USA: UPDATE 1-Enron CEO says stock hit because of high multiple.
Reuters English News Service, 03/28/01

USA: ICE to offer Internet products trade off Colonial Pipeline.
Reuters English News Service, 03/28/01

US FERC To Seek Input On Regional Pwr Grid Coordination
Dow Jones Energy Service, 03/28/01

Top Enron executives reap bonuses for strong 2000 performance
Associated Press Newswires, 03/28/01

USA: Enron CEO says stock hit because of high multiple.
Reuters English News Service, 03/28/01

USA: Viacom nixes plan to spin off rest of Blockbuster.
Reuters English News Service, 03/28/01

``Plumbers'' for Today's Economy Dominate Online Investor Tournament 
Sponsored by Fast Angels; Eight Companies Work Behind-the-Scenes to Help 
World Act Faster and Smarter
Business Wire, 03/28/01

NIGERIA: Nigeria will break up state power monopoly - minister.
Reuters English News Service, 03/28/01

Enron's unit presents thermal power plan to Aomori gov.
Kyodo News, 03/28/01

Regulators grant rate hike for utilities
Rates could rise almost 50 percent under CPUC plan
CBS MarketWatch.com, 03/27/01

Hefty payday for Enron's top execs
$7 mln bonus for chairman, $5.6 mln to CEO for 2000 
CBS MarketWatch.com, 03/27/01




USA: UPDATE 1-Enron CEO says stock hit because of high multiple.
By C. Bryson Hull

03/28/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW ORLEANS, March 28 (Reuters) - Wall Street's stampede away from stocks 
with high price to earnings (PE) ratios is finally catching up with Enron 
Corp. and hurting its share price, the energy giant's top executive said on 
Wednesday. 
"I think the stock price dropped because of multiple compression," Enron 
President and Chief Executive Jeff Skilling told an audience of institutional 
investors at the Howard Weil Energy Conference in New Orleans.
Enron currently trades at about 41 times earnings, a value Skilling said he 
considers "low and clearly sustainable moving forward." 
His comments came as Enron shares dropped as much as 5 percent Wednesday, 
before closing down $2.36, or 3.9 percent, at $58.10 in trading on the New 
York Stock Exchange. Enron's fall outpaced the less than one percent drop in 
the Standard & Poor's Utility Index. 
Skilling pointed to the wave of companies whose prices have dropped sharply 
in the last year because investors thought they were overvalued, with PE 
multiples above 30 times earnings range. 
"We kept our multiple and felt a little like the last duck in the pond and 
there was still a lot of ammo with the hunters," Skilling said. 
Enron's stock remained immune to the trend against high PE ratios until last 
week, when it dropped under $60 for the first time since January 2000. It 
lost 8 percent over a two-day period, March 21-22, prompting Skilling to hold 
a conference call last Friday to assuage investors and analysts. 
One analyst said several Enron-specific issues have more to do with the 
recent decline in the company's share price than the broader market disregard 
for high PE ratio stock. 
"He is exactly right that high multiple stocks have sold off, and you see 
that particularly in the NASDAQ. Telecoms and the tech sector have been hit 
hard and Enron had a large part of its valuation in the telecom sector with 
broadband," Commerzbank securities analyst Andre Mead said. 
The market took that value out as telecoms weakened across the board and as 
some doubts arose about Enron's timing on its broadband initiative and other 
issues, he said. 
"The bottom line is there are some market dynamics at work for at least a 
portion of the sell-off, but a good deal of it is Enron-specific, because the 
market is valuing the broadband (part) less," Meade said. 
The fall in its shares last week followed a rapid string of negative news 
about Enron, including continuing word that India's Maharastra State 
Electricity Board could not pay Enron for power from its Dabhol power plant; 
the termination of the broadband unit's marquee 20-year video deal with 
Blockbuster Inc. ; and false rumors of layoffs at the broadband unit. 
Enron has peaked at $90.56 and touched a low of $51.55 over the past 12 
months.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


USA: ICE to offer Internet products trade off Colonial Pipeline.

03/28/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW YORK, March 28 (Reuters) - Internet-based IntercontinentalExchange (ICE) 
plans to offer trading in U.S. refined products off the Colonial Pipeline in 
the second quarter of this year, a company official said Wednesday. 
The Houston-to-New York Colonial Pipeline is the largest refined products 
pipeline in the United States, pumping a total of 2.35 million barrels per 
day of gasoline, heating oil, diesel and jet fuel.
Refined oil prices for the nation's refining hub on the Gulf Coast are set by 
trade into the pipeline. 
ICE however would not elaborate on which products exactly it will trade. 
"That's the plan, but we don't really have any further details," said a 
company official. 
With backing from major banks and energy groups, ICE (https://www.intcx.com) 
has become one of the most widely distributed online energy marketplaces, 
despite only launching trading last fall. 
It hosts a range of energy and precious metal 'over the counter' (OTC) 
contracts - those traded outside regular futures exchanges. Oil derivatives 
traded on ICE include crude oil, fuel oil, heating oil, jet fuel, gasoline 
and naphtha. 
But with an average of $3.5 billion in daily trade volume, rival Enron Corp 
(ENE.N) subsidiary EnronOnline (www.enrononline.com) has been the most 
successful online energy trading platform. 
While it does not currently offer trading of Colonial Pipeline products, an 
EnronOnline official did not rule out such a move in the future. 
"We have been making additions pretty much every month," the official said. 
"If we get demand for Colonial, I'm sure we'll add it. We're making large 
efforts to expand that product area." 
This week, EnronOnline launched trading in WTI crude options and spread 
trading in Light Louisiana Sweet/St. James, West Texas Sour/Midland and West 
Texas Intermediate/Midland crudes.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 



US FERC To Seek Input On Regional Pwr Grid Coordination
By Bryan Lee

03/28/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

OF DOW JONES NEWSWIRES 

WASHINGTON -(Dow Jones)- The U.S. Federal Energy Regulatory Commission agreed 
Wednesday to seek comment on whether it should hold a technical conference on 
the coordination of wholesale power transactions among the regional 
transmission organizations, or RTOs, that it seeks to develop.
FERC is in the midst of implementing a sweeping order that will direct the 
utilities it regulates to turn over control of their transmission assets to 
RTOs. 
The order aims to promote more liquid regional wholesale power markets by 
creating independent power-grid operators, removing the remaining ability of 
vertically integrated utilities to use control of transmission to competitive 
benefit in power markets. 
In December, competitive power suppliers and industrial consumers petitioned 
the commission to convene a technical conference on what was termed the 
"seams" issue involving wholesale power transactions from one 
RTO-administered grid area to another. 
"The transmission grid for electricity is interstate and inter-regional," 
said John Anderson, executive director of the Electricity Consumers Resource 
Council, or ELCON, which represents large industrial power users. 
"We must be sure that, first, RTOs coordinate transmission facilities of 
different utilities, but, second - and probably more important - we must 
ensure that transmission facilities coordinated by each RTO are also 
coordinated" among one another, Anderson said. 
If the "seams" issue isn't addressed, "RTOs could soon resemble huge speed 
bumps which could not just slow down, but do permanent harm to the vehicle of 
competition," he said. 
ELCON was joined in the petition by the Electric Power Supply Association, 
which represents competitive power producers and marketers, and by Enron 
Power Marketing Inc. (ENE), Reliant Energy Power Generation (REI) and Dynegy 
Inc. (DYN). 
FERC commissioners noted Wednesday that they soon will issue a notice seeking 
comment on the issues raised by the petition, and whether the commission 
should grant the request for a technical conference. 
Commissioner William Massey welcomed the decision, noting that the lack of 
standardized procedures could pose "an impediment to trade." 
Massey called for FERC to shepherd an industry-wide effort to develop 
consistent standards for information and terminology regarding scheduling and 
reservation of transmission capacity among RTOs, - including the development 
of "generic interface procedures." 
FERC spurred a similar standardization process in the natural gas industry, 
which resulted in creation of a Gas Industry Standards Board, or GISB. 
GISB produced uniform communications protocols for reserving pipeline 
capacity and standardized business practices, Massey noted, expressing the 
desire for the electric industry to do the same. 
ELCON was reserved in reacting to FERC's response to the petition, since the 
commission could ultimately decide against holding the technical conference. 
"We think recent events in California and the possibility of additional 
supply disruptions in other areas of the country highlight the need for 
inter-regional coordination," said Marc Yacker, ELCON's director of 
government and public affairs. 
"We continue to hope that FERC will address this issue," Yacker said. "The 
closer we get to larger, more liquid regional wholesale power markets, the 
better off we'll be." 
The issue arose as FERC Wednesday approved an RTO for Florida. Ordinarily, 
FERC wouldn't approve a single-state RTO, but did given that the state is a 
peninsula. 
However, the Electric Power Supply Association, for which the bottleneck for 
sales into Florida is a big concern, raised the "seams" petition in that 
proceeding. 
The commission also must confront the issue in hashing out an RTO for the 
U.S. Midwest. FERC has approved two different grid entities in the region, 
the Alliance Regional Transmission Organization and the Midwest Independent 
System Operator. 
FERC has granted RTO status to the for-profit Alliance effort, in which 
participating utilities aim to spin off their transmission assets to create 
an independently traded transmission company. 
Earlier this year, FERC issued an order establishing an administrative 
proceeding designed to develop a merger agreement between the for-profit 
Alliance and the nonprofit Midwest ISO. 
The commission must act in the near future on an agreement struck in that 
proceeding that would maintain the Alliance and Midwest ISO as two separate 
entities, but operating under a single design for providing transmission 
services across the two entities. 
An attorney involved in the negotiations, who asked to remain anonymous, said 
the agreement illustrated that such "seams" arrangements could obviate the 
need for FERC to order establishment of RTOs encompassing broad geographic 
regions. 
-By Bryan Lee, Dow Jones Newswires; 202-862-6647; bryan.lee@dowjones.com

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


Top Enron executives reap bonuses for strong 2000 performance

03/28/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

HOUSTON (AP) - Energy marketing powerhouse Enron Corp. rewarded chairman 
Kenneth Lay with a $7 million bonus for the company's performance last year, 
a 79 percent increase from the year before. 
According to a March 2 filing with the Securities and Exchange Commission, 
the compensation committee of the Enron board of directors decided Lay, who 
was chief executive officer until last month, get an increase from his $3.9 
million bonus in 1999.
"We believe that Enron's executive compensation program has contributed 
significantly to the increase in shareholder value from 1991 to 2000, during 
which time a shareholder who invested $100 in Enron common stock would have 
received $1,497 or a 1,397 percent increase in value, compared to 391 percent 
for the S&P 500 and 534 percent for industry peers," the committee explained 
in the company's proxy statement. 
Lay's base salary remained flat at $1.3 million. 
Similarly, Enron president Jeffrey Skilling - who took over as chief 
executive officer in February - saw his bonus increase to $5.6 million from 
$3 million in 1999. Skilling's salary remained flat at $850,000. 
Enron, the nation's largest natural gas and wholesale electricity marketer, 
saw a 32 percent increase in 2000 profits to $1.3 billion. 
Shares of Enron were down $2.44 to $58.02 in afternoon trading Wednesday on 
the New York Stock Exchange.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


USA: Enron CEO says stock hit because of high multiple.
By C. Bryson Hull

03/28/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW ORLEANS, March 28 (Reuters) - Wall Street's stampede away from stocks 
with high price to earnings (PE) ratios is finally catching up with Enron 
Corp. and hurting its share price, the energy giant's top executive said on 
Wednesday. 
"I think the stock price dropped because of multiple compression," Enron 
president and chief executive Jeff Skilling told an audience of institutional 
investors at the Howard Weil Energy Conference in New Orleans.
Enron currently trades at about 41 times earnings, a value Skilling said he 
considers "low and clearly sustainable moving forward." 
His comments came as Enron shares dropped nearly 5 percent Wednesday, off 
$2.84 at $57.62 in midafternoon trading on the New York Stock Exchange. Enron
's fall outpaced the less than one percent drop in the Standard & Poor's 
Utility Index. 
Skilling pointed to the wave of companies whose prices have dropped sharply 
in the last year because investors thought they were overvalued, with PE 
multiples above 30 times earnings range. 
"We kept our multiple and felt a little like the last duck in the pond and 
there was still a lot of ammo with the hunters," Skilling said. 
Enron's stock remained immune to the trend against against high PE ratios 
until last week, when it dropped under $60 for the first time since January 
2000. It lost 8 percent over March 21-22, prompting Skilling to hold a 
conference call last Friday to assuage investors and analysts. 
One analyst said several Enron-specific issues have more to do with the 
losses than the broader market disregard for high PE ratio stock. 
"He is exactly right that high multiple stocks have sold off, and you see 
that particularly in the NASDAQ. Telecoms and the tech sector have been hit 
hard and Enron had a large part of its valuation in the telecom sector with 
broadband," Commerzbank securities analyst Andre Mead said. 
The market took that value out as telecoms weakened across the board and as 
some doubts arose about Enron's timing on its broadband initiative and other 
issues, he said. 
"The bottom line is there are some market dynamics at work for at least a 
potion of the sell-off, but a good deal of it is Enron-specific, because the 
market is valuing the broadband less," Meade said. 
The fall last week followed a rapid string of negative news about Enron, 
including continuing word that India's Maharastra State Electricity Board 
could not pay Enron for power from its Dabhol power plant; the termination of 
the broadband unit's marquee 20-year video on deal with Blockbuster Inc. and 
false rumors of layoffs at the broadband unit. 
Enron hit a high of $90.56 and a low of $51.55 over the past 12 months.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


USA: Viacom nixes plan to spin off rest of Blockbuster.
By Derek Caney

03/28/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW YORK, March 28 (Reuters) - Entertainment titan Viacom Inc. confirmed on 
Wednesday it will scrap plans to spin off its remaining about 82 percent 
stake in Blockbuster Inc. , saying it was happy with the performance of the 
video retail unit and wanted to keep it in the Viacom family. 
A spokeswoman said the company, which owns the CBS television network, 
Paramount Pictures and MTV among other entertainment properties, would 
disclose its plans in filings with the Securities and Exchange Commission in 
the next couple of days.
"We're very happy with Blockbuster's performance," the Viacom spokeswoman 
told Reuters. "We're pleased with the cash it generates. Blockbuster provides 
a lot of free cash flow for Viacom." 
The spokeswoman declined to comment on the possibility of Viacom buying back 
the outstanding 18 percent of Blockbuster shares, which total about 175 
million as of the end of December. 
The Wall Street Journal reported on Wednesday that Viacom was giving up on 
plans to split off Blockbuster, which has about 4,800 retail stores. 
Viacom took the minority Blockbuster stake public in August 1999 at $15, but 
it failed to generate much enthusiasm. Company executives said later that 
year it would not offer any remaining stock until its share price hit the 
$20-range. 
Viacom executives have said repeatedly in the past that they believed 
Blockbuster's shares were undervalued. 
Blockbuster reached a high of $17 in November 1999, before crumbling against 
the backdrop of investor belief that technology would dramatically change the 
movie distribution business and would leave retailers, who rely on customers 
visiting video stores, in the dust. Shares dropped to a low of $6.88 in 
October 2000. 
The increased popularity of satellite television and new digital cable 
technology, which compresses cable signals to allow hundreds of cable 
channels, and the specter of video-on-demand from a variety of services also 
has scared many investors away from Blockbuster, analysts said. 
"Blockbuster has been something of a conundrum to investors," said SG Cowen 
analyst Ed Hatch. "Its shares have suffered under a cloud that technology 
will make its stores obsolete." 
But Gerard Klauer Mattison & Co. analyst Jeffrey Logsdon noted that despite 
the threat of technological advances, the company has made considerable 
strides. 
"The company has dramatically redesigned its capital spending in the last 
couple of years," he said, citing the retailer's revenue sharing deals with 
film studios, in which the company shares video rental revenue in exchange 
for cheaper prices for the new video releases it buys. 
Logsdon also noted that the company has cut its new store additions, "which 
has potentially added between $100 million and $150 million a year in free 
cash flow. 
"With those two elements, Blockbuster becomes a significant cash cow and it 
becomes perhaps less necessary to have Blockbuster separate," he added. 
Indeed, in the last few months, Blockbuster has staged something of a 
turnaround, rebounding to its current level of $13.98, up 5 percent, or 68 
cents, in Wednesday's trading on the New York Stock Exchange. 
Earlier in 2000, Blockbuster announced several initiatives to take advantage 
of its brand name. It signed a deal with electronics retailer RadioShack 
Corp. to open up a "store-within-a-store" within RadioShack shops. 
It also struck a marketing agreement with satellite television provider 
DirecTV in which the two companies would jointly offer pay-per-view movies 
via DirecTV, while Blockbuster will promote and sell the satellite systems 
and services in its stores. 
DirecTV is owned by General Motors Corp.'s Hughes Electronics Corp. . 
Blockbuster's video-on-demand joint venture with Enron Corp. , however, was 
less successful, unravelling earlier this month with both companies saying 
they would pursue separate services. 
Viacom shares were off 3.5 percent, or $1.60, to $44.65 in Wednesday's NYSE 
trading, although analysts attributed the weakness to pessimism in the media 
sector overall following Walt Disney Co.'s announcement late Tuesday that it 
would slash its work force by 4,000, or 3 percent.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


``Plumbers'' for Today's Economy Dominate Online Investor Tournament 
Sponsored by Fast Angels; Eight Companies Work Behind-the-Scenes to Help 
World Act Faster and Smarter

03/28/2001
Business Wire
(Copyright (c) 2001, Business Wire)

LOS ALTOS HILLS, Calif.--(BUSINESS WIRE)--March 28, 2001--The eight 
quarterfinalists in March Money Mayhem, an online investment tournament of 64 
investment options, are in a neck-to-neck battle as the nation's favorite 
investment. Surprisingly, all provide "plumbing" for key sectors of the 
nation's economy. Winners include literal plumbing suppliers like Home Depot, 
but also Internet plumbers (Cisco and Microsoft), transportation plumbers 
(Boeing, UPS), energy plumbers (Exxon Mobil and Enron) and body plumbers 
(Merck). 
Asked "where would you put $1,000?" today, voters in the investor parody of 
college basketball March Madness (www.fastangels.com/marchmayhem/) were 
bullish on the building-block stocks of the economy over the new technology 
companies (e.g. Ariba, eBay, Amazon.com) and non-stock alternatives (e.g. 
cash, Roth IRA, and trips to Disneyland). A prize of $1,000 will go to a 
random on-line voter who predicts the most winners over the three-week 
contest. Voting ends April 2. The contest is sponsored by Fast Angels 
Ventures (www.fastangels.com), a new seed fund for technology entrepreneurs, 
and CBS MarketWatch (www.cbsmarketwatch.com).
"We're seeing the same focus on plumbing in the recent deluge of business 
proposals. Today's entrepreneurs aren't pushing faddish dot-com or 
speculative edge technologies, but new methods to help companies work faster 
and work smarter," said Mark Breier, Fast Angels(TM) Ventures managing 
partner, who has reviewed more than 300 business plans in the three weeks 
since announcing the fund. "Key trends include ideas to move data faster, 
share computers simultaneously and empower mobile users."


CONTACT: For Fast Angels Ventures Gary Hanauer, 510/895-4482 GarHan@aol.com 
13:10 EST MARCH 28, 2001 

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


NIGERIA: Nigeria will break up state power monopoly - minister.

03/28/2001
Reuters English News Service
(C) Reuters Limited 2001.

ABUJA, March 28 (Reuters) - Nigeria said on Wednesday it would end the 
monopoly of state electricity giant NEPA and split it into many different 
companies by the end of the of the year. 
Minister of Power and Steel Segun Agagu told reporters the cabinet approved 
the plan which had been incorporated in a bill to be presented to the 
national assembly.
"The centrepiece of the proposed policy is the unbundling of NEPA into 
several generation, distribution and marketing companies," he said. 
Nigeria suffers from a chronic power shortage that leaves whole areas blacked 
out sometimes for weeks. 
NEPA is already slated for privatisation. The government's formula is to sell 
40 percent to a core investor, retain 40 percent for the state and sell 20 
percent to the public. 
Its target is to generate 4,000MW of electricity by the end of this year 
compared with a current 2,500MW. 
Agagu said eight companies would be created in NEPA's power generation and 
over 20 companies in distribution and marketing. 
"Interested local and foreign companies will be given franchises for 
distribution and marketing of electricity in some states or a combination of 
states," he added. 
Nigeria has 36 states and in Lagos, the richest and most populous, U.S. 
energy giant Enron Corp is already working on a project to supply 270MW of 
electricity. 
The Nigerian minister said in the generation sector, Kainji and Jebba, both 
hydro power stations on the River Niger could be constituted into one 
company. 
"There is no reason why we cannot generate energy in huge quantum in this 
country and sell the same in other countries in the West African sub-region," 
Agagu said. 
"The essence of the new policy is to create a competitive market for 
electricity supply in all the states of the federal republic of Nigeria. 
"We are trying to move away from the inefficient public sector control 
monopoly which NEPA is towards a deregulated market where we have private 
sector participation," he added.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


Enron's unit presents thermal power plan to Aomori gov.

03/28/2001
Kyodo News
Copyright Kyodo News International Inc. 2001

AOMORI, Japan, March 28 -- 
A unit of U.S. energy company Enron Corp. on Wednesday submitted to Aomori 
Gov. Morio Kimura its plan for building a large thermal power plant in the 
village of Rokkasho in the northern Japan prefecture.
Encom Corp. (Japan) President Carey Sloan visited the governor and presented 
the 60-hectare project for a 2-million-kilowatt power plant to be fueled by 
liquefied natural gas (LNG), according to the plan. 
The New York-based affiliate of the Houston-based Enron for power business in 
Japan plans to start constructing the facility in 2004 upon necessary 
administrative approvals and launch its operations in 2007. 
Rokkasho is known as the site of the country's first full-scale nuclear waste 
reprocessing plant. The facility run by Japan Nuclear Fuel Ltd. is set to 
start reprocessing in July 2005. 
According to Encom's plan, the company now is waiting for a reply -- expected 
around June -- from Tohoku Electric Power Co. in order to connect its 
transmission lines to those of the local electric power monopoly. 
Sloan said in a press conference he expects Tohoku Electric to give nod to 
his company's bid to link the lines. 
Kimura issued a statement saying he expects the plan to spur the national 
project to develop the village's 5,300-hectare Mutsu-Ogawara area, where the 
reprocessing plant is located, into an industrial park. 
It is also expected to contribute to boosting the regional economy and 
creating jobs, the statement said.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 







Regulators grant rate hike for utilities
Rates could rise almost 50 percent under CPUC plan



By Myra P. Saefong, CBS.MarketWatch.com 
Last Update: 5:59 PM ET Mar 27, 2001


?
SAN FRANCISCO (CBS.MW) - California power regulators agreed Tuesday to raise 
electricity rates by almost 50 percent to help the state's cash-strapped 
utilities buy adequate power for their customers as the peak summer usage 
season approaches. 








"Today's rate increase is long over due," said Commissioner Richard Bilas, 
prior to the actual vote. The vote came despite objections from hoards of 
protesters outside the meeting in San Francisco to keep power rates stable.
The increase, which was approved 5-0, adds 3 cents per kilowatt hour to rates 
and makes permanent an emergency one cent per kilowatt hour surcharge 
approved on Jan. 4.
Pacific Gas & Electric (PCG: news, msgs, alerts) and Southern California 
Edison (EIX: news, msgs, alerts) have been unable to buy electricity for 
their California customers because they've run up debts of about $13 billion 
paying for power on the open market well above what they received under 
state-capped retail rates. 
Adding another 3 cents per kilowatt hour will "comprehensively address" the 
revenues needed in California to keep the state's lights on, CPUC President 
Loretta Lynch said. 
She stressed that the order gives the utilities the right to collect the 
funds immediately, but that customers won't see the increase "until we design 
new rates." 
"Over 45 percent of residential customers will not experience a further rate 
increase," Lynch said. 
The rate hikes are expected to generate an additional $2.5 billion in annual 
revenue for PG&E and $2.3 billion for Edison. 
California Gov. Gray Davis attempted to distance himself from the move. "The 
PUC's action today was premature because we do not have all the appropriate 
financial numbers necessary to make a decision," Davis said in a statement. 
"If it becomes clear that a rate increase is absolutely necessary for the 
good of the State, I will support one that is fair and do my duty to convince 
Californians of its necessity."
In January, the commission, which is dominated by Davis' appointees, denied 
rate hikes of 26 percent being sought by the utilities. The state instead 
began buying power itself on the expectation it could negotiate better prices 
with out-of-state generators. 
Since then California has spent about $4 billion buying power, wiping out 
more than half of the state's budget surplus. 
Analysts were cautious.
The order "still leaves important questions unanswered and comes with some 
strings attached," Steven Fleishman, an analyst at Merrill Lynch said in a 
research note. The order "deliberately restricts" the extra revenue from 
being used toward the utilities' past power purchase costs, he said. 
Consumer activists said the move is only the beginning and more rate hikes 
can be expected. ?Watch interview.
The commission's meeting Tuesday brought hoards of protestors, whose presence 
and chants of "Rate hikes go away. Make the energy companies pay!" caused 
delays to the proceedings.
But the CPUC's decision will help the power crisis in California, Enron (ENE: 
news, msgs, alerts) CEO Jeff Skilling said Tuesday at the Southern Methodist 
University's Cox School of Business management briefing series in Dallas.
"There's been a need to balance supply and demand and to date I don't think 
anyone has been willing to let the prices rise to help balance supply and 
demand," Skilling said. "So this is a huge step forward in reducing the odds 
of shortfalls."
Davis said Monday that the "tiered pricing could promote the conservation 
California needs if structured properly but was not convinced of that by the 
data made available to him last week." He had hoped that the state's energy 
crisis could be resolved without a rate hike. 
CPUC orders QF payments
The CPUC also ordered California's two biggest utilities to make payments to 
small independent generators, or qualifying facilities, for energy within 15 
days of delivery.
The order directs the utilities to resume payments to QFs within 15 days of 
end of billing period, Commissioner Carl Wood said. If they don't comply, the 
utilities will suffer from penalties equal to the amount owed to the QFs, he 
said.
Wood withdrew, on Monday, his idea for a fixed price payment of $79 per 
megawatt hour. 
During a conference call to note holders late Tuesday, Edison's CFO Ted 
Craver, Jr. said SoCal Edison plans to make interest payments on some of its 
defaulted debts, with the first payment on some commercial paper outstanding 
made around the end of next week. 
Craver also said that with the utility's planned payments and its commitment 
to make interest payments, starting this week, as they come due, SoCal Ed 
will become current on all outstanding interest rate payments.
Meanwhile, the CPUC's order regarding payments to QFs came just as the 
state's power grid operator issued a "Stage Two" power alert throughout 
California, calling for increased consumer conservation. The Independent 
System Operator said 10,500 megawatts of power were offline due to 
maintenance Tuesday and another 2,900 of QF generation remained unavailable.
The CPUC also ordered Tuesday that the utilities hand over the money they've 
collected for power through retail rates in order to cover the costs of the 
state's Department of Water Resources, which has been buying power on their 
behalf since early this year.
The commission will discuss the details of the issue at its continuation 
meeting next Tuesday, Lynch said.
Myra P. Saefong is a reporter for CBS.MarketWatch.com in San Francisco. 








Hefty payday for Enron's top execs
$7 mln bonus for chairman, $5.6 mln to CEO for 2000 



By Lisa Sanders, CBS.MarketWatch.com 
Last Update: 5:22 PM ET Mar 27, 2001


?
DALLAS (CBS.MW) -- Enron's ability to continually transform itself has 
generated strong results for the Houston-based energy company, CEO and 
President Jeffrey Skilling said Tuesday.








His remarks, made to members of the Dallas business community attending 
Southern Methodist University's Cox School of Business management briefing 
series, came on the same day that Enron (ENE: news, msgs, alerts) filed its 
annual proxy statement.
In the proxy, Enron's financially robust 2000 translated into healthy bonuses 
for both Skilling and Chairman Kenneth Lay. Lay's bonus shot up to $7 million 
in 2000 from $3.9 million in 1999, while Skilling took home $5.6 million in 
bonus pay, up from $3 million the previous year. Enron named Skilling CEO in 
February.
The No. 1 buyer and seller of natural gas in the U.S. and the leading 
wholesale power marketer had $100.8 billion in sales in 2000, up from $20.36 
billion in 1997. During the same period, its earnings-per-share increased to 
$1.47 from 87 cents a share, a 25 percent gain, and its market cap climbed to 
$62.5 billion from $12.8 billion.
Last week, Enron's market cap declined on rumors, which the company denied in 
a press release and subsequent conference call, of problems in its broadband 
business. Shares of Enron, which set a 52-week low of $51.51 a share on March 
22, shed $1.02 to close at $60.46 on Tuesday.
On Tuesday, Skilling said he expected bandwidth trading, now a nominal part 
of Enron's overall business, to contribute 10 to 15 percent to the company's 
bottom line in the next four to five years.
In a conference call Friday, Skilling reiterated that Enron remains 
comfortable with its previously announced profit target of $1.70 to $1.75 a 
share in 2001. The average estimate of analysts polled by First Call/Thomson 
Financial is $1.74 a share.
On Tuesday, Skilling maintained his view and also said the company is 
comfortable with expectations for a profit of 45 cents a share in the March 
quarter.
Enron a business maverick
"Enron has changed the way a lot of people think about the energy business," 
Skilling said. "The one good idea is that the traditional, rigid, 
capital-intensive vertically integrated business structures...are breaking 
down."
Skilling, who received a bachelor degree from SMU, said its better to search 
for the highest quality products and assemble them into a package for 
delivery to customers rather than owning them all. He said that the business 
model is superior because it's cheaper and more flexible.
"Virtual integration will beat vertical integration every day," said 
Skilling, predicting that in the future people will work for the system, 
rather than the product, and that physical capital will be replaced with 
intellectual capital. Enron, he said, created the packaging concept back in 
the late 1980s and assembled it in a way that enables energy to be delivered 
at lower costs.
"That's what led to the growth at our company," he said. Skilling said he 
intends for Enron to be the most innovative company in America for years to 
come.
Lisa Sanders is a Dallas-based reporter for CBS.MarketWatch.com.