Utilities Make Own Plans for CO2 Curbs --- Entergy Sets Emissions Cap As Bush 
Climate Policy Remains to Be Resolved
Wall Street Journal, 05/04/01

California and the West Secretary of Energy, Davis Meet on U.S. Plan to Boost 
Conservation Crisis: Federal buildings and military bases, accounting for 
1.5% of state's usage, will cut back.
Los Angeles Times, 05/04/01

Calif Gov Asks 12 Generators To May 9 Energy Crisis Mtg
Dow Jones, 05/04/01

Enron agrees to meet with India committee
Houston Chronicle, 05/04/01 

INTERVIEW:Early Resolution Seen On India Dabhol Pwr Spat
Dow Jones, 05/04/01

India: Enron wants renegotiation meet rescheduled
Business Line (The Hindu), 05/04/01

ENRON'S HOUSTON TEAM TO MEET RENEGOTIATING COMMITTEE
Asia Pulse, 05/04/01

SALVE MAY REPRESENT FEDERAL GOVT ON ENRON NEGOTIATING COMMITTEE
Asia Pulse, 05/04/01 
Enron ready to take part in PPA talk
The Times of India, 05/04/01
Godbole terms of reference not acceptable: DPC
Business Standard, 05/04/01
Outlook: Power failure
The Independent - London, 05/04/01
ScottishPower survives the blackout
The Guardian, 05/04/01
April rough for merger mavens
The Daily Deal, 05/04/01
Companies: European Companies
The Wall Street Journal Europe, 05/04/01

Purchase should boost Ansoft ... 
Pittsburgh Post-Gazette, 05/04/01

Enron's Dabhol to Meet Indian Panel Over $64 Mln Debt (Update1)
Bloomberg, 05/04/01

India Gets $450 Million From World Bank to Push Power Market
Bloomberg, 05/03/01

Senate special counsel said power sellers broke law
Associated Press, 05/03/01




Economy
Utilities Make Own Plans for CO2 Curbs --- Entergy Sets Emissions Cap As Bush 
Climate Policy Remains to Be Resolved
By John J. Fialka
Staff Reporter of The Wall Street Journal

05/04/2001
The Wall Street Journal
A2
(Copyright (c) 2001, Dow Jones & Company, Inc.)

WASHINGTON -- Some major U.S. utilities are beginning to step out ahead of 
the Bush administration on the climate-change issue, developing their own 
plans for curbing emissions of carbon dioxide, the man-made gas thought to be 
contributing to global warming. 
Meanwhile, the White House is under growing pressure to demonstrate that its 
plans to boost energy production can be environmentally sensitive. President 
Bush signed an executive order requiring the federal government to conserve 
energy during periods of peak demand in California and other places facing 
energy shortages.
Mr. Bush also said the federal government would make available power 
generators in case of emergencies. "Conservation has got to be an integral 
part of making sure we've got a reasonable energy policy," Mr. Bush said. 
New Orleans-based Entergy Corp., the nation's third largest utility in terms 
of electricity produced, said that it will will impose a limit on CO2 from 
its 25 power plants that burn natural gas, oil or coal and stay within that 
level of emissions for five years. "We understand that this is a very 
politically contentious subject," said company Vice President Jim Mutch. "If 
other companies do their fair share now, hopefully when there is a regulatory 
scheme, there will be less of a problem." 
By running its plants with greater efficiency, improving the efficiency of 
its electricity and gas transmission systems and engaging in some outside CO2 
reduction efforts, such as planting trees that absorb the gases, Entergy 
hopes to keep its overall CO2 emissions at 50 million tons per year, Mr. 
Mutch said. The company, which derives 61% of its power from fossil fuels, 
will work with the New York-based group Environmental Defense, to make sure 
its efforts are effective and measurable. 
Meanwhile, a coalition of five other electric power companies is calling for 
a mandatory cap on CO2 emissions that would decline annually, if the Bush 
administration develops a national emissions trading system that allows a 
company to decide which technologies to use to reduce CO2 and other 
pollutants. "We're basically planning on a glide path downward" regarding 
emissions limits, explained Mark Irion, a spokesman for the group, which 
includes Enron Corp. and El Paso Energy Corp. of Houston; Calpine Corp. of 
San Jose, Calif.; Trigen Energy Corp. of White Plains, N.Y.; and NiSource 
Inc. of Merrillville, Ind. 
Emissions trading gives companies incentives to introduce new technology, Mr. 
Irion said. Under the trading scheme, which is used currently to address 
sulfur-dioxide pollution, a company that reduces emissions below its target 
level gets trading credits that it can sell to other companies, thus helping 
to offset the costs of new capital investment. Sulfur dioxide plays a major 
role in acid rain. 
The announcements come as the entire U.S. utility industry, which produces 
about a third of the nation's man-made CO2, is engaged in behind-the-scenes 
negotiations with the White House energy task force headed by Vice President 
Cheney over how to set up a meaningful, voluntary system for reducing CO2 
nationwide. 
Meanwhile, private utilities, federally owned entities such as the Tennessee 
Valley Authority, and rural electric cooperatives are trying to develop an 
industry consensus on a voluntary program. 
According to one industry official involved in both discussions, who asked 
not to be identified, one idea of interest to the task force involves 
voluntary contracts that power companies would make with the government 
calling for CO2 emissions cuts. Once signed, the contract's target reductions 
would become mandatory. Called a "soft cap" program, it could become part of 
the U.S. position for the next round of international climate-change talks, 
slated for Bonn, Germany, in July. 
"We have only recently begun to engage the administration," said the 
official. Since March when the Bush administration aroused a furor among 
environmental groups and European allies by announcing it was no longer 
interested in the Kyoto Protocol to curb climate change, it has held a series 
of cabinet-level seminars on climate change, bringing in industry experts and 
a variety of government and outside scientists. 
President Bush will need to have some outline of a new U.S. climate-change 
policy by next month when he goes to Sweden for a summit with leaders of the 
European Union. "We're well aware of the calendar," said one U.S. official. 
Tom Kuhn, president of the Edison Electric Institute, a trade association 
here that represents private-sector utilities, said "I think the [Bush] 
administration is definitely interested in things that they can do to address 
this issue." He noted, however, that it is too early for a 
industry-government consensus on CO2 reduction. "Nobody's agreed upon 
specifics." 
Bob Davis contributed to this article.




Metro Desk
California and the West Secretary of Energy, Davis Meet on U.S. Plan to Boost 
Conservation Crisis: Federal buildings and military bases, accounting for 
1.5% of state's usage, will cut back.
RICHARD SIMON; DAN MORAIN
TIMES STAFF WRITERS

05/04/2001
Los Angeles Times
Home Edition
A-3
Copyright 2001 / The Times Mirror Company

SACRAMENTO -- In a visit meant to underscore the Bush administration's 
heightened concern about the California electricity crisis, Secretary of 
Energy Spencer Abraham met Thursday with Gov. Gray Davis in Sacramento to 
discuss federal energy conservation plans. 
"I think we have an approach that can result in significant savings," Abraham 
told Davis. The energy secretary said he was in California "to gauge what we 
can do to add to what California is already doing."
The trip came after President Bush revealed plans for a series of 
conservation measures for federal buildings and military bases nationwide. 
Those facilities in California account for 1.5% of the state's total energy 
use. Today, Abraham is scheduled to meet with federal officials in San 
Francisco to work out details of the nationwide program for more than 500,000 
federal buildings. 
After meeting with Abraham at the White House earlier Thursday, Bush said: 
"We're worried about blackouts that may occur this summer, and we want to be 
a part of any solutions. This administration is deeply concerned about 
California and its citizens." 
Defending his response to the California crisis, Bush said, "As I said from 
the very beginning of my administration, we'll work to help California in any 
way we can." 
Also Thursday, Davis met with alternative energy producers in an attempt to 
persuade them to continue operations, despite being owed more than $1 billion 
by California's private utilities. 
Alternative energy producers, including oil companies that generate 
electricity as a byproduct of their operations, account for about 27% of the 
electricity consumed in California. Several have stopped producing after the 
utilities could no long afford to pay soaring prices for their power. 
Davis assigned S. David Freeman and former Assemblyman Richard Katz, a Davis 
appointee to a state water board, to be in charge of negotiations. Davis said 
he hoped that the talks could be completed within a week. 
And in a sign that major energy companies may get more involved in the 
California crisis, Kenneth Lay, CEO of the Houston-based energy giant Enron 
Corp., met Thursday with Davis, Assembly Speaker Bob Hertzberg (D-Sherman 
Oaks) and Senate President Pro Tem John Burton (D-San Francisco). 
Meanwhile, Bush on Thursday directed federal agencies to "take appropriate 
actions to conserve energy use at their facilities." 
In California, such measures could include setting thermostats to 78 degrees, 
lowering lighting and turning off escalators during Stage 2 and Stage 3 power 
emergencies, administration officials said. Those occur when the state's 
electricity reserves fall below 5% and 1.5%, respectively, and can trigger 
interruptions in service. 
Bush did not set an energy-saving target. But the Defense Department, one of 
the state's single largest energy consumers--using about 1% of peak 
demand--pledged to reduce peak use by 10% this summer and an additional 5% by 
summer 2002. That would make available 200 megawatts, officials said, enough 
to provide electricity to about 150,000 homes during the summer. 
The federal government accounts for about 1.5% of total energy use across the 
country, making it one of the nation's largest energy consumers, according to 
the Energy Department. 
Bush also offered to make available to the state power-generating units owned 
by the federal government. 
But his efforts failed to mollify Democratic critics, who renewed calls for 
the administration to impose price controls on wholesale electricity. 
"The generating companies are gouging California consumers while the 
president turns his back on us," Sen. Barbara Boxer (D-Calif.) said in a 
statement. 
Rep. Sam Farr (D-Carmel), leader of the California Democratic congressional 
delegation, sent a letter to Vice President Dick Cheney protesting Democrats' 
exclusion from Cheney's meeting this week with California GOP lawmakers. 
"As we head into the high summer demand months, it is unfortunate that you 
have decided to keep Democrats in the dark about the administration's plans 
to deal with the crisis," Farr said. 
Bush's conservation initiative comes after Cheney, who is heading a task 
force on national energy policy, was assailed by some critics for emphasizing 
production over conservation. 
"Conservation has got to be an integral part of making sure we've got a 
reasonable energy policy," Bush said Thursday. "But what the vice president 
was saying is we can't conserve our way to energy independence, nor can we 
conserve our way to having enough energy available. We've got to do both. We 
must conserve, but we've also got to find new sources of energy." 
David M. Nemtzow, president of the Alliance to Save Energy, called the 
directive an "emergency answer to a long-term problem." 
"We need to fix the underlying problem by investing in energy-efficient 
lighting, cooling and controls," he said. "We hope that this crisis will 
encourage the president to increase the budget for energy management rather 
than cut it by 48% as previously proposed." 
Political analysts said the effort was driven by concerns for not only 
electrons but also elections. 
"It's all about political conservation," said Marshall Wittmann, senior 
fellow at the conservative Hudson Institute. 
Thomas E. Mann, senior fellow at the nonpartisan Brookings Institution, 
agreed: "The administration has come to the view that just because they can't 
win California in a presidential election doesn't mean the Republican Party 
can afford to kiss off the largest state in the Union." 
Analysts speculated that the administration came under pressure from 
California Republicans in Congress who worried about perceptions that the 
White House was not being aggressive enough in responding to the crisis. 
As federal officials search for ways that California can avoid blackouts this 
summer, a Woodland Hills-based advocacy group, More Power to You, has 
suggested that the Navy hook its nuclear-powered ships to the state power 
grid to provide energy while in port. 
The Navy has nuclear-powered aircraft carriers and submarines in San Diego 
and Washington state. 
But Navy officials said it is not technologically feasible to use the nuclear 
reactors aboard the ships to provide power for the grid because most of that 
power goes directly to the propulsion systems. 
Even to "capture" power not used for propulsion would require extensive 
construction on shore and retrofitting aboard ship, officials said. Also, 
using ships to provide onshore power could disrupt training and deployment 
schedules, they said. 
* 
Times staff writer Tony Perry contributed to this report.
PHOTO: Gov. Gray Davis and U.S. Energy Secretary Spencer Abraham confer about 
federal plans to assist California in the energy crisis.; ; PHOTOGRAPHER: BOB 
CAREY / Los Angeles Times 





Calif Gov Asks 12 Generators To May 9 Energy Crisis Mtg

05/04/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
(This article was originally published Thursday.) 

LOS ANGELES -(Dow Jones)- California Gov. Gray Davis has invited 12 
electricity and natural-gas generators and marketers to meet with him in 
Sacramento May 9 to discuss the state's energy crisis, according to a press 
release Thursday.
The agenda will include "unpaid debts, credit and the supply of power," the 
release said. 
The governor invited the chief executives of Enron Corp. (ENE), AES Corp. 
(AES), Reliant Energy Inc. (REI), Dynegy Inc. (DYN), Duke Energy Corp. (DUK), 
Mirant Corp. (MIR), Williams Cos. (WMB), Calpine Corp. (CPN), National Energy 
Group Inc. (NEGI), Edison/Mission Energy (EIX), Sempra Energy (SRE) and El 
Paso Corp.'s (EPG) Natural Gas unit, the release said. 
"There will be no discussion about curtailling state investigations or 
litigation," Davis said. "I strongly support the investigations underway by 
the Public Utilities Commission and the attorney general. I am not calling 
off the dogs." 
As previously reported, Duke released a letter Wednesday that it sent to 
Davis saying the company would forgive some of the $110 million it is owed by 
cash-strapped utilities if Davis agreed to drop several state investigations 
into the company's trading practices. 
-By Jessica Berthold, Dow Jones Newswires; 323-658-3872; 
jessica.berthold@dowjones.com



Houston Chronicle
Briefs: Houston & state, 05/04/01 
Enron agrees to meet with India committee
Enron Corp.'s Dabhol Power Co. agreed Thursday to meet with a negotiating 
committee from India's Maharashtra state next week regarding a dispute over 
$64 million in unpaid bills. 
Houston-based Enron said it rejected proposals expected to be the basis of 
the meeting. The Maharashtra State Electricity Board, a state-run utility, 
refused to pay the bills, saying they were too high. Dabhol, the biggest 
foreign-investment project in India, invoked government guarantees against 
nonpayment. 
Enron spokesman John Ambler said that Enron will meet the committee "as a 
matter of courtesy" and won't present proposals of its own. Enron owns 65 
percent of Dabhol. 


INTERVIEW:Early Resolution Seen On India Dabhol Pwr Spat
By Himendra Kumar
Of DOW JONES NEWSWIRES

05/04/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI -(Dow Jones)- A prolonged electricity payment dispute between 
U.S.-based Enron Corp.'s (ENE) Indian unit, the Dabhol Power Co., and the 
Maharashtra State Electricity Board could be resolved within a month, the 
head of an independent energy think tank said Friday. 
The dispute over the controversial 2,184-megawatt, $3-billion DPC project in 
India's western state of Maharashtra came to a head recently when the DPC's 
board authorized the management to proceed with a preliminary notice of 
termination - the first of three steps that lead to the abandonment of the 
project.
Despite the move, Rajendra K. Pachauri, director of the New Delhi-based Tata 
Energy Research Institute, said he is optimistic of a resolution. 
"It's in everybody's interest to come up with a reasonable settlement. I 
think DPC will accept a renegotiated contract because they are in an impasse 
right now," Pachauri told Dow Jones Newswires in an interview. 
Pachauri is also one of the nine members of the committee appointed by the 
Maharashtra state government to renegotiate the MSEB's controversial power 
purchase agreement with DPC. 
"I do hope that within a month the whole thing can be sorted out. DPC wants 
the negotiations to be short and decisive and if all the parties are willing, 
an agreement won't be difficult," he added. 
The project has been mired in financial disputes since its main customer, the 
Maharashtra State Electricity Board, has failed to pay several of its bills. 
Dabhol has come under fire because of the relatively high cost of its power. 
Critics object to Dabhol charging 7.1 rupees ($1=INR46.83) a kilowatt-hour 
for its power, compared with INR1.5/KWh charged by other suppliers. 
The state government has asked the committee to try to negotiate a revised 
agreement within a month. 
The committee's goal is to lower the power tariff and allow the sale of 
excess power to the federal government or its utilities. A restructure of the 
DPC's stakeholding may also be on the agenda. 
As reported, the negotiating committee's first meeting with the DPC 
management scheduled for Saturday has been postponed until 0530 GMT May 11 at 
DPC's request. DPC Must Run Plant At Full Capacity - Pachauri 

Pachauri said that it is in DPC's interest to run its plant at full capacity 
and maximize sales. 
"Their sales won't be maximized unless the price is attractive. They really 
need to bring down the cost to the consumer. Our brief is very clear. We have 
to sit down with them and identify a strategy by which the Dabhol project can 
be viable for everyone," he said. 
"This will involve a complete financial engineering of the DPC. You'd need to 
restructure the project debts and bring down the interest rates (on debts) to 
the current levels in the market," he added. 
The DPC project - the largest single foreign investment in India - has a 
debt-equity ratio of 70:30. 
Pachauri said Dabhol should agree to charging between INR3.00 and 
INR3.25/KWh. "This is a reasonable range and should be acceptable to 
everyone," he said. 
He said if Enron decided to pull out of Dabhol, it wouldn't have a serious 
impact on foreign direct investments into India, particularly in the 
country's power sector. 
Texas-based Enron has a 65% stake in the DPC, and is the project's largest 
shareholder. Other shareholders include the MSEB with 15%, and General 
Electric Co. (GE) and Bechtel Enterprises (X.BTL) with 10% each. 
The DPC currently operates a 740-MW naphtha plant contributing around 0.7% to 
India's installed capacity. Enron has maintained that work will be completed 
by the year-end in the second phase of Dabhol project that will add 1,444 MW 
to its capacity. The plant will switch from naphtha to liquified natural gas 
as a fuel source in 2002. 
-By Himendra Kumar; Dow Jones Newswires; 91-11-461-9426; 
himendra.kumar@dowjones.com




India: Enron wants renegotiation meet rescheduled

05/04/2001
Business Line (The Hindu) 
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire 

MUMBAI, May 3. ENRON, promoter of Dhabol Power Company, has asked for 
rescheduling of its first renegotiation meeting with the State Government and 
Maharashtra State Electricity Board (MSEB) to May 11. The parties were to 
meet on May 5 to begin negotiations. 
"They (Enron) want a longer notice period because they want their lenders and 
shareholders to attend the meeting. And this is a good sign," said a senior 
MSEB official.
"These parties will be coming from all over the world and thus the request 
for postponement," he said. 
The Government had announced the Dabhol project renegotiation committee last 
week. 
The panel's terms of reference include restructuring of the project and 
tariff, finding out if any Central power utilities or States would be willing 
to lift surplus power generated by DPC, and any other issue or aspect it (the 
panel) deems fit to include. 
"Enron has said that they want their lenders to be represented during the 
negotiations. But we (other members except Enron) will meet on May 5, 
irrespective," said a senior State Government official. He, however, did not 
comment on the agenda of the first renegotiation meeting. 
- Our Bureau

ENRON'S HOUSTON TEAM TO MEET RENEGOTIATING COMMITTEE

05/04/2001
Asia Pulse 
(c) Copyright 2001 Asia Pulse PTE Ltd. 

MUMBAI, May 4 Asia Pulse - Enron-promoted Dabhol Power Company today said it 
had agreed to meet the Godbole committee "as a matter of courtesy" and this 
should "in no manner be construed as an open offer from DPC to renegotiate 
the terms of the contract". 
In a statement issued here tonight, the US energy major made it clear that 
the purpose of the meeting with the nine member renegotiating committee was 
"to hear out the panel and understand their thoughts, and not present any 
proposals".
Furthermore, the published terms of the Godbole report did not represent any 
acceptable basis for further discussions, it said adding the company 
constantly maintained that it was open to a dialogue towards resolving 
issues. 
Earlier, the state government sources told PTI that a team of senior 
officials from Enron headquarters in Houston is slated to attend the first 
Godbole renegotiations committee meeting, now to be held on May 11. 
The panel deferred its meeting from May 5 as in a formal communication, DPC 
requested the state government for a suitable date other than the stipulated 
one, they said. 
However, the multinational is yet to send a list of its nominees, who are due 
to arrive next week, they said. 
Meanwhile, the Centre is likely to appoint Solicitor General Harish Salve as 
its representative on the high-power committee to renegotiate the Power 
Purchase Agreement signed between DPC and Maharashtra State Electricity 
Board. 
(PTI) 
04-05 1824


SALVE MAY REPRESENT FEDERAL GOVT ON ENRON NEGOTIATING COMMITTEE

05/04/2001
Asia Pulse 
(c) Copyright 2001 Asia Pulse PTE Ltd. 

NEW DELHI, May 4 Asia Pulse - Solicitor General Harish Salve is likely to be 
named as federal government's representative on the high- power committee 
appointed by Maharashtra government to renegotiate the Power Purchase 
Agreement (PPA) with the US energy giant Enron-promoted Dabhol Power Company 
(DPC). 
According to highly placed government sources, Salve's name has been cleared 
by both ministries of Finance and Power.
The government of the western state of Maharashtra has appointed a 
negotiating committee headed by former bureaucrat Madhav Godbole to 
renegotiate the estranged PPA signed by the Maharashtra State Electricity 
Board (MSEB) and DPC. 
Enron had made opening of talks with Maharashtra conditional on the presence 
of Centre's representative on the negotiating committee. 
Salve would meet secretaries in the ministries of Finance, Power and Law to 
firm up the federal government's stand on the crisis arising out of payment 
defaults by MSEB, sources said adding that the Petroleum secretary is also 
likely to be included in the panel. 
Sources said Enron appeared to be keen on solving the present impasse through 
negotiations judging from Corporation Chairman Kenneth Lay's statement 
yesterday in Houston that the company had no plans to sell its stake in the 
$2.9 billion Dabhol project. 
(PTI) 04-05 1705

Enron ready to take part in PPA talk
Nitin Yeshwantrao

05/04/2001
The Times of India 
Copyright (C) 2001 The Times of India; Source: World Reporter (TM) 
MUMBAI: The Enron management has finally agreed to participate in a 
'discussion' with the Madhav Godbole-led re-negotiation committee set-up to 
facilitate the restructuring of the Power Purchase Agreement (PPA) signed 
between the US power major and the state government. 
Officials of Dabhol Power Company (DPC), a subsidiary of Enron, alongwith 
their team of shareholders and lenders will arrive here on May 11 for talks 
with the nine-member Godbole panel.
Though the DPC spokesperson was reluctant to give a confirmation, a key 
Mantralaya official told The times of India that the team had expressed 
willingness for talks with the experts committee in a bid to end the 
imbroglio. 
Enron's response is viewed as a welcome development to amicably resolve the 
controversy which had been raging for the last few weeks, with the board of 
directors of Enron authorising its India MD K Wade Cline to serve a 
termination notice to MSEB. 
The state government, on its part, too adopted a confrontational position by 
slapping a Rs 401 crore rebate charge on DPC for defaulting on power supply. 
However, the sudden change of heart by the Enron management is largely 
attributed to the stand taken by its local lenders led by Industrial 
Development Bank of India (IDBI) which had recently opposed the move to pull 
out of the project. 
This was in contradiction to the stand taken by the foreign lenders of the 
DPC who were in favour of slamming the brakes on disbursement of funds to 
DPC. 
The Congress-led Democratic Front government had publicly declared that it 
would impress upon the Enron management to renegotiate the PPA as scrapping 
the project would not be in the interest of both the parties. 
Last week, the state government constituted a nine-member panel of experts 
under former bureaucrat Madhav Godbole. Godbole had written to the DPC 
management inviting it for talks to re-negotiate the PPA on May 5. For the 
delayed response from Enron, the meeting has been rescheduled to May 11. 
The issues which would be debated at the meeting include the separation of 
the LNG facility from the power plant, renegotiating LNG supply and shipping 
agreements, redefining the DPC tariff and to convert it into a two-part 
tariff. The Godbole panel will bargain hard for removal of dollar 
denomination in the fixed charge component and to allow the Maharashtra 
government to sell power to third parties.


Godbole terms of reference not acceptable: DPC
Our Corporate Bureau Mumbai

05/04/2001
Business Standard
1
Copyright (c) Business Standard
The Enron-promoted Dabhol Power Company (DPC) has virtually ruled out 
negotiations with the Maharashtra government-appointed Godbole committee to 
renegotiate the tariff for the power project_and perhaps set the stage for 
terminating the controversial $3-billion power project. 
In a statement released on late Thursday evening, DPC said that it was 
prepared to meet the Godbole committee as a matter of courtesy but would not 
present any proposals. Significantly, the company said, "the published terms 
of reference of the Godbole report do not represent an acceptable basis for 
further discussions". It also added: "This meeting should in no manner be 
construed as an open offer from DPC to renegotiate the terms of the contract."
The Godbole panel's terms of reference are to bring down the tariff of the 
2184-mw power project. As a part of the agreement with the Maharashtra State 
Electricity Board (MSEB), DPC is planning to set up a 5-million-tonne LNG 
facility of which only 2.1 million tonne is meant for the power project. The 
terms of reference of the Godbole panel include negotiations for delinking 
the LNG facility from the power plant. The panel has also been armed with 
powers to negotiate on DPC's oft-voiced demand that it should be allowed to 
sell power not needed by MSEB to third parties. 
A senior MSEB official said that, "We will hear out what they have to say. 
However, as long as they have armed themselves with powers to issue the 
termination notice, nothing can be ruled out." 
On April 25, the DPC board at a meeting in London authorised Enron India MD 
Wade Cline to serve a termination notice on MSEB whenever he deemed fit.



Business
Outlook: Power failure

05/04/2001
The Independent - London 
FOREIGN
17
(Copyright 2001 Independent Newspapers (UK) Limited) 
SCOTTISHPOWER has belatedly acknowledged that electricity and water do not 
mix. By the time the group's new chief executive Ian Russell reports his next 
set of results, Southern Water should have safely floated off to a new owner. 
That will leave the group's much- vaunted multi-utility strategy a distant if 
unhappy memory. In fairness, Mr Russell was the first at ScottishPower to 
grasp the nettle, recognising that water customers were no more likely to buy 
their energy from the same place than electricity customers were to get their 
pensions and telephones from the same source. 
The decision to focus on energy and energy alone has at least enabled 
ScottishPower to stop the rot in its core business. Customer defections to 
rival suppliers, which were running at an alarming rate six months ago, have 
now all but stopped. And shorn of trying to be all things to all households, 
ScottishPower can exploit what it is good at. The shake- up in the UK power 
market has meant that generating assets now come cheap so we can expect to 
see ScottishPower adding to its portfolio south of the border. It is also 
clearly interested in further US expansion, having gained a bridgehead with 
the pounds 4bn acquisition of PacifiCorp on the West Coast.
The jury is still out on the PacifiCorp deal. ScottishPower says cost savings 
are ahead of plan - but then the first cuts, including the previous 
management's fleet of company jets and helicopters, are always the easiest 
ones. More seriously, PacifiCorp has been hit by the lethal combination of 
surging demand, insufficient capacity and sky-rocketing wholesale electricity 
prices which has left a pounds 300m hole in its revenues, of which only a 
proportion can be recouped through higher domestic bills. 
Mr Russell wants to build his way out of trouble. Another 1,000 megawatts of 
capacity are coming on stream this year in the US and more will follow. But 
the real question is whether ScottishPower will ever achieve the necessary 
critical mass to stand toe-to-toe with the likes of Enron and E.ON. PowerGen 
bought one UK supply business and one US utility, then found it had run out 
of room to finance any further growth and capitulated to the Germans. 
ScottishPower, with pounds 5bn worth of debt around its neck, is at a similar 
crossroads. Mr Russell says it will just have to concentrate on doing what it 
does best. In the hope that someone with deeper pockets notices?

ScottishPower survives the blackout
SIMON BOWERS

05/04/2001
The Guardian
Copyright (C) 2001 The Guardian; Source: World Reporter (TM)
ScottishPower, Britain's largest electrical utility, yesterday brushed aside 
US power and other problems and claimed that it was making considerable 
progress in reducing its exposure to shortages on the west coast of America. 
Its US business incurred extra costs of almost pounds 300m in the year to 
March, pounds 90m of which were caused by the breaking down of its Hunter 
generator plant in Utah. The 160-day closure forced the company to buy in 
power from other generators - at a time when prices were high.
ScottishPower said that the Hunter plant was now repaired and had been 
supplying customers since last weekend. The company plans to increase its 
generation capacity by 1,000MW, or 10%, in this financial year. A new plant 
in Gadsby, Salt Lake City, was the first to begin generation this week, while 
five more are in construction. 
The company said its profits would continue to be significantly hit by power 
shortages in the US for the next two months, but increased generation 
capacity would reduce exposure by September. 
For the year to March 2001, it posted underlying pre-tax profits of pounds 
628m, down from pounds 736m the previous year and in line with analysts' 
forecasts. However, the City greeted news of a planned restructuring warmly, 
with shares in ScottishPower closing 6.5p higher at 448p. 
A spokesman said that the utility firm was confident of recovering 'most, 
though not all' of the pounds 300m costs incurred during the US power 
shortage through increased charges to customers. 
The proposed increases are subject to court proceedings, though most analysts 
consider ScottishPower to have a strong case. 
Ian Russell, who took over as chief executive in March, said the balance 
between company's power generation and supply divisions had been 'out of 
kilter', and added that in creased generation in the US was helping to 
redress that balance. 
ScottishPower is thought also to be considering acquir ing US firm Enron's 
Portland plant quoted at around Dollars 3bn. 
'When we acquired PacifiCorp [Scottish Power's US business] we said it was a 
platform for further growth,' Mr Russell said. 
'Obviously Portland is right in our own back yard.' 
An acquisition could be funded by the proposed sale of its water business, 
Southern Water, which has proved ex pensive since the introduction of extra 
regulatory requirements. The company said it had received several expressions 
of interest for the business. 
ScottishPower's acquisition of Southern Water formed part of its disastrous 
attempt to establish the company as a multi-utility provider - supplying 
customers not only with power, but with water, fi nancial services (through a 
joint venture with Royal Bank of Scotland) and telecoms (through its partly 
spun-off business Thus). 
Yesterday Mr Russell, who had backed these ambitious plans during his eight 
years at ScottishPower, outlined a more modest vision for the future. 
'You have to limit what you take on,' he said. 
'Right now we are focusing on improving the businesses that we have got.' 
The now aborted plans to diversify across a host of utility services 
contributed to the loss of 200,000 customers in the UK last year in 
ScottishPower's core business. The figure has since stabilised at 3.5m. 
Powergen, the British utility that has agreed to a takeover by German power 
giant E.ON, yesterday said that its pre-tax profits for the first three 
months had fallen to pounds 200m, compared with pounds 233m the previous 
year. 
Turnover was up 49% thanks to expanding UK business and a three months 
contribution from its US acquisition LG&E, though regulatory price caps in 
Britain had held back earnings.



M and A
April rough for merger mavens
by Heidi Nasr

05/04/2001
The Daily Deal
Copyright (c) 2001 The Deal LLC

By month's end, 17 deals were undone worth $11.67 billion, putting merger 
terminations on track to overtake the $15 billion worth of deals canceled in 
the first quarter. April is the cruelest month, or so it is proving for 
merger-minded companies and their advisory teams.
On April 2, three mergers worth $8 billion were canceled. By month's end, the 
pace had barely slowed as 17 deals worth $11.67 billion unraveled. Merger 
terminations in the second quarter were on track to overtake the $15 billion 
of the first quarter. 
Yet the April drop -- 17 compared to an average of 36 a month in the first 
quarter -- points to a contrary trend. Richard Hall, a corporate partner with 
Cravath Swaine & Moore, said the decline in April was related to the overall 
count to date this year. 
"People are going into deals with a reoriented idea of the stock market 
levels," Hall said. "A rising stock market hides a multiplicity of things. 
Whatever is the stated reason, it wouldn't surprise me if the basic problem 
was that people didn't want to do the deals any more with the stock market 
tanking." 
The high dollar value of deals undone in April came from four big 
transactions: Ariba Inc.'s $2.5 billion bid for Agile Software Corp.; FPL 
Group Inc.'s $5.5 billion offer for Entergy Corp.; Sierra Pacific Resources' 
failed $2.1 billion move for Enron Corp.'s Portland General Electric division 
and financier Carl Icahn's doomed $650 million grab at Trans World Airlines 
Inc. 
On the advisory side, the biggest investment banking firms took the biggest 
hits. In April, it was Morgan Stanley's turn. The investment bank led with 
only two deals canceled, but worth $8 billion; the Agile deal and Entergy's 
$6.4 billion transaction, the full value of which was $12.4 billion, 
including assumed debt. 
J.P. Morgan came in second with two canceled deals worth $5.5 billion, with 
nearly all of that value coming from the FPL/Entergy deal as well. Hall said 
most of the failed April deals were simply too much of a stretch in a falling 
market. "What happened is that the bad times in the stock market late last 
year have shaken out the deals that were hard to justify without a frothing 
stock market," he said. 
Hall suggested that even companies where stock prices remained strong were 
wary of what could happen if the market continued to suffer. "With everyone's 
stock price going into the slammer, people went back and questioned the 
rationale for the deal," he said. The Ariba deal fell apart because of a 
steep drop in Ariba's stock, which has suffered as business executives cut 
back on software purchases. The Ariba deal, when first announced, was worth 
$2.55 billion; when it broke up April 2, it was worth only $400 million. 
The stock of Mountain View, Calif. based Ariba fell from $40 a share to $6.53 
during that period. The deal between Florida Power & Light owner FPL Group 
Inc. and New Orleans based Entergy highlighted just the opposite problem -- 
rising stock values in the energy sector. When announced in late July, the 
transaction was worth $6.4 billion. By the time it broke up April 2, the 
booming utilities and energy sectors had lifted the price to $7.9 billion. 
But charges and countercharges of sloppy due diligence killed the merger. The 
marriage would have created the largest U.S. power distribution company. In 
the end, though, FPL complained that Entergy's suddenly lower financial 
projections "destroyed our confidence in [Entergy's] management." Entergy, in 
turn, called the complaint a "totally manufactured issue." 
http://www.thedeal.com


Companies: European Companies

05/04/2001
The Wall Street Journal Europe
5
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Scottish Power's Profit 
For Fiscal Year Drops 15%
LONDON -- Scottish Power PLC reported lower earnings for its fiscal year but 
said it has resolved problems with its U.S. Pacificorp subsidiary and has 
streamlined its domestic business for further growth. 
The U.K. utility declined to confirm or deny reports earlier this week that 
it is considering bidding for Enron Corp.'s Oregon-based subsidiary, Portland 
General. Scottish Power said pretax profit before goodwill, amortization and 
exceptional items for the year ending March 31 fell 15% to GBP 628 million 
(1.01 billion euros) from GBP 736 million a year ago, in line with overall 
analyst expectations. Sales rose to GBP 6.35 billion from GBP 4.12 billion a 
year ago. (Dow Jones) 

BUSINESS
[ Purchase should boost Ansoft ... ]

05/04/2001
Pittsburgh Post-Gazette
ONE STAR
C-13
(Copyright 2001)
Purchase should boost Ansoft 
Ansoft Corp., a South Side software company that helps engineers design chips 
and other electronic components, has agreed to buy a competing 3-D 
electromagnetic modeling product from Agilent Technologies Inc. Terms of the 
agreement were not disclosed. The purchase, according to Ansoft President 
Nick Csendes, means California-based Agilent will no longer compete with 
Ansoft on a product that represents about half of Ansoft's sales. 

Also in business ... 
James A. Cederna has been named chairman of Calgon Carbon Corp. He remains 
president and chief executive officer of the company ... Allegheny Energy 
Inc. said it completed the acquisition of three gas- fired electricity 
generating plants in the Midwest from Enron Corp. Allegheny Energy also said 
it sold 14.26 million shares in a public offering at a price of $48.25 a 
share ... IT Group Inc. won a services contract valued at more than $100 
million from Brooks Air Force Base in Texas ... H.J. Heinz Co. will launch a 
line of frozen single-serving pizza under the Smart Ones Bistro banner and a 
line of barbecue grilling sauces under the Jack Daniel's label. Both products 
are being shipped to stores this month.


Enron's Dabhol to Meet Indian Panel Over $64 Mln Debt (Update1)
2001-05-04 02:40 (New York)

Enron's Dabhol to Meet Indian Panel Over $64 Mln Debt (Update1)

     (Adds the meeting date in the fifth paragraph.)

     Mumbai, May 4 (Bloomberg) -- Enron Corp.'s Dabhol Power Co.
agreed to meet with a negotiating committee from India's
Maharashtra state regarding a dispute over 3 billion rupees ($64
million) in unpaid bills.
     Enron said it rejected proposals expected to be the basis of
the meeting. The Maharashtra State Electricity Board, a state-run
utility, refused to pay the bills, saying they are too high.
Dabhol, the biggest foreign investment project in India, invoked
government guarantees against non-payment.
     ``While we have constantly maintained that we are open to
continuing a dialogue towards resolving issues, this meeting
should in no way be construed as an open offer from DPC to
renegotiate the terms of the contract,'' Enron spokesman John
Ambler said.
     Enron, the world's largest energy trader, will meet the
committee ``as a matter of courtesy'' and won't present proposals
of its own, Ambler said. Houston-based Enron owns 65 percent of
Dabhol.
     The meeting will be held on May 11 in Mumbai, Dabhol
spokesman Jimmy Mogal said.
     Enron Corp. Chairman Ken Lay said this week it's ``not in any
discussion right now'' to sell Dabhol because of the payment
problem. ``I think we will work this problem through in a way that
won't impair our investment.''
     Enron's $3 billion, 740 megawatt-a-year project faced
numerous delays and at one point was canceled after a change of
state government. Enron revived it after agreeing to cut power
prices by 22 percent and to sell a 30 percent stake to the state.
     Enron shares fell $2.15 to $58.35 yesterday.

--Margot Habiby in the Dallas newsroom (214) 740-0873, or
mhabiby@bloomberg.net through the San Francisco newsroom (415) 912-
2980 with reporting by Ravil Shirodkar in Mumbai /dfr/rb

Story illustration: To chart Enron's share movement, see
{ENE US <Equity> HCPI <GO>}.



India Gets $450 Million From World Bank to Push Power Market
2001-05-03 20:16 (New York)

India Gets $450 Million From World Bank to Push Power Market

     Washington, May 3 (Bloomberg) -- India will get $450 million
from the World Bank to boost interstate power trading and
coordination among utilities, the bank said.
     The new loan, part of a $1.3 billion project, comes as India
is both trying to attract new investment in power production and
delivery, and squabbling openly with its highest profile foreign
investor, Enron Corp., over its Dabhol power plant.
     The state government's electricity board has refused to pay
Enron's bills, saying they're too high.
     With this loan, the World Bank said it aims to speed changes
in power regulation to provide more reliable electricity to more
of India's one billion people. India uses only 3 percent the power
per person the U.S. does, and the lack of reliable power is blamed
for its chronic poverty.
     By linking state utilities under this program, dubbed Power
Grid, the World Bank says it will help states cut loose from
costly power subsidies and bring cheaper electricity to more
people.
     ``Power Grid is  moving  India towards an interconnected
national grid -- a win-win  scenario  for  both  customers and
suppliers,'' said Kari Nyman, task leader for the project. ``The
growth of Power Grid and the success of state power reforms are
interdependent.''
     Specifically, this loan will be used to build the
transmission systems to transfer power from one utility's grid to
another, and help build the market so that utilities can contract,
trade and move power across state boundaries.
     Power trading will allow areas with insufficient electricity
to purchase power from states with an abundant supply, the bank
said.

--Mark Drajem in Washington (202) 624-1964 or
mdrajem@bloomberg.net /jo



Senate special counsel said power sellers broke law
By DON THOMPSON
Associated Press Writer

05/03/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.
SACRAMENTO (AP) - A Senate investigatory committee's new lawyer said Thursday 
he is convinced power generators acted illegally to drive up California's 
energy prices. 
Meanwhile, the San Joaquin District Attorney's office joined the Senate 
investigation into whether electricity suppliers conspired to fix electricity 
prices - something they adamantly deny.
Sen. Joe Dunn, D-Garden Grove, who chairs the Senate Select Committee to 
Investigate Price Manipulation of the Wholesale Energy Market, said his goal 
is to create a statewide network of state and local investigations into the 
causes behind the power shortage and spiraling cost. 
He named plaintiff's attorney Laurence Drivon of Stockton special legal 
counsel to the committee. Drivon will work for the committee for free, 
spending about four days a week on the job initially. 
Drivon said his initial review of thousands of power-related documents either 
already public or made available to the committee by the state's five large 
generators leads him to believe "it is likely there was some criminal 
activity." He would not elaborate. 
San Joaquin County Supervising Deputy District Attorney Franklin Stephenson 
said three experienced investigators from his office will help the committee 
probe whether there was illegal price-fixing, antitrust violations, or theft 
of public funds by public or private electric generators. 
Stephenson said his office started its investigation April 11, but decided to 
join forces with the Senate panel to avoid duplicating efforts and to get 
access to documents provided to the committee. 
The California Independent System Operator, which runs the state's power 
grid, has agreed to supply the committee with confidential documents under 
subpoena, Dunn said. The committee will likely subpoena other documents that 
generators refuse to provide, he said. 
The committee has broadened its document review to include Enron Corp. and 
other power traders, along with in addition to power generators Duke Energy, 
Dynegy Inc., Mirant Inc., Reliant Energy Inc. and Williams Cos., Dunn said.