COMMODITIES & AGRICULTURE - Soft commodity traders find the going hard.
Financial Times, 07/03/01

GLOBAL INVESTING - Enron looks to make power play in continental Europe.
Financial Times, 07/03/01

COMPANY BUYS SOME ASSETS FROM ENRON FOR $120 MILLION
The New York Times, 07/03/01

Crude Oil Transport Buys Plant, Pipelines from Houston-Based Energy Firm
KRTBN Knight-Ridder Tribune Business News: Houston Chronicle - Texas, 07/03/01

Ads Brawl in a Never-Ending Political Season
The New York Times, 07/03/01

JAPAN: S.Korea SAROK buys 10,000 tns of western aluminium.
Reuters English News Service, 07/03/01

India: FIs, banks favour AES taking over Dabhol
Business Line (The Hindu), 07/03/01

India: MSEB asked to prove confidentiality of Enron papers
Business Line (The Hindu), 07/03/01

India: New power Bill set to free captive generation
Business Line (The Hindu), 07/03/01

India Inc steps up social works, but ...
The Economic Times, 07/03/01

Cheney raised Dabhol issue with Sonia
The Times of India, 07/03/01

CM, Pawar flayed for contradicting views on Enron
The Times of India, 07/03/01

INDIAN FIs READY TO TAKEOVER DABHOL POWER, BUT WILL NOT RUN IT
Asia Pulse, 07/03/01

Three US firms in talks with Indian lenders to take over DPC
Business Standard, 07/03/01

Selected details from state's unedited power contracts, at-a-glance
Associated Press Newswires, 07/02/01

SMARTMONEY.COM: What Will the Second Half Bring?
Dow Jones News Service, 07/02/01

USA: Duke denies using plant to sway Calif. power prices.
Reuters English News Service, 07/02/01

State controller releases unedited power contracts
Associated Press Newswires, 07/02/01

Oregon Lawmakers Pass Bill To Delay Elec Dereg 5 Months
Dow Jones Energy Service, 07/02/01



COMMODITIES & AGRICULTURE - Soft commodity traders find the going hard.
By ADRIENNE ROBERTS.

07/03/2001
Financial Times
(c) 2001 Financial Times Limited . All Rights Reserved

Soft commodity traders find the going hard - Barriers to entry are daunting 
and the big incumbents are facing months of adaptation and belt tightening, 
says Adrienne Roberts. 
Profit margins in soft commodities trading are wafer-thin. "The margins are 
to be found between the wallpaper and the wall," said the head of a European 
trading business.
"We are barely making a profit in cocoa, and we are one of the biggest 
participants in the market," said an executive at a leading London futures 
brokerage. 
Enron, the largest natural gas and electricity trading house in the US, 
announced recently that it is closing its London-based cocoa, sugar and 
coffee brokerage business following an internal company review. 
Members of the industry think the brokerage, Rudolf Wolff, was failing to 
generate enough cash. 
"US companies tend to be much more aggressive on the kind of returns they 
want from each desk. I'm not surprised Enron decided to pack it in," said a 
US trader. 
Enron says it is continuing to look into other opportunities in the softs 
industry. 
Part of the problem is depressed markets, with low prices and thin volumes. 
"Coffee is at a 30-year low, cocoa is flat at this time of year - I would say 
it's extremely challenging unless you have critical mass," said the head of a 
London softs desk. "Merchants are the source of our income. If they're 
squeezed, they squeeze everyone." 
Business conditions have been particularly difficult, for merchants sourcing 
from Cote d'Ivoire, a major coffee producer and the world's largest cocoa 
grower. Political upheaval and industry restructuring have reduced the 
volumes of stock coming on to the physical market. 
"The only answer is greater efficiency; lower costs," said a manager at a 
leading soft commodities merchant. 
Customers found a way of cutting their brokerage costs late last year when 
the London International Financial Futures and Options Exchange took its 
commodity products electronic. 
Customers can now ask their brokers to provide them with trading screens, 
with uncomfortable effects on brokers' execution fees. 
A year ago, a client who wanted to buy 10 lots of coffee might telephone his 
broker, get some advice, hear the latest on the weather in Brazil or politics 
in Cote d'Ivoire, and have his trade executed by the broker. 
Now the client might connect directly to Liffe, put through his own trade 
electronically and receive the documentation via the web. He may not speak to 
his broker at all. 
Brokers earn a fee for providing the screens, but not as much as they would 
from execution. 
"Margins are under tremendous pressure in the futures business because of the 
move to electronic trading," said an executive at a London bank. 
"You're seeing the tip of the iceberg now. If electronic trading is having 
such a major effect on brokers in the softs market, what does it mean when 
metals and energy go electronic?" 
The execution and advice functions, once part of the same package, have been 
separated. The question of where these clients will go for advice and what 
they are prepared to pay for it has not yet been answered. 
"The key to this business is volume," said Brian de Clare at ABN Amro. "Your 
incremental cost is negligible - putting through 100,000 lots costs pretty 
much the same as 500,000 lots. High volumes, in conjunction with good 
service, will determine who's going to get the lion's share of the business 
and who won't." 
ABN Amro is one of the few participants in the industry that is expanding its 
softs business and recruiting. 
Brokers think more people will begin dropping out of the market and there 
will be consolidation among those in the industry. There are rumours that 
Truxo, which belongs to the Neumann group, is thinking of withdrawing from 
clearing customer business. 
Head counts have come down since the demise of the open outcry trading pit, 
but some businesses are looking to streamline further. 
Commodities brokers that trade on the floor might have from four to seven 
support staff to each trader. In the softs business "we're now starting to 
see that people who were in the office are not needed to the same degree 
because people have got their own screens", said one. 
There is not much relief in sight. For smaller brokers, the barriers to entry 
are increasingly daunting. For the big incumbents there may be many months of 
adaptation and belt tightening ahead. 
(c) Copyright Financial Times Ltd. All rights reserved. 
http://www.ft.com.

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




GLOBAL INVESTING - Enron looks to make power play in continental Europe.
By JULIE EARLE.

07/03/2001
Financial Times
(c) 2001 Financial Times Limited . All Rights Reserved

Ten years ago Enron, the US energy giant, derived its profit purely from its 
home market and from a few projects in the UK. It operated pipelines and 
produced power. 
Today, the Houston-based company has recreated itself as a global energy 
merchant, selling and delivering gas and electricity, and its profits are 
increasingly produced offshore.
Having consolidated its position in the UK, Enron is making a big push into 
continental Europe to capture the growth potential in deregulating energy 
markets. 
The company moved into the energy selling business with the deregulation in 
the US of gas in 1994 and electricity in 1996. It now has projects in more 
than 40 countries. The change in strategy, away from owning infrastructure 
and towards energy selling, has seen its earnings drift away from pipelines 
in the US towards a rapidly growing wholesale gas and power business. 
Enron does not release its revenue breakdown but it is clear from its volumes 
that the wholesale unit - which involves energy trading and marketing and 
risk management services - generates about 85 per cent of the company's 
profits. 
A third of the company's wholesale business comes from Europe, including the 
UK, and Enron is focused on growing in France and Europe as a whole. Its 
pipeline business in the US, once the engine of its growth, now comprises 
four interstate natural gas pipelines and represents less than 10 per cent of 
earnings. 
Enron uses its assets to supply customer power needs. It also has power 
stations in the US, UK, Italy, Poland, Turkey and Spain. 
Enron is aggressively eyeing Germany, France, the UK and the Nordic region 
for opportunities offered by deregulation. 
The company has seen growth quadruple in its wholesale business in Europe in 
the past year alone. Enron does not reveal a geographical breakdown of its 
revenue but its physical volumes of gas traded in Europe leapt from 2,469bn 
btu (British thermal units) of gas a day in the first quarter of 1999 to 
8,699bn btu in the same period a year later. 
Growth in electricity traded was even stronger, jumping from 7,844 megawatt 
hours in 1999 to 36,339 in the first quarter of last year. Those figures also 
include small gas and electricity volumes for Australia and Japan, which are 
relatively new markets for Enron. 
Ray Niles, an analyst for Salomon Smith Barney in New York, says that while 
the UK was important, continental Europe was the key prize. The total gas 
power market in the US is worth $300bn in revenue while Europe is worth 
$250bn. Analysts will be looking to Enron's second quarter results, due on 
July 12, after the company posted $406m in first-quarter profits, a 20 per 
cent increase. Key areas of interest are likely to centre on its wholesale 
business in Europe. 
(c) Copyright Financial Times Ltd. All rights reserved. 
http://www.ft.com.

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


Business/Financial Desk; Section C
COMPANY NEWS
COMPANY BUYS SOME ASSETS FROM ENRON FOR $120 MILLION
Reuters

07/03/2001
The New York Times
Page 4, Column 1
c. 2001 New York Times Company

EOTT Energy Partners said yesterday that it paid $120 million for energy 
assets from affiliates of the energy marketer and trader, Enron. EOTT, based 
in Houston, has bought a hydrocarbon processing complex in Morgan's Point, 
Tex., and a liquids pipeline grid system, as well as a natural gas liquids 
storage facility. EOTT also entered into a 10-year agreement for production 
from the hydrocarbon processing complex, and arranged a 10-year storage and 
transportation agreement for use of the pipeline and storage systems. Dana 
Gibbs, president of EOTT Energy Corporation, a general partner of EOTT Energy 
Partners, said that the acquisition would add to earnings.

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


Crude Oil Transport Buys Plant, Pipelines from Houston-Based Energy Firm
Nelson Antosh

07/03/2001
KRTBN Knight-Ridder Tribune Business News: Houston Chronicle - Texas
Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World 
Reporter (TM)

EOTT Energy Partners said Monday that it is paying Enron Corp. approximately 
$120 million for an MTBE plant in Morgan's Point, a natural gas liquids 
storage facility in Mont Belvieu and a pipeline grid for carrying the 
liquids. 
The processing facility, which averages 14,000 to 15,000 barrels per day of 
the gasoline additive, properly known as methyl tertiary butyl ether, is one 
of the largest plants of its type in the United States. It also produces a 
smaller quantity of isobutylene.
The pipeline grid, which totals 240 miles of pipe, connects the storage 
facility in Mont Belvieu to the MTBE plant, and to similar plants along the 
Houston Ship Channel. 
The natural gas liquids storage facility has 10 million barrels of capacity. 
Simultaneously with the purchase, EOTT signed a 10-year agreement to sell the 
production from the MTBE plant to Enron, plus a 10-year storage and 
transportation agreement for the use of the storage facility and pipelines. 
This agreement has Enron providing the feedstock and taking the plant's 
output, paying EOTT a fee for producing the fuel additive. 
The acquisition provides greater diversity for EOTT Energy Partners, which is 
a major marketer and transporter of crude, said spokeswoman Gina Taylor. The 
deal will boost earnings and provide stable cash flows without exposure to 
commodity markets and prices, said Dana Gibbs, the president of EOTT Energy, 
its general partner. 
The partnership's common units, which are traded on the New York Stock 
Exchange, gained 15 cents to close Monday at $18.55. 
EOTT Energy Partners is a publicly traded company whose general partner is a 
100 percent-owned subsidiary of Enron.

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



National Desk; Section A
Ads Brawl in a Never-Ending Political Season
By ALISON MITCHELL

07/03/2001
The New York Times
Page 13, Column 4
c. 2001 New York Times Company

WASHINGTON, July 1 -- With jittery House Republicans complaining that 
President Bush is losing the important opening skirmishes over energy policy, 
a political rescue squad has hit the California airwaves. 
A new group, the American Taxpayers Alliance, led by Scott Reed, the campaign 
manager for Bob Dole's 1996 presidential race, began running 30-second 
commercials in California a few weeks ago blaming the state's Democratic 
governor for the state's power problems.
''Grayouts from Gray Davis,'' the tagline of the television advertisements 
says. 
Mr. Reed said his group, whose donors he would not name, had spent $2 million 
on the commercials. 
Another new coalition is also preparing advertisements on the energy front, 
taking on environmentalists for standing in the way of energy production. The 
coalition, the 21st Century Energy Project, was assembled by Ed Gillespie, a 
former campaign strategist for President Bush. And supporters and opponents 
of patients' rights legislation before Congress are taking to the airwaves in 
the Congressional recess. 
The barrage of commercials shows that the permanent campaign that was the 
hallmark of the Clinton years is here to stay. Mr. Bush may have promised to 
change the tone in Washington and end the divisive mentality of constant 
confrontation, but the year-round media battle over issues and ideas has 
never stopped. And some of his former campaign advisers and strategists are 
in the fray. 
The volume of advertisements was even intense during the first 100 days of 
the Bush presidency, usually a time of relative peace in politics. 
''There was significantly more television advertising in the first six months 
of this administration than there was in the past,'' said Ken Goldstein, a 
professor of political science at the University of Wisconsin, who studies 
such trends. 
The Democratic National Committee is unabashedly on a war footing, although 
the size of its advertising purchases -- several hundred thousand dollars' 
worth this year -- has not matched the volume of its oratory. 
The Democrats marked Mr. Bush's first 100 days with a commercial featuring a 
winsome blond tyke holding up a glass and cooing, ''May I please have some 
more arsenic in my water, Mommy?'' Last week, the Democratic National 
Committee broadcast a new spot, saying, ''Insurance companies. H.M.O.'s. Big 
corporations. They've contributed $51 million to Bush and the Republicans. 
And now Bush says he'll veto a real patients' bill of rights.'' 
Terry McAuliffe, chairman of the Democratic National Committee, is boastful 
about such early advertising. ''It's never been done before,'' he said, 
promising ''a very aggressive full-time campaign.'' 
The Republican National Committee has so far resisted going on the air so 
early before the midterm elections. 
''It's a judgment call you have to make -- whether paid media is best to 
spend now, next year or whenever,'' said Trent Duffy, a party spokesman. 
''You might think it's corny,'' Mr. Duffy added, ''but it's a part of the 
president changing the tone.'' 
One White House official said Mr. Bush's political team did not believe that 
commercials this early in a political cycle had any lasting effect. And he 
said the fact that an array of industries and Bush allies were on the air 
also made it easy for the Republican National Committee to stay quiet. 
''If other parties are out there making the same point,'' the official said, 
''why spend your own money?'' 
Federal laws leave issue advertisements largely unregulated unless there is 
coordination between a group and a candidate or party. But the standard for 
proving coordination is high. 
''There are so many reliable allies out there, you don't need to 
coordinate,'' said Ken Gross, an expert in election law. ''The party 
committee can put up on its Web site what its agenda is and the outside 
groups can go to town.'' 
And so they have, from the earliest days of the Bush presidency. The Sierra 
Club went on radio and television in January to fight the nomination of Gale 
A. Norton as interior secretary. One advertisement called Ms. Norton ''an 
anti-environmental extremist who could divide us, who is out of step with the 
majority of Americans.'' 
The Republican Majority Issues Committee, using mirror-image language, 
defended the nomination of John Ashcroft for attorney general with television 
advertisements that proclaimed, ''Party partisan extremists won't give our 
new president a new chance.'' 
Some groups choose to give their allies in the White House or Congress a 
heads-up when they take to the airwaves. Mark Lampkin, a former aide in the 
Bush campaign, informed the White House when a coalition he worked with, 
Americans for Better Education, ran two rounds of radio advertisements to 
promote Mr. Bush's education program. 
''To protect both sides of the equation,'' Mr. Lampkin said, ''we were very 
conscious of not discussing these things or having a lot of interaction.'' 
Stephen Moore, whose Club for Growth ran television advertisements promoting 
the president's tax cut, said he deliberately did not have contact with 
either the White House or Republican leaders in Congress. 
''We want to give them plausible deniability so they can say we have no idea 
they are going to attack Specter,'' Mr. Moore said, referring to Senator 
Arlen Specter, Republican of Pennsylvania. 
One round of the advertisements lampooned, as friends of the Internal Revenue 
Service, Republican Senate moderates who were skeptical of the tax cut, 
including Mr. Specter, Lincoln Chafee of Rhode Island and James M. Jeffords 
of Vermont, before he became an independent. 
While the Democrats' positions are often amplified by groups like the 
environmental and labor movements, Congressional Republicans have made clear 
in recent years that they expect industry allies to be on the air creating 
public support for votes in their favor. 
A Republican strategist said Representative Tom DeLay of Texas, the majority 
whip, had recently told officials of the energy industry that Republicans 
were not here to defend them and that they needed to defend themselves. Mr. 
DeLay, the strategist said, warned the officials that they were in danger of 
losing the public relations war. 
Asked about those warnings, Emily Miller, a spokeswoman for Mr. DeLay, said 
energy officials were ''one group of many'' that Mr. DeLay had talked to as 
energy-policy point man in the Republican leadership. 
''Congressman DeLay has been telling everyone about the need for us to do a 
better job in communicating our energy message and the need for a 
comprehensive national energy policy,'' Ms. Miller said. 
Sometimes because of the web of relationships in Washington and minimal 
disclosure requirements, it is difficult to tell when an issue advocacy 
effort is actually an industry effort. 
Mr. Reed says his American Taxpayers Alliance has more than 10,000 donors and 
is on a political mission: to shield vulnerable Congressional Republicans 
from any blame for how Washington responds to California's energy crisis and 
to put the focus on Mr. Davis. 
''We could single-handedly lose the House if California gets blown away,'' 
Mr. Reed said. 
Yet it is also the case, several Republicans said, that energy interests have 
contributed to Mr. Reed's advertising campaign. 
Alex Castellanos, the maker of the advertisements, is the head of National 
Media, a firm that also produced a radio and television spot this spring for 
Arctic Power, a group pushing Mr. Bush's call for drilling in the Arctic 
National Wildlife Refuge. 
Mr. Castellanos, who produced the Republican National Committee's 
advertisements in the last presidential campaign, said in a brief interview 
that he did not discuss his clients. 
Mr. Gillespie, whose 21st Century Energy Project is planning a television 
campaign, also represents the Enron Corporation, the nation's biggest 
electricity trader. He said the two accounts were separate. 
He said his group was reacting because it believed that the environmental 
groups had been on the air unchallenged. 
''There has been a vacuum in the energy debate,'' he said, ''and the liberal 
groups like the Sierra Club and the Natural Resources Defense Council, who 
are not sufficiently understood to be pawns of the Democratic National 
Committee, have had a free ride in this debate.'' 
Phil Clapp, president of the National Environmental Trust, said 
environmentalists started advertising because they had watched industry pour 
millions of dollars into such campaigns before. 
''We fully expect that on a variety of environmental issues ranging from 
energy to the Clean Air Act,'' Mr. Clapp said, ''that we will see these kinds 
of industry campaigns, and we felt it was best to be there first.''

Photo: Political contests have long been settled, but commercials on 
political issues, like this one attacking patients' rights legislation, 
continue. 

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



JAPAN: S.Korea SAROK buys 10,000 tns of western aluminium.

07/03/2001
Reuters English News Service
(C) Reuters Limited 2001.

TOKYO, July 3 (Reuters) - South Korea's Supply Administration (SAROK) bought 
10,000 tonnes of western primary aluminium ingots late last week from Samsung 
Corp and Enron Corp , traders said on Tuesday. 
The government procurement body bought 5,000 tonnes from Enron last Thursday 
at $1,509 a tonne on a cost-insurance-freight basis to the southeastern port 
of Pusan, a trade source in Seoul said.
The administration had bought another 5,000 tonnes from Samsung at $1,501.89 
a tonne, CIF, to the western port of Inchon, he said. 
Premiums were estimated at about $47-$55 a tonne over the London Metal 
Exchange (LME) cash prices, another source said. 
Shipment was set for within two months after the suppliers received a letter 
of credit from SAROK, he said.

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


India: FIs, banks favour AES taking over Dabhol

07/03/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

BANGALORE, July 2. FINANCIAL institutions (FIs) and banks have indicated that 
they would be favourably inclined to a takeover of the Dabhol Power Company's 
(DPC) equity by another American energy major, AES. AES has already indicated 
that it could takeover Enron's equity and run the power plant. 
FI sources said here that this takeover would be in the best interests of all 
the parties involved in the project, including consumers. This was in view of 
AES's experiences in Orissa. AES operates the Orissa Power Generation 
Corporation Ltd in which it has a 49 per cent stake.
AES also runs a distribution company - Centco, in that State. 
The sources said that takeover by AES could also help DPC reduce some of the 
debt financing costs - both in phase one and phase two. The debt portion in 
phase one (826 MW) is about $644 million. 
In phase two (1,624 MW) the debt financing component is about $1.414 billion. 
All these loans have been raised at interest rates in the region of 250-350 
basis points over the LIBOR. In the second phase especially, the debt 
financing costs were high since it came close on the heels of the Pokhran 
nuclear test. 
The sources said that if these loans could be refinanced, then the interest 
burden on the project could be brought down substantially. 
The sources estimated that given the credit rating of AES in international 
financial markets, the DPC loans could be refinanced at spreads of just 100 
basis points over LIBOR. 
Besides, rates for external commercial borrowings have considerably softened 
in the last few months. In fact, the last few loans that have been raised in 
the international markets by top Indian corporates without sovereign 
guarantees have all been at spreads of under 100 basis points. 
The sources said that the AES takeover could also stave off invocation of the 
deferred payment guarantees (DPG). In both phases, the guarantee obligations 
of the domestic FIs and public sector banks are close to $800 million. 
Technically, foreign creditors could invoke these guarantees in the event of 
payment defaults by DPC. In addition, FIs and banks have direct exposure of 
about $429 million in both phases. 
The sources said that invocation of the guarantees and a simultaneous 
classification of loans into non-performing assets, would hurt the balance 
sheets of the FIs as well as the banks. The banks likely to be impacted 
include the State Bank of India and Canara Bank which have participated in 
both the foreign currency as well as the rupee loan syndications of DPC. 
The sources said that the only alternative to prevent any drastic impact on 
the FIs was to either find a resolution to the current stand-off between MSEB 
and Enron or allow other companies, acceptable to lending institutions to buy 
out the DPC equity from Enron. 
The sources said that taking over the management of DPC could be considered 
only as a last resort by the FIs. This can be technically done, since the FIs 
have a physical asset cover on the fixed assets of DPC on both phase one and 
phase two as part of loan and guarantee covenants. 
C. Shivkumar

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


India: MSEB asked to prove confidentiality of Enron papers

07/03/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

MUMBAI, July 2. THE Maharashtra Electricity Regulatory Commission (MERC) has 
given the State electricity board two weeks to prove the confidentiality of 
documents related to Enron's Dabhol power project, at the hearing of a 
petition filed by Prayas, a Pune- based non-government organisation. 
The commission has also asked MSEB to clarify its stand on MERC making the 
documents public.
Prayas had filed a petition asking for the status and copies of various power 
purchase agreements signed by the board with independent power producers, 
including Dabhol Power Company. 
MSEB, in turn, had said that DPC had claimed contractual confidentiality over 
several documents which could not be made public. MERC had given the board 
four weeks to submit the relevant documents. 
The commission has now given the board an additional two weeks to submit the 
documents. 
Our Bureau

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


India: New power Bill set to free captive generation

07/03/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

MUMBAI, July 2. THE Union Power Ministry is thinking of completely freeing 
captive power generation. Mr Ajay Shankar, Joint Secretary, Union Power 
Ministry, said here that the Electricity Bill, which is likely to be 
introduced in Parliament "soon", would liberalise captive generation. 
"To ensure this, the Centre is in the process of giving guidelines to the 
State Governments under the present laws and will provide for it under the 
new law," Mr Shankar said.
Mr Shankar urged industry to invest in transmission and distribution to boost 
power sector reforms. 
Speaking to newspersons after an interactive session with industry 
representatives organised by the Indian Merchants' Chamber here on Monday, Mr 
Shankar said the Government would push for privatisation of distribution in 
the Electricity Bill. 
Speaking at the function, the State Energy Secretary, Mr V.M. Lal, said the 
Maharashtra State Electricity Board was still the best in the country "minus 
Enron". "All the problems created by that project (Dabhol) are coming in the 
way of reforming the power sector in the State," Mr Lal said. 
Mr Adi Engineer, Managing Director, Tata Power, said the most important thing 
in reforming the sector was speed. "Debate alone is not enough. 
What we need is speed. And, instead of difficult ones, the Government should 
start with easier propositions in transmission and distribution. 
For example, islands of industrial activity such as Nagpur could be 
privatised first. Besides, the Government should also de-politicise new 
projects," he added. 
Mr Shankar said the second part of the Montek Singh Ahluwalia report on power 
sector restructuring is expected shortly, while an "empowered committee", 
including Mr Suresh Prabhu, Union Power Minister, is looking into the 
implementation of the first part of the report, he said. 
The Secretary declined comment on the "active role of facilitator" being 
played by the Centre in the Enron renegotiation process. 
He also said that the metering of 11 KV stations across the country would be 
completed by March 2002 while metering of other customers would be completed 
within two years. 
Our Bureau

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


India Inc steps up social works, but ...
Shalini Singh

07/03/2001
The Economic Times
Copyright (C) 2001 The Economic Times; Source: World Reporter (TM)

AT A recent investor meet, Tata Steel MD J J Irani asked his investors if 
they felt the company should reconsider its social work profile. The 
unanimous response was to step up investments in the area. 
The rationale: a social return on capital with a clear impact on the 
bottomline.
``You cant be an island of prosperity in a sea of poverty, says Tisco 
spokesperson Shakti Sharma. ``It creates a social pressure on the company, 
she adds. 
A fortnight ago, on June 22, the day after the Kaduldi Express crashed into 
the river in remote Kadalundi in Kerala, among the people who rushed to the 
site of the disaster were two teams from the Kozhikode operations of the 
cellular phone company, Escotel. 
And in the dead of night, they set up an antenna on a coconut tree. By 
midnight, survivors, rescue workers, medics, policemen and even railway 
minister Nitish Kumar were using the jerry-rigged mobile phone infrastructure 
to call friends, relatives and colleagues all for free. 
On January 26, when Gujarat was flattened in 90 seconds by the earthquake, a 
free phone facility set up by Care India, Bharti BT and Cisco for domestic 
and overseas calls provided the most immediate emotional relief for relatives 
anxious for news about their families. 
Increasingly, Corporate India is becoming conscious of being a good citizen. 
And its discovering, to its surprise, that this image makeover effort 
actually makes a mark on people from all walks of life. 
This has driven industry chambers to take time out from lobbying ministers 
and hosting cocktail lunches to demonstrate interest in social development. 
CII has committed Rs 100 crore to help 26 quake-hit villages in Gujarat. It 
has also set up a `disaster management committee this year. And Ficci 
partners CARE to rebuild at least 10,000 homes in the state. 
With greater corporate involvement in socially helpful activity, CARE has 
raised $28 million for the rehabilitation of 30 villages in the worst 
affected areas of Gujarat. 
Of this, Care India director Tom Alcedo says, Ficci mobilised about 15 to 20 
per cent from its members. 
This human face of India Inc appears to be confined largely to emergency 
relief, though. 
In Gujarat, for instance, Alcedo says the corporate sector displayed more 
compassion initially, but dropped out in the rehabilitation stage. 
But NGOs say firms have realised that long-term social development could 
boost bottomlines as well. 
The Tata Group understood this long ago the social cell at Tata Steel has an 
annual budget of Rs 38 crore, says Mrs Sharma. 
Alcedo says, ``Enron got involved in community development in Maharashtra and 
Gujarat because it realised that overlooking social development issues in 
Dabhol had caused a lot of strife. 
Today, corporate compassion is motivated largely by tax breaks and publicity 
mileage rather than in sustained community development work which doesnt 
attract as much media attention.

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


Cheney raised Dabhol issue with Sonia
The Times of India News Service

07/03/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)

NEW DELHI: US vice-president Dick Cheney expressed concern over the ongoing 
dispute between the Maharashtra government and US power giant Enron, promoter 
of the Dabhol Power Project, during his meeting with Congress president Sonia 
Gandhi in Washington, DC, last week. 
Senior Congress leader Manmohan Singh, who had accompanied Sonia on her US 
visit, briefed presspersons Monday about Sonia's first foreign trip as the 
leader of the Opposition. Singh said the reference to Enron came up when 
Cheney spoke of the growing Indo-US economic relations and mentioned that 
America wanted strong investments in India.
Singh sought to play down the fact that Cheney had evinced such inordinate 
interest in the Enron case. ``He brought it up and we explained our position 
and the matter was allowed to rest there,'' Singh said. What Singh left 
unsaid was that the Enron project being mentioned by an official as senior as 
the US vice-president indicates the level of concern in the US about the 
viability of India as an attractive foreign investment destination. 
Questions about the Enron project were also asked during Sonia's meeting at 
the Asia Society, Singh said. ``I explained that one could not wish away the 
problems which have arisen. The demand projections have gone haywire while 
the cost of tariff has turned out to be much too high, partly because of the 
rise in the prices of feedstock and partly due to the depreciation of the 
exchange rate,'' Singh recounted. He said he had also clarified that the real 
problem was the high cost of tariff and that a mutually satisfactory way of 
reducing it had to be found. 
Singh said the Congress president's meetings with Cheney and US National 
Security Advisor Condoleeza Rice also dwelt on the National Missile Defence 
(NMD) programme. Sonia expressed fears it could lead to an arms race in the 
region. The Indian side also said that the programme still contains several 
uncertain elements which need to be explained. The Congress delegation 
pointed out the Chinese, Russians and the Europeans too have their 
differences on the issue. The American officials, said Singh, explained that 
they were in the process of engaging their allies and the Russians on this 
issue. 
On the country's economy, Singh said it had slowed down substantially and, 
yet, the finance minister had presented a budget pegging the GDP growth rate 
at 6.1 per cent while the real figures show a sharp deceleration to 5.2 per 
cent. 
Singh said the last three years of BJP rule had seen a progressive 
deceleration in the GDP growth rate, adding even more worrying was the poor 
performance in sectors ranging from agriculture to construction, 
manufacturing and services.

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


CM, Pawar flayed for contradicting views on Enron
The Times of India News Service

07/03/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)

PUNE: Criticising chief minister Vilasrao Deshmukh and NCP president Sharad 
Pawar for adopting extreme stands on the Enron imbroglio, former deputy chief 
minister and senior BJP leader Gopinath Munde has said his party did not have 
any objection to a thorough probe into the entire power supply deal. 
Addressing a press conference here, Munde said Deshmukh and Pawar had 
complicated the Enron issue by constantly airing their views despite the fact 
that the Godbole committee was in the middle of negotiations with the U.S. 
power major to reduce the tariff.
"While Deshmukh says that he will not tolerate the arm-twisting tactics of 
the power company, Pawar threatens to agitate if the project is scrapped. 
Such extreme stands will hamper the efforts of the Godbole committee while it 
holds deliberations with Dabhol Power Company," Munde said. 
To a question, Munde said he did not anticipate the NCP withdrawing support 
to the Congress-led coalition government in the state over the Enron issue. 
"Although Pawar did mention the possibility of his party pulling out from the 
government initially, he himself made statements to the contrary some days 
later," quipped Munde. 
Speaking on the furore created in the Pune Municipal Corporation due to the 
ruling party's proposal to remove the portrait of Rashtriya Swayamsevak Sangh 
founder Hedgewar, he said the Congress was behaving in a vindictive manner. 
Given the fact that Hedgewar's portrait was put up after a resolution to this 
effect by the general body of the corporation, the Congress did not have the 
power to arbitrarily order its removal, he added. 
Munde refuted allegations that former minister and scion of the royal family, 
Udayan Raje Bhosale, indicted in the Sharad Leve murder case, was let off due 
to a weak case filed by the home ministry during his regime. "The case and 
the charge-sheet against Bhosale were filed by the Democratic Front 
government when Chhagan Bhujbal was home minister," he clarified. 
Asked to comment on the arrest of all BJP corporators in the Nagpur Municipal 
Corporation in the infamous sports goods scam, Mr Munde said the Democratic 
Front government was misusing the Nand Lal committee report with a political 
agenda in mind. "As many as 13 corporators not named in the report have also 
been arrested. The technical mistakes on the part of the corporators have 
been brought out as unfair practices," he said. 
Similar probes should then be conducted in civic bodies in Pune and 
Pimpri-Chinchwad also, where the Congress and NCP have the majority, he 
demanded.

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


INDIAN FIs READY TO TAKEOVER DABHOL POWER, BUT WILL NOT RUN IT

07/03/2001
Asia Pulse
(c) Copyright 2001 Asia Pulse PTE Ltd.

NEW DELHI, July 3 Asia Pulse - Industrial Development Bank of India (IDBI) 
said on that Indian financial institutions were ready to take over the 
troubled US$3 million Dabhol Power Company (DPC) if its promoters Enron 
pulled out, but said FIs would not run the company. 
"In the worst circumstances (Enron pulling out), we can takeover the power 
project," IDBI S C Chakravarti told reporters here.
He, however, said the FIs would not run the company. An operations and 
maintenance contractor would be appointed to run the show. 
Enron has threatened to walk out of the 740 MW Phase-I, which is operational, 
and 1444 MW Phase-II to be commissioned shortly, project over payment 
disputes with Maharashtra State Electricity Board (MSEB). 
Chakravarti said three US energy companies have expressed interest in taking 
over DPC, but refused to divulge further details. 
Indian financial institutions were due to meet in Delhi Monday evening to 
discuss the future course of action. 
Asked about the Central bailout package, involving sale of power from DPC to 
energy deficit states, Chakravarti said he was unaware of developments and 
would not be able to comment on it. 
(PTI) 03-07 1007

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



Three US firms in talks with Indian lenders to take over DPC
Our Economy Bureau NEW DELHI

07/03/2001
Business Standard
2
Copyright (c) Business Standard

Three US electricity generation companies are in talks with Indian lenders 
for taking over the operations of Enron-promoted Dabhol Power Corporation, 
top financial institution executives said. 
Industrial Development Bank of India chairman S K Chakraborti said that these 
generation companies have approached Indian lenders who are keen on the 
completion of the project.
But, he declined to name the companies saying talks have just been initiated. 
The lenders, who earlier had a cover on assets, have also taken control of 
the DPC's equity which can be used as security. 
AES has already evinced interest in the project and is learnt to have 
initiated talks with the power ministry and IDBI, the lead institution for 
the DPC. 
"We are prepared to take over Enron's stake if it decides to pull out. We 
would not run the company but the operations and maintenance contractor would 
be appointed to run the show," he said 
Enron has threatened to walk out of the 740 mw phase-I, which is operational, 
and 1,444 mw phase-II to be commissioned shortly.

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


Selected details from state's unedited power contracts, at-a-glance

07/02/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

Here's some of the details from the state's unedited power contracts, 
at-a-glance: 
- Controller Kathleen Connell releases unedited version of power contracts 
Gov. Gray Davis sought to keep secret.
- She releases 41 contracts with 27 power generators. Four are short-term 
contracts, the balance are long-term. 
- Most of the long-term contracts are for 10 years; one is 20 years. 
- The state paid as much as $410 per megawatt hour under the contracts. 
- Most contract prices are from $70 to $200 per megawatt hour, Connell says. 
- The state has paid $402.6 million toward the long-term energy contracts to 
date. 
- The state paid at least $2.8 million to energy consultants, including 
former industry officials such as Davis chief energy adviser S. David 
Freeman, who have been negotiating the state's long-term power contracts. 
- Los Angeles Department of Water and Power offered two consecutive 30-day 
contacts starting March 1, totaling $57.9 million. The municipal district 
provided a constant flow of 167 megawatts in March and 250 megawatts in 
April. One megawatt is roughly enough power for 750 homes. 
- Houston-based Enron Power Marketing Inc. sold a steady stream of 200 
megawatts, 16 hours a day, six days a week in March and April. In its 
contract, Enron required the state to pay its bill once a week. 
- "Please pay the amount above. Thank you," a Dynergy Power Marketing Inc. 
officials wrote neatly on one $1.76 million invoice.

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


SMARTMONEY.COM: What Will the Second Half Bring?
By Rebecca Thomas

07/02/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Of SMARTMONEY.COM 

AS THE DOORS closed on the second quarter, investors found themselves in 
nearly the same situation as in the first three months of the year. The U.S. 
economy is barely growing, and corporate profits remain in recession. Lower 
interest rates and tax rebates will inevitably bring relief sooner or later, 
but the emphasis is now on later.
Yet many of our pundits insist they see sunshine poking through the clouds. 
They'll be the first to acknowledge that the implosion in corporate profits 
has been painful, but they're quick to add that the equity market tends to 
lead the business cycle recovery by three to six months. Investors who get in 
now - though they're assuming substantial risk - stand to reap the greatest 
rewards if the economy recovers any time in the second half of this year, 
they promise. 
"If the U.S. is in recession now, and if the market turns up five months 
before the recession ends (which has been the average), then the stock market 
is OK if the recession ends by October," says ISI Group chief economist Ed 
Hyman, typically one of our most bearish pundits. Adds the generally upbeat 
Thomas Galvin, chief investment strategist at Credit Suisse First Boston: 
"Once the [economic] data points change, which I think they're in the process 
of doing, everyone and their mother will be back in the market." 
Of course, there's no denying that conditions worsened in the second quarter 
and remain inordinately weak. The deterioration in corporate profitability 
and capital spending, as well as slowing consumer spending and sluggish 
growth abroad, continue to make the threat of recession a real concern. As 
UBS Warburg's Ed Kerschner, our No. 2- ranked pundit, puts it: "No doubt 
about it - it's nasty out there." 
Our pundits have adjusted their profit estimates to reflect this reality. 
Kerschner now expects second-quarter S&P 500 operating earnings to fall at 
least 14.4% below year-ago levels. "[T]his looks like the worst quarter of 
the profit cycle," he says. And the next two quarters might not be that much 
better, according to Ed Yardeni. On June 25, the chief investment strategist 
at Deutsche Banc. Alex Brown lowered his full-year S&P 500 profit estimate to 
$47 - reflecting a 14% year-over-year decline. Kerschner is the first Wall 
Street strategist to project earnings below $50 a share. Given the dreary 
near-term outlook, it's hard to blame investors for their wariness. Goldman 
Sachs guru Abby Joseph Cohen, for one, recognizes that investors who are 
often eager to pay up for potentially good news when the market is rising 
become reluctant to assume the same risk in periods of uncertainty. Galvin is 
equally understanding: "Investors are not bankrupt, but sentiment is clearly 
broke," he says. "Today the average money-market fund rarely yields 4%, yet 
most investors are happy to sit on cash." Indeed, investors currently hold 
$2.1 trillion in money-market funds - the highest level ever as a percentage 
of the market value of the Wilshire 5000 - and savings-account deposits are 
up 14% from last year, Galvin says. But if our pundits sympathize with 
investors' blas, attitude about stocks, they're definitely out to change it. 
Those who wait too long to get back into the market stand to lose out on 
potential profits in the end, they explain. "Many investors would prefer to 
wait until favorable price momentum returns to stocks," says Cohen in 
reiterating her belief that share prices and price-to-earnings multiples for 
many companies have already fallen to attractive levels relative to growth 
expectations. "We would rather make an early call, allowing our investing 
clients an opportunity to structure portfolios accordingly." 
Elaine Garzarelli, the chairwoman of Garzarelli Capital, agrees: "Eventually 
there will come a point when analysts revise down their estimates too much 
and then must rush to revise up when the economy snaps back...Because of 
this, we believe this is a good time to invest before upward revisions 
begin." 
Lehman Brothers' Jeffrey Applegate is of similar mind. In his opinion, the 
broad market is actually 15% undervalued at current levels, despite being up 
12% since its last trough on April 4. Historically, equity returns have 
averaged 17% in the 12 months from this level of undervaluation, he says. 
Because cyclical stocks - such as retailers, financials and technology - tend 
to perform best in the early stages of a market recovery, the strategist last 
week boosted the economic sensitivity of his U.S. equity portfolio. 
Specifically, he increased his position in Internet-infrastructure software 
maker BEA Systems (BEAS) and storage king EMC (EMC), bringing his overall 
technology weighting to 24%. In the consumer-cyclical sector, Applegate 
snatched up more shares of homebuilder D.R. Horton (DHI), jewelry juggernaut 
Tiffany (TIF) and Viad (VVI), a provider of products and services in money 
orders and payment processing. And in the financial industry (which accounts 
for a whopping 29% of his portfolio), Applegate replaced leasing- and 
financial-services provider GATX (GMT) with the more interest-rate receptive 
consumer-finance firm Household International (HI). To pay for his purchases, 
Applegate sold off a few defensive names - including AES (AES), Enron (ENE), 
Calpine (CPN) and Dynegy (DYN) - in energy and utilities. Knowing which 
companies to avoid in this nasty environment is also part of the game, says 
Kerschner, who screened out 37 companies that have the "dubious distinction" 
of having failed to meet Wall Street consensus estimates at least three times 
over the past five quarters. These companies, explains the strategist, "did 
not successfully play the time-honored game of assiduously guiding down 
analysts' estimates during the quarter and then triumphantly meeting or 
beating the final figure." Among the tainted 37 are US Airways Group (U), 
Bank One (ONE), Computer Sciences (CSC), American Home Products (AHP), 
Charles Schwab (SCH), Halliburton (HAL), Harrah's Entertainment (HET), 
McDonald's (MCD), Novell (NOVL) and Newmont Mining (NEM). 
As the second quarter ushers in the third, it's important to remember that 
things could indeed still get worse before they get better. But take note: 
It's during times like these that the early bird catches the worm. 
For more information and analysis of companies and mutual funds, visit 
SmartMoney.com at http://www.smartmoney.com
Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


USA: Duke denies using plant to sway Calif. power prices.

07/02/2001
Reuters English News Service
(C) Reuters Limited 2001.

SAN FRANCISCO, July 2 (Reuters) - Duke Energy, one of California's big, 
independent power generators, laid out on Monday written records it said 
prove it did not shut its San Diego power plant last winter to jack up 
electricity prices. 
Charlotte, N.C.-based Duke said any fluctuations in generation last winter at 
its 700 megawatt, gas-fired South Bay plant were ordered by the California 
Independent System Operator (ISO), the agency that oversees operation of the 
state's power grid.
"Records from the ISO's Automatic Dispatch System demonstrate that Duke 
Energy Trading and Marketing received instructions from the ISO for 
increasing and decreasing the power output from the South Bay plant," the 
company said in a statement. 
California has petitioned the Federal Energy Regulatory Commission (FERC) to 
order $9 billion in refunds from power companies it claims took advantage of 
the state's energy crisis to "gouge" the market, pushing wholesale prices up 
tenfold over the past year. 
Duke has repeatedly denied it tried to manipulate prices, citing plant 
maintenance, strict pollution rules, soaring natural gas prices and the 
financial risks linked to doing business with California's cash-strapped 
utilities as the main reasons behind the state's volatile spot power prices. 
Duke, together with Dynegy Inc. , Enron Corp. , Williams Cos Inc. , and 
Reliant Energy , is currently being investigated by state and federal 
officials to determine whether they manipulated the market by witholding 
power. 
Three former South Bay plant employees last month told a California senate 
hearing that Duke had instructed them to ramp down generation at the plant at 
times when the state's electricity reserves were extremely low. 
The three workers were hired by Sempra Energy's utility subsidiary San Diego 
Gas & Electric and remained at the plant after it was sold to Duke in 1998. 
They were eventually let go by Duke as part of the plant takeover. 
Earlier Monday, Duke said it was trimming $20 million from the bills it 
presented to the ISO and California Power Exchange for energy sales to the 
two this past January and February. 
The move implements a June 19 FERC order that Duke Energy "offset any 
invoiced amounts above the proxy price set for electricity," which was set at 
$273 per megawatt hour for January and $430 for February.

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


State controller releases unedited power contracts
By JENNIFER COLEMAN
Associated Press Writer

07/02/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

SACRAMENTO (AP) - State Controller Kathleen Connell released unedited 
versions of $43 billion worth of long-term energy contracts with 27 power 
generators on Monday, including several short-term deals whose release the 
Davis administration warned could drive up prices. 
The 41 contracts released Monday were the subject of a court fight between 
Democratic Gov. Gray Davis, Republican legislators and news organizations 
including The Associated Press.
For months, Davis had refused to release details of long-term contacts the 
state has signed with electricity providers, saying the documents needed to 
remain secret. The state began negotiating the contracts in January after the 
state's three private utilities were unable to secure credit to buy power. 
On June 15, Davis released 38 long-term contracts, but they had key portions 
blacked out. The news organizations then sued to have the complete contracts 
released. 
Steve Maviglio, spokesman for Davis, said the administration had agreed 
Friday to release the long-term contracts, but asked to have the release of 
the short-term contracts delayed for three months. 
The four short-term contracts Connell released Monday, which range from days 
to months, reveal more of the state's strategy for buying on the spot market, 
said Maviglio and Department of Water Resources spokesman Oscar Hidalgo. 
Revealing that could lead to higher wholesale prices, Maviglio said. 
"It shows the irresponsibility of the controller and every California who 
gets a higher electricity bill can thank Kathleen Connell," Maviglio said. 
The newly released documents show which companies are selling power to the 
state, how much they are charging and where it is generated. 
Two of the short-term contracts included 30-day contacts with the Los Angeles 
Department of Water and Power that totaled $57.9 million. The municipal 
district provided a constant flow of 167 megawatts in March and 250 megawatts 
in April. One megawatt is roughly enough power for 750 homes. 
"We still feel that those will hinder our leverage in gaining reasonably 
priced power on the spot market," Hidalgo said. "It shows our position on the 
daily spot market and what we're willing to pay." 
Generators can use that information to time their sales and drive up their 
prices, Hidalgo said. 
Another short-term contract was with Houston-based Enron Power Marketing 
Inc., which sold a steady stream of 200 megawatts, 16 hours a day, six days a 
week in March and April. In its contract, Enron required the state to pay its 
bill once a week. 
"It is not unusual. The state had never been in this type of position. They 
wanted to be sure they got some sort of payment," Hidalgo said. "You'll 
notice, though, that we haven't dealt with Enron since. There's no deals 
pending, and they're a very big player." 
Connell said her initial analysis of the contracts she released was that the 
average price per megawatt was higher than the governor's estimate of $70. 
But Maviglio said the administration's math was correct. 
"Given the controller's track record in assessing the work we've done this 
far, I wouldn't give much weight to her guesswork," he said. "The governor 
and the treasurer have consistently proven her wrong on every one of her 
claims." 
Mike Wilczek, senior western power market reporter for Platts, the energy 
market information division of The McGraw-Hill Companies, said much of the 
information in the contracts would be more valuable to the companies' 
competitors than to the public. 
"It's very clear why you'd want to keep that stuff secret," he said. 
Competitors will be particularly interested in delivery points, the power 
plants that will supply electricity to a particular delivery point, and the 
heat rates. 
Heat rates, for instance, "tells them how efficient the plant is," Wilczek 
said. "You can look at this stuff and say, 'That's as low as they can go"' in 
pricing their electricity at that plant. 
"That's probably the most sensitive information," he said. 
Knowing which plant supplies which delivery point could affect prices for 
that particular generator. For instance, if a competitor knows a particular 
plant is down, and the supplier is contractually responsible for sending 
power to that distribution point, "they're going to take advantage of that," 
he said. 
Connell said the judge heard all the evidence before ordering the complete 
contracts released and "there is no reason that information should raise 
prices. Today's prices aren't going to be affected by prices engineered 
several months ago." 
Public Utilities Commissioner Richard Bills said the terms of the contracts, 
most of which are 10 years, are too long. 
By signing long-term contracts in a volatile market like this, Bills said, 
"the result could well be that we get burned because we've entered in too 
long an agreement at prices that will be well above market as these contracts 
mature." 
In addition to the energy contracts, Connell also released documents showing 
the state has paid $402.6 million toward the contract totals. 
The state also paid various energy consultants $2.8 million. Those contracts 
include payments to several industry officials who have been negotiating the 
state's long-term power contracts, such as S. David Freeman, the governor's 
chief energy adviser. 
--- 
Editors: AP Writer Don Thompson contributed to this report.

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


Oregon Lawmakers Pass Bill To Delay Elec Dereg 5 Months
By Jessica Berthold
Of DOW JONES NEWSWIRES

07/02/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

LOS ANGELES -(Dow Jones)- The Oregon House of Representatives Sunday approved 
a bill delaying the partial deregulation of the state's electricity industry 
by five months, a spokesman for the Oregon Public Utilities Commission said 
Monday. 
The bill, which passed 53-6, sets a date of March 1, 2002, for large business 
customers of Enron Corp.'s (ENE) Portland General Electric Co. and Scottish 
Power's (SPI) PacifiCorp to begin choosing their own electricity suppliers. 
Those customers can also opt to retain regulated rates until July 2003, said 
OPUC spokesman Bob Valdez.
Delaying deregulation until March will ensure the state gets through its 
high-demand winter months without the possibility of glitches caused by the 
new system, Valdez said. 
Residential and small business customers would continue to have regulated 
rates. The governor is expected to sign the bill, Valdez said. 
The House was originally scheduled to vote on the bill last Monday, but 
Democrats boycotted the state's Capitol for a week in protest of a Republican 
redistricting plan. 
The OPUC will determine by late July which customers qualify as large 
businesses, Valdez said. 
The new start date ensures customers won't mistakenly attribute an unrelated 
rate increase, also planned for Oct. 1, to the start of deregulation. The 
rate hike is necessary, because the Bonneville Power Administration, a 
federal hydropower marketer which sells to the state's utilities, has raised 
its rates to cover the cost of buying more power than usual in the 
high-priced spot market to meet burgeoning customer demand. 
"I think the utilities are pretty happy," Valdez said. "I don't know that 
they were quite ready, with billing and such, for restructuring by Oct. 1." 
-By Jessica Berthold, Dow Jones Newswires; 323-658-3872; 
jessica.berthold@dowjones.com

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