the cooler weather. But of those power generators exposed to Northeast markets, only NRG Energy Inc. (NRG) was expected to show some weakness. The Minneapolis company already said it expects second-quarter earnings of 21 cents to 22 cents a share, below analysts' previous expectations of 31 cents. As one of the smaller generators, NRG had "less opportunity to make it up elsewhere," said Gordon Howald, utility analyst at Credit Lyonnais Securities. Analysts now see NRG Energy posting 22 cents a share in the second quarter, according to a Thomson Financial/First Call survey. That is down from last year's second-quarter profits of 28 cents a share. Generators that serve Western power markets are expected to profit again from the regions' burgeoning demand and volatile spot market sales. The spot market sells electricity contracts like a commodity, and has been fetching high premiums as Western demand continues to outpace supply. Several companies already said they expect to meet analysts' profit targets, despite efforts by the government to implement price controls on the wholesale market. Houston's Enron Corp. (ENE) said it expects to meet the Thomson Financial consensus of 42 cents a share in the second quarter and $1.80 for the year. Last year, Enron posted earnings of 34 cents a share in the second quarter. Atlanta's Mirant Corp. (MIR) said it expects to achieve previously targeted earnings of 45 cents to 50 cents a share, in line with analysts' estimates of 46 cents for the quarter. Last year, Mirant posted 25 cents a share in the second quarter. Generators that have tied their production to future contracts in the West, such as Calpine Corp. (CPN) and Duke Energy Co. (DUK), are also expected to show strong results. Calpine is considered immune to spot market investigations brewing in California. As the provider of more than half of California's long-term power contracts, the producer is viewed by government officials as one of a few helping the state keep its lights on. Additionally, the generator has wiped away fears that it would one day be swamped with unpaid bills by its largest customer, PG&E Corp.'s (PCG) Pacific Gas & Electric. The utility, which filed for bankruptcy protection in April, agreed in early July to pay money owed to the generator, as long as a bankruptcy court approves. Calpine is also considered a strong player because of its natural gas reserves. According to Thomson Financial, analysts estimate Calpine will post earnings of 30 cents a share in the second quarter, above last year's earnings of 19 cents a share. Duke Energy Corp. (DUK), Charlotte, N.C., is expected to post earnings of 52 cents a share in the second quarter, according to Thomson Financial. That is above last year's earnings of 44 cents a share. Increased production through acquisitions are also expected to boost earnings for many generators this quarter. AES Corp.'s (AES) exposure to tumultuous Brazil markets is expected to be offset through recent expansion to other South American countries such as Colombia, Venezuela and Argentina. The Arlington, Va., company is expected post earnings 30 cents a share for the second quarter, above last year's earnings of 25 cents a share. As for the third quarter, analysts are divided about how they expect the generators to fare. Of course, the summer heat should drive demand, but volatility on the spot market may be tempered across the nation by price controls in California, analysts said. Already, California is said to be reducing the amount of energy it buys on the spot market in an effort to rein in prices. That should benefit companies like Calpine, which sells its production by long-term contracts. But those that rely on spot market sales across the country could be hit, especially if other deregulated states request similar price caps, analysts said. There is also concern that some generators will be asked to return some portion of $9 billion in power sales that California officials allege were overcharged. But settlement talks end today, and shouldn't yield results soon enough to affect second-quarter results, Howald said. "Second quarter should be unscathed," he added. -By Kaja Whitehouse, Dow Jones Newswires; 201-938-5393 kaja.whitehouse.dowjones.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron's Kenneth Lay on India's Dabhol Power Project: Comment 2001-07-10 06:10 (New York) New Delhi, July 10 (Bloomberg) -- Kenneth Lay, chairman of Enron Corp., the world's biggest energy trader, speaks after talks with India's Finance Minister Yashwant Sinha about its $3 billion Dabhol Power Co. unit. Dabhol and the Maharashtra State Electricity Board, its only customer, have been quarrelling for the past seven months over unpaid bills. The board no longer buys power from the unit and construction work on the second phase of the plant was stopped last month after lenders stopped funding it. ``We've had a very productive meeting with the minister of finance. We discussed the problems with the Dabhol project (and) a number of different avenues to try and resolve the difficulties. ``We didn't come to any conclusions today and didn't expect to come to any conclusions. It will take more work from us and the governments of Maharashtra and India. We are very hopeful that the problems can and will be resolved fairly quickly. ``It's in everybody's best interest, the government of India, the U.S., investors, the government of Japan. We have many government financial entities involved in this project, the Export- Import Bank of the U.S. and OPIC (Overseas Private Investment Corporation) have about $400 million of debt involved in the project. ``The Japanese export bank has about $350 million invested in the project. The LNG (liquefied natural gas) contracts are with the governments of Oman and Abu Dhabi. Private sector investors include Enron, General Electric and Bechtel. ``So you have a lot of interest here that would like to see this resolved fairly quickly.'' The second phase of the project ``is about 85 percent complete including the LNG facility. But with non-payments by the Maharashtra State Electricity Board, the lenders and equity investors were not willing to continue providing the financing for completing the construction. Now, it's been demobilized. ``This will add additional cost to the project ultimately and delay its start. We could not avoid that and very much regret it because Dabhol, both phase one and two as well as the LNG facility, are great for Maharashtra and for India.'' Prosecutors to Get Reliant, Mirant, Dynegy Documents (Update1) 2001-07-09 19:05 (New York) Prosecutors to Get Reliant, Mirant, Dynegy Documents (Update1) (Adds comments from Oregon in fifth paragraph, background in seventh paragraph, company comment in 11th paragraph.) Los Angeles, July 9 (Bloomberg) -- California's attorney general can share with Oregon and Washington documents he subpoenaed from Reliant Energy Inc., Mirant Corp. and Dynegy Inc. in an electricity price-collusion probe, a state judge ruled. Los Angeles Superior Court Judge George Wu today said California Attorney General Bill Lockyer can release the information July 12. The generators told the court they plan an immediate appeal and will ask a higher court to bar distribution of the papers. The states, California's grid manager and Senate, and the Federal Energy Regulatory Commission are among the agencies looking into whether generators illegally manipulated the Western electricity market to charge record prices. California is months into an energy crisis that has brought rolling blackouts and the bankruptcy of PG&E Corp.'s Pacific Gas & Electric. The documents will advance state probes; if generators are charged and found guilty of violating state law, they may face civil or criminal penalties. ``The court orders that unless a stay is granted by the Court of Appeal, the protective order will be lifted as to the Washington and Oregon attorneys general'' on July 12, Wu said in an order after hearing oral arguments today. The three states are pursuing separate investigations and each agreed months ago to share any information that could help the others, said Kevin Neeley, spokesman for Oregon Attorney General Hardy Myers. Oregon's investigation ``has been relatively slow going,'' Neeley said, noting that the state was having difficulty getting documents. Looking for Refunds Wu two weeks ago ruled that Lockyer could share documents with other California agencies. The attorney general and other agencies are investigating most major generators, such as Duke Energy Corp. and Enron Corp. Mirant, Dynegy and Reliant were the only companies to challenge Lockyer's right to share documents. Also today, two weeks of Federal Energy Regulatory Commission talks between power sellers and California on overcharges ended without an accord. California says it is due a refund of $8.9 billion. The companies say they're still owed money for past power deliveries. Houston-based Dynegy spokesman Steve Stengel said his company is ``confident that if in fact the attorney general turns over the documents, any information will be kept confidential'' as stipulated in the subpoena order. Spokesmen for Houston-based Reliant and Atlanta-based Mirant declined to comment. Reliant shares rose 9 cents to $32.49, Mirant shares rose $1.58 to $38.35 and Dynegy shares rose 48 cents to $46.85.
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