INDIA: Enron may sell India's Dabhol at discount - source.
Reuters English News Service, 10/03/01
BG Group to Buy Enron India Assets for $388 Million (Update2)
Bloomberg, 10/03/01

NEWS SNAP: BG Builds E&P, India Asset Base In Enron Deal
Dow Jones International News, 10/03/01
UK: UPDATE 1-BG to buy Enron India assets.
Reuters English News Service, 10/03/01
India: RCF seeks British Gas supply for Trombay
Business Line (The Hindu), 10/03/01
India: Enron refuses to take hit on equity
Business Line (The Hindu), 10/03/01
NCP, Cong differ on judge to head Enron probe
The Times of India, 10/03/01
INDIA PRESS: Enron Rejects Tata, BSES Offers For Dabhol
Dow Jones International News, 10/02/01
High Court To Decide FERC's Role In Competitive Pwr Mkts
Dow Jones Energy Service, 10/02/01
UK: U.S. Enron, Guinness sign 15-year energy deal.
Reuters English News Service, 10/02/01
Enron To Operate Guinness Brewery's Energy Assets
Dow Jones Energy Service, 10/02/01

Enron Rejects Tata, BSES Offers to Buy Indian Unit, Agency Says
Bloomberg, 10/02/01

Power Grid Access Rules Challenged Before Top Court (Update1)
Bloomberg, 10/02/01



INDIA: Enron may sell India's Dabhol at discount - source.

10/03/2001
Reuters English News Service
(C) Reuters Limited 2001.

BOMBAY, Oct 3 (Reuters) - U.S. energy giant Enron Corp might be willing to sell its holding in a troubled $2.9 billion Indian power unit at a discount, a source at one of the lenders to the project said on Wednesday. 
The source told Reuters that Tata Power Company, India's largest private electricity firm, was negotiating to buy Enron's stake in Dabhol Power Co at a discount.
"We feel Enron might be willing to sell at a small discount," the source said. 
A spokesman for Dabhol declined comment. Tata Power has acknowledged that it has held preliminary talks over Dabhol. 
In August, Houston-based Enron said it and its other foreign partners were ready to sell their stakes in Dabhol for no less than $1.0 billion, an amount said to be sufficient only to cover their costs and direct financial investment in the project. 
Enron owns 65 percent of Dabhol, while the U.S. conglomerate General Electric and construction firm Bechtel each owns 10 percent. The remaining 15 percent is held by the Maharashtra State Electricity Board (MSEB), the nearly bankrupt power distribution monopoly in the state where the plant is located. 
On Wednesday, British gas and oil producer BG Plc said in London it had agreed to buy Enron's stake in another oil exploration joint venture in India for $388 million. 
Dabhol has been facing problems for nearly a year over high tariffs and payment defaults by MSEB, its sole customer. It was forced to shut down its 740 MW plant on the west coast of India in June after MSEB stopped buying power. 
The shutdown has stalled an expansion programme that was almost complete and would have raised capacity to 2,184 MW. 
The managing director of Tata Power told Reuters on Monday his company had held preliminary talks to buy Enron's Dabhol stake, and newspaper reports indicated BSES Ltd was another suitor. 
Officials at BSES, a leading distributor of electricity to Bombay and also a power producer, were not immediately available. 
The source said Tata Power officials met P.P. Vora, chairman of state-run Industrial Development Bank of India, the biggest lender to the project, last Thursday to start negotiations. 
Tata Power shares were up 1.5 percent at 99.30 rupees in afternoon trade while the Bombay benchmark index was down 0.30 percent.

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


BG Group to Buy Enron India Assets for $388 Million (Update2)
2001-10-03 06:10 (New York)

BG Group to Buy Enron India Assets for $388 Million (Update2)

     (Adds details, analysts' comments from the third paragraph.)

     London, Oct. 3 (Bloomberg) -- BG Group Plc, the onetime U.K.
natural gas monopoly, agreed to buy Enron Corp.'s oil and natural
gas fields in India for $388 million, its biggest purchase to date
in a bid to exploit the nation's growing energy shortage.

     ``The deal crystallizes India as our new core area of
operations,'' said David McManus, a BG executive vice president,
in an interview. ``India's gas demand is expected to grow by half
over the next 10 years, while its gas production is falling. We
aim to bridge this huge gap in some part.''

     India's gas production fell 11 percent to 1999 from 1997 as
Oil & Natural Gas Corp., the state explorer, made no significant
discoveries in 15 years. Insufficient supplies of gas have hurt
growth in the country's fertilizer and chemicals industries and
hampered upgrading of its power plants, still mostly coal-fed.

     The government expects a gas deficit to triple in the next
six years unless new wells are drilled or existing fields expand
sales. BG, with 70 percent of its reserves as gas, is pushing to
sell the fuel in markets from the U.S. to Asia. At Enron, the sale
is part of a drive to end pumping oil and gas and focus on energy
trading.

     BG shares fell as much as 6.5p, or 2.5 percent, to 257p in
London. BG shares over the past year have fallen 0.9 percent,
while the 11-member FT-SE All-Share Oil & Gas Index has fallen 9.6
percent.

                         Fields

     The operations include a 30 percent stake in the Tapti gas
field and the Panna/Mukhta oil and gas field, as well as 63
percent of an untapped deposit on the west coast of India. The
assets hold more than 170 million barrels of oil and gas, BG said.

     ``They're supplementing their existing gas business in India
with new reserves,'' said Anthony Eccles, an analyst at Dresdner
Kleinwort Wasserstein in London. ``That justifies the price they
agreed to pay.''

     BG controls Gujarat Gas Co., which supplies gas to customers
in the Gujarat state, and owns half of Mahanagar Gas Ltd., which
serves Mumbai. It also is building a liquefied natural gas plant
in Gujarat.

     Currently, the Gas Authority of India is the monopoly buyer
of gas from the fields and the seller of the fuel to BG's
ventures. While the fields' existing output has been fully
contracted to the Gas Authority, the company will negotiate a
right to bypass it with additional production, McManus said.
     Lehman Brothers advised BG on the acquisition, McManus said.

                         Enron

     The agreement ``represents a significant step for Enron in
selling assets not integrated into our wholesale or retail energy
businesses,'' Enron president for exploration and production Jeff
Sherrick said in a statement.

     The assets being sold to BG exclude Enron's Dabhol Power Co.
project in India, a $3 billion venture entangled in a nine-month
payment dispute with its state-run buyer. Enron has said it wants
to sell its 65 percent share of Dabhol, which is owed $64 million
by the Maharashtra State Electricity Board.

     Both Enron and BG said the sale of gas fields are unrelated
to Dabhol's troubles. McManus declined to say whether BG would be
interested in buying Dabhol.

     Before agreeing with BG, Enron rejected bids from its Indian
venture partners, ONGS and Reliance Industries Ltd., as well as
from the nation's biggest refiner, Indian Oil Corp.

                         Competition

     BG faces competition from other companies eager to set foot
in the Indian gas market.

     Both Royal Dutch/Shell Group, Europe's largest oil company,
and Indian state-owned energy companies are developing LNG
terminals in Gujarat, whose coast faces Oman across the Arabian
Sea.

     ``BG gets really serious on India,'' said David Stedman, an
analyst at Daiwa SBCM in London. ``And their deal with Enron is
financially attractive.''



NEWS SNAP: BG Builds E&P, India Asset Base In Enron Deal
By Michael Wang and Sri Jegarajah
Of DOW JONES NEWSWIRES

10/03/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

LONDON -(Dow Jones)- U.K. oil and gas company BG Group PLC (BRG) Wednesday extended its footprint in the Indian subcontinent and expanded its growing exploration and production portfolio by paying $388 million for the offshore Indian assets of Enron Corp. (ENE), the U.S. energy group. 
BG watchers uniformly applauded the transaction, which appears to cement the company's current darling status.
Analysts said the company had acquired some promising upstream assets on the cheap. With proven and probable reserves of more than 170 million barrels of oil equivalent, BG's $388 million purchase price for Enron Oil and Gas India Ltd., or EOGIL, was the worth almost $2.30 a barrel, a bargain by international standards. 
"We value other Indian oil and gas reserves at $2.90 (assuming an oil price of $18 flat) so BG appears to have paid a good price," said ABN-Amro in a research note. 
A Mumbai-based energy analyst reckoned Enron had "probably undersold," noting that earlier this year Indian state-owned Oil & Natural Gas Corp. (P.ONG), an EOGIL partner, had its $400 million offer for the assets rejected. 
Enron has experienced mixed success as an integrated energy operator in India and is currently attempting to exit the controversial Dabhol Power Project, India's largest private power plant, of which it has a 65% controlling stake. 
EOGIL's stable of assets comprise a 30% stake in the Tapti gas field and the Panna/Mukta oil and gas field, and a 62.64% interest in the CB-OS/1 exploration license in the Gulf of Cambay off western India. EOGIL is the designated operator of these developments, which house proven and probable reserves of 170 million barrels of oil equivalent. 
Equity production from the fields amounts to 20,000 barrels of oil equivalent a day, representing about 6%-7% of BG's total output. In the year to March 31, EOGIL posted a pro forma profit after tax of $60 million on revenue of $160 million. 
The acquisition compliments BG's fledgling downstream interests in India, which include holdings in western Indian distributors Gujarat Gas Co. (65%) and Mahanagar Gas (50%). It is also the driving force behind a project to pipe liquefied natural gas from Iran to tap India's growing appetite for gas. 
India's gas supply deficit is estimated to be 86 million standard cubic meters a day by 2002, rising to 248 million standard cubic meters a day by 2012. Reflecting on that, analysts said the timing of BG's acquisition was good. 
"We see the acquisition as the first step in building an Indian exploration and production business to complement BG's gas distribution and gas import plans," ABN-Amro said. 
Around 0942 GMT, BG's shares were down 4.75 pence, or 1.8%, at 258.75 pence. 
-By Michael Wang and Sri Jegarajah, Dow Jones Newswires, +44-20-7842-9386, michael.wang@dowjones.com

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

UK: UPDATE 1-BG to buy Enron India assets.
By Andrew Callus

10/03/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, Oct 3 (Reuters) - UK gas and oil producer BG Plc on Wednesday said it had agreed to buy U.S.-based Enron's oil and gas assets off India's west coast for $388 million to complement its 10-year-old interests in gas distribution there. 
Enron Oil and Gas India Limited (EOGIL) has a 30 percent interest in the Tapti gas field and the Panna Mukta oil and gas field north west of Bombay, and a 62.4 percent interest in the CB-OS/1 exploration licence further north off the state of Gujarat.
Enron's majority owned Dabhol Power Co project, currently embroiled in a dispute with local customers over pricing of its electricity, is not part of the deal. 
The acquisition depends on some regulatory consents, and on confirmation from EOGIL joint venture partners to allow it to continue as operator of the fields. 
ONGC OBSTACLE? 
This could be a problem, because according to industry sources in Bombay speaking after BG's announcement, ONGC, the state-controlled energy group which is one of EOGIL's partners, still wants to take over operatorship. 
ONGC declined to comment. But in August company officials expressed an interest in the operatorship. 
BG said the deal would make it the biggest upstream energy foreign investor in India, with interests in fields that produce 10 percent of the nation's existing needs and have significant expansion capacity. 
"There is currently a deficit between the supply of gas, which is currently all indigenous gas, and the need for gas within India," said David McManus, BG's executive vice president with responsibility for India. 
Some energy analysts see demand doubling in India over the next 10 years, making it one of the world's fastest growing energy market. 
BG is already developing Liquefied Natural Gas (LNG) import facilities and last month its 65 percent owned Gujarat Gas Company struck a deal to buy gas from another west coast field, Lakshmi, with British group Cairn Energy and its partners there. 
"What this additional gas will do is create the marketplace in advance of LNG imports coming in behind it and in fact will fill the supply deficit that currently exists," said McManus. 
Enron has been looking to exit the upstream sector in a number of countries worldwide to focus on its core energy marketing and trading skills. 
BG's pipeline interests in India date back to its time as British Gas, a former state-owned gas utility. BG has since spun off its UK utility connections into Lattice Plc and Centrica. 
But it continues to pursue a strategy of monetizing its gas production down through the supply chain into pipelines, power stations and LNG elsewhere in the world, styling itself as an "integrated gas major". 
The deal would add five percent to its total production profile with some 19,000 barrels of oil equivalent a day of which 60 percent is currently gas. 
The company recently outlined plans to grow production at 11 percent a year over the period 2000-2006, one of the fastest growth targets in the sector. 
(additional reporting by Sriram Ramakrishnan in Bombay).

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

India: RCF seeks British Gas supply for Trombay

10/03/2001
Business Line (The Hindu)
Fin. Times Info Ltd-Asia Africa Intel Wire. Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd. All Rights Res'd

MUMBAI, Oct. 2. FACED with a severe shortage of feedstock, RCF Ltd has approached British Gas for supply of natural gas to its Trombay unit, a senior company official said. 
The move follows the uncertainty hovering around the LNG import plan of Enron and Tata-TotalFina with which RCF had tied up for gas supply.
"We have started talking to them (BG) informally and trying to figure out ways to bring the gas into Maharashtra as the Gujarat Government has some conditions on transporting fuels outside the State," Mr S. Balan, Director (Finance), said. The company's Thal unit has been facing feedstock shortages for the last few years. The Trombay unit requires 1.6 mscmpd of gas, most of which is available from the Gas Authority of India (GAIL) terminal. But supplies have been depleting for the last few years, forcing the company to explore other avenues for natural gas. 
To solve its fuel availability problems in the long run, RCF had signed an agreement with Enron in March 2000 for LNG supply to its Thal unit. 
But with delays in the execution of the Enron project, RCF also entered into an agreement with Tata-Total-GAIL combine for LNG supply. This project too has run into delays with a number of clearances being held up. 
Meanwhile, the company has announced its plans to go ahead with its expansion plans for the Thal unit. The capacity expansion is expected to cost Rs 1,400 crore, of which Rs 400 crore were initially slated to come from internal reserves while rest would be borrowed from financial institutions, senior company officials said. The company has two urea manufacturing units, one each at Trombay and Thal. RCF plans to increase the capacity of its Thal urea manufacturing unit by eight lakh tonnes per year from the current 14 lakh tonnes. 
The company is awaiting the written approval from the Union Cabinet to go ahead with the expansion programme. 
"We are waiting for cabinet approval to go ahead with our Thal unit expansion plans," Mr S. Balan, Finance Director, said. The Cabinet has in principle given its nod for the expansion. But a written approval was awaited, Mr Balan said. 
The company has targeted a turnover of Rs 5,000 crore in the next five years and would double this to Rs 10,000 crore within the next ten years, according to Mr D.K. Varma, Chairman and Managing Director. 
To meet the challenges of the scheduled decontrol of the fertiliser sector, RCF has lined up diversification plans. The company has already submitted expressions of interest to pick up stake in Paradeep Phosphates Ltd and Hindustan Organics Ltd, which are scheduled for disinvestment. 
Our Bureau

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

India: Enron refuses to take hit on equity

10/03/2001
Business Line (The Hindu)
Fin. Times Info Ltd-Asia Africa Intel Wire. Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd. All Rights Res'd

MUMBAI, Oct. 2. FINDING a buyer for Enron's Dabhol power project is appearing to become a tough bargain with the multinational company refusing to take any hit vis-a-vis the project. According to corporate sources, Enron categorically told both BSES and Tata Power that it would not take a hit on equity. 
Tata Power and BSES are the only companies which have shown interest in buying the 2,184-MW power project. Of the two, only Tata Power has filed a formal expression of interest with Industrial Development Bank of India (IDBI), the lead lender to the project.
When contacted, Mr R.V. Shahi, Chairman, BSES, said, "We had told Mr Wade Cline (Managing Director, Enron) that they will have to take a big hit on their equity for BSES to be interested. He (Mr Cline's) categorically ruled out the possibility. But that is to be expected at the beginning of any business negotiation." 
BSES had told IDBI during informal talks over the past week that it would consider picking a stake in Enron's 2,184 MW Dabhol Power Company (DPC) if power tariffs were lowered and project costs cut "drastically". 
Although BSES has not submitted a formal expression of interest, it has expressed a willingness to consider buying "only the power plant" subject to conditions. 
"I have told the officials (IDBI) that as it stands, the Dabhol project is not viable. But we are in the business of power. And if we know the cost of this power is viable and that our conditions are met, we will certainly consider buying a stake," Mr Shahi said. 
Our Bureau

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

NCP, Cong differ on judge to head Enron probe

10/03/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)

MUMBAI: The Enron controversy has taken a new turn with the Congress and the Nationalist Congress Party (NCP) being unable to agree on the retired supreme court judge who will head the judicial inquiry into the power deal. 
It is learnt that the NCP had informally suggested a few names but they were not agreeable to the Congress. Ideally, the state government should have left the choice of the judge to the chief justice so that the issue was not politicised, sources said.
After announcing that the entire 2,144 MW project would come under judicial scrutiny, the state cabinet is now faced with opposition from the NCP over everything, from the terms of reference for the probe to the appointment of a retired supreme court judge. 
The judicial inquiry was announced on July 11 but the terms of reference were finalised only on August 21. The cabinet approved the probe on September 19 under the Commission of Inquiry Act. Mantralaya sources claimed that there was a move now to defer the appointment of a judge to head the commission. 
It is learnt that MPCC president Govindrao Adik had urged chief minister Vilasrao Deshmukh not to succumb to pressure from the NCP and instead expedite the probe. ``The people of Maharashtra have a right to know the entire truth about the Enron project,'' he said. 
In an informal chat with newspersons, he said, ``During my recent tour of rural Maharashtra, I noticed that many people had not heard of Osama bin Laden, but Enron was on everyone's lips. The people are rightly blaming Enron for the frequent load-shedding. In the drought-hit areas, people are unable to operate the borewell pumps because of load-shedding.'' The people had realised that a senior NCP leader was responsible for this state of affairs, he said without naming anyone. 
Mr Adik said it would be politically suicidal for the Congress to back Enron since the deal had dealt a heavy blow to the MSEB's finances as a result of which it was now unable to meet the power requirement of farmers. He said certain NCP, Shiv Sena and BJP leaders were trying to bail out the American multinational but the people had seen through their game. 
Meanwhile, the project, which has interest costs running up to $500,000 per day is running up project cost escalation with each delay. Analysts say a speedy resolution is necessary irrespective of whether Enron stays or not. The DPC has already defaulted on its interest payment of $20 million for phase II to over 20 lending institutions on September 17. 
An NCP leader said that the probe seemed ill-timed since the Centre too was planning to look into it and several contractual resolution processes were under way. ``This is not the time for a probe, which will delay matters further,'' he asserted. 
This stand echoes the fears voiced by the Dabhol Power Company, which has contended that a judicial inquiry at this stage would be a setback to any early resolution of the project since any party interested in a buy-out would rather wait out the inquiry period before deciding to take on Enron's stake of 65 per cent. 
However, a Congress leader said the government was serious about expediting the probe. ``The process of getting the inquiry started takes time. It should take about two weeks by the time the entire correspondence is through and the appointment is made,'' he said. 
Opponents of the project claim that there are several issues which have not yet been considered by the courts. The power purchase agreement, for instance, has not been gone into although it is the subject of several petitions. Similarly, the technical clearances, including environmental approvals, and other clearances by the Central Electricity Authority are among the other aspects which may be probed for the first time.

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

INDIA PRESS: Enron Rejects Tata, BSES Offers For Dabhol

10/02/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI -(Dow Jones)- Enron Corp. (ENE) has rejected informal offers from India's Tata Power Co. (P.TPW) and BSES Ltd. (P.BSX) to buy Enron's stake in the Dabhol power project, the Business Standard reports, quoting the Press Trust of India. 
The newspaper says Enron isn't ready to sell its $1.1 billion stake in Dabhol at a discount.
Enron holds a controlling 65% stake in the Dabhol power project, which is valued at $2.9 billion. 
The project is a 2,184 megawatt power plant in the western Indian state of Maharashtra, and is the single largest foreign investment in India. 
Newspaper Web site: www.business-standard.com 
-By Himendra Kumar; Dow Jones Newswires; 91-11-461-9426; himendra.kumar@dowjones.com

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

High Court To Decide FERC's Role In Competitive Pwr Mkts
By Bryan Lee
Of DOW JONES NEWSWIRES

10/02/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

WASHINGTON -(Dow Jones)- The U.S. Supreme Court will hear oral arguments Wednesday in a case that will decide the extent of the Federal Energy Regulatory Commission's authority to promote competitive wholesale electricity markets. 
The outcome has broad ramifications for the U.S. $220 billion electricity sector, congressional debate of electricity-reform legislation, and the FERC's ongoing efforts to further electricity competition as a surrogate for regulation.
At issue are the FERC's 1996 rules requiring utilities to provide nondiscriminatory transmission services to competing wholesale power providers. 
State regulators, led by the New York Public Service Commission, argue that the FERC's rulemaking preempted state authority under the 1935 Federal Power Act. 
"FERC is attempting to preempt traditional, preexisting state regulation without congressional authorization," the New York commission told the court. 
At the other end of the spectrum, the nation's largest electricity marketer, Enron Power Marketing Inc., a unit of Enron Corp. (ENE), maintains the commission didn't go far enough in asserting its authority over interstate power markets. 
"It is important to confirm FERC's jurisdiction over all interstate transmission of electricity, because such transmission is in interstate commerce, and no state can regulate it constitutionally or successfully," Enron said in its brief. 
Congress in the Federal Power Act left retail power rate regulation to the states, while giving the Federal Power Commission, the FERC's predecessor, authority to regulate electricity in interstate commerce. 
The FERC's open-access transmission mandate interpreted the 1992 Energy Policy Act, which sought to spur competition in wholesale power markets. 
The rules required utilities to file open-access transmission tariffs to move wholesale power in competitive interstate markets. But those wholesale transmission services "bundled" with retail electricity service were left within state ratemaking authority by the FERC. 
However, the FERC asserted jurisdiction over state-regulated wholesale transmission in the event states opened their retail power markets to competition, effectively "unbundling" the wholesale transmission component of the formerly bundled transaction. 
It is this aspect of the rulemaking that the state utility regulators challenge. 
Wholesale transmission services in support of retail sales represent about 80% of the wholesale transmission market. Roughly half of the states have taken some step toward retail power competition. 
A 'Regulatory Gap' 

From the perspective of competitive power providers, the FERC left a gaping loophole in its open-access transmission mandate that utilities are exploiting to thwart competitive access at wholesale. 
Utilities are reserving more transmission capacity than needed to serve their retail customers as a means of blocking competitive entry at wholesale, Enron and other competitive power providers argue. 
The FERC's "determination that it lacks jurisdiction over the majority of interstate transmission uses has created an unnecessary and unacceptable regulatory gap over the interstate transmission that a utility claims is used to serve retail customers," the Electric Power Supply Association, which represents competitive power providers, told the court. 
"This absence of uniform governmental oversight has allowed public utilities to manipulate schedules and system dispatch to their own benefit without fear of discovery or serious reprisal," said Electric Power Supply Association. 
Also, Enron's position was supported by the Electricity Consumers Resource Council, which represents large industrial power users. "Unless discrimination is eliminated with respect to the great majority of transmission associated with bundled retail sales, competitive power markets cannot develop," the council said. 
The Justice Department, on behalf of the FERC, argued in defense of the status quo under the 1996 rules, as did the Edison Electric Institute, the trade group representing investor-owned utilities. 
Order No. 888, as the FERC calls its open-access rulemaking, "respects the division of federal and state authority drawn by Congress in the (Federal Power Act), while taking into account the changes that have taken place since the act was enacted," Edison Electric Institute said. 
The FERC's open-access rules were upheld by the U.S. Appeals Court for the District of Columbia Circuit in June 2000. -By Bryan Lee, Dow Jones Newswires; 202-862-6647; Bryan.Lee@dowjones.com

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

UK: U.S. Enron, Guinness sign 15-year energy deal.

10/02/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, Oct 2 (Reuters) - U.S. utility Enron said on Tuesday it had signed a 15 year deal with Guinness to manage the energy and utility assets at the Royal Park Guinness Brewery in London. 
Under the agreement, Enron will source gas and electricity for the site as well as be responsible for managing energy reduction projects, said the company in a statement.
Guinness beer is owned by British drinks giant Diageo plc .

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

Enron To Operate Guinness Brewery's Energy Assets

10/02/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

LONDON -(Dow Jones)- Enron Energy Services Inc. (X.EES) will operate the energy and utility assets of the Park Royal Guinness Brewery in London, one of the biggest breweries in Europe, Enron and Guinness said in a statement Tuesday. 
Under the 15-year agreement, Enron will provide gas, steam, electricity, compressed air and other industrial commodities to the brewery, a unit of Diageo PLC (U.DEO).
Enron said this would allow it to cut Guinness's operating costs by 20% in the first year. 
Enron will also implement a series of energy saving measures at the brewery, including adding energy-efficient boilers and refrigeration units. 
Measures to improve energy efficiency will help Guinness to meet its targets under the Climate Change Levy - a tax levied on corporate energy consumers and individual power plants. 
Companies can be exempt from up to 80% of this tax if they reduce energy consumption. 
Guinness built the Park Royal Brewery in 1936. It produces 400 million pints of beer each year for the U.K. market. 
Enron Energy Services is a subsidiary of Enron Corp. (ENE) providing energy and facility management in Europe and North America. 
-By Sarah Spikes, Dow Jones Newswires; +44-(0)20-7842-9345; sarah.spikes@dowjones.com 

(Corrected 1410GMT) 
Measures to improve energy efficiency will help Guinness to meet its targets under the Climate Change Levy - a tax levied on corporate energy consumers and individual power plants. 
(An item timed around 1418 GMT incorrectly stated the levy base.)

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


Enron Rejects Tata, BSES Offers to Buy Indian Unit, Agency Says
2001-10-02 11:51 (New York)


     Mumbai, Oct. 2 (Bloomberg) -- Enron Corp., the world's
biggest energy trader, rejected offers from Tata Power Co. and
BSES Ltd. for its Indian unit, the Press Trust of India news
agency reported, citing an official it didn't name.

     Enron told Tata and BSES officials it won't sell its 65
percent equity in Dabhol Power Co., which runs the $3 billion
power plant, for less than the $1.1 billion it has invested in the
project in the past nine years, the agency said.

     Enron wants to exit the venture because of a nine-month-old
payment dispute with the Maharashtra State Electricity Board, its
sole customer. The board stopped buying the power in May, saying
it was too expensive. It owes Dabhol $64 million in unpaid bills.

     Tata Power, the nation's biggest non-state power company,
last month said it was interested in buying Dabhol Power only if
Enron lowers its price and the federal government guarantees it
will buy 80 percent of the unit's power. Tata had chosen Ernst &
Young LLP, an accounting firm, as its adviser.

     BSES had also asked Enron and lenders to the 2,184-megawatt
plant to reduce the cost of power by converting foreign currency
loans into local currency loans, rescheduling debt repayments and
turning the liquefied natural gas facility at the plant site into
a separate company.

     ``I made it clear to them that the project is not durable
unless it is financially re-engineered and the tariff reduced to
an affordable level,'' the agency quoted BSES chairman R.V. Shahi
as saying. Shahi earlier met Dabhol managing director K. Wade
Cline and lenders to the project, the agency said.

     The Dabhol unit is the largest overseas investment in the
country.



Power Grid Access Rules Challenged Before Top Court (Update1)
2001-10-02 17:32 (New York)

Power Grid Access Rules Challenged Before Top Court (Update1)

     (Adds background in sixth-eighth paragraphs.)

     Washington, Oct. 2 (Bloomberg) -- The U.S. Supreme Court will
hear arguments tomorrow on whether federal energy regulators can
require utilities to provide equal access to their power
transmission networks, a key step in opening America's electricity
markets.

     New York and other states say the Federal Energy Regulatory
Commission overstepped its authority by ordering local utilities
to allow rival power suppliers such as Enron Corp. to use their
transmission lines. Enron also contested the order, saying it
didn't go far enough to ensure competition.

     Since the landmark 1996 order, the commission has moved even
further to ensure power sellers have equal access to transmission
lines, and that utilities aren't protecting the market for their
own power plants. A decision against the commission could halt the
nation's advance toward electricity competition, experts said.

     ``If the court enshrines some limitations on FERC's
authority, it will create confusion and it will, at least for a
while, slow change in the industry,'' said James Hoecker,
commission chairman from 1997 until early this year.

     The court has until the end of June, when its term ends, to
decide the case.

     The U.S. has been moving for two decades toward deregulating
the electricity business, which had $226.5 billion in U.S. sales
in 2000, for two decades. Large power users and other supporters
of restructuring say consumers will see lower power bills if
utility monopolies are dismantled and more competitors are allowed
into the markets.

                        California Example

     Critics of deregulation point to surging prices in
California, one of about 25 states opening their power market to
competition. The average price of power in the state quadrupled
from January to June compared with a year earlier.

     The price surge, which some blamed on a dysfunctional
wholesale market, caused FERC to step in and limit how much
generators in California and 10 other Western states could charge
for power. Commissioners, who say they would rather let markets
set prices, have tried to use the open-transmission rule and other
directives to encourage competition.

     Recognizing that competitive power suppliers and marketers
won't get into the business if they're not sure they can fairly
sell power through utility lines, the commission has told
utilities to join regional transmission organizations, or RTOs,
which would independently control the grid.

     Last week the commission told utilities to join an RTO by
Dec. 15 or risk losing the authority to set their own rates based
on market conditions, or having merger-approvals delayed.

                          `Seminal Case'

     Commission Chairman Pat Wood said if the Supreme Court were
to deny the commission's authority over transmission in this
``very seminal case,'' he hopes Congress would approve legislation
giving FERC the clear power to require that the nation's grid
system be run fairly for all parties.

     A decision for the commission or for Enron would essentially
keep the commission moving in the direction of encouraging
increased competition, Wood said. ``The commission has essentially
moved to the Enron position with calling for RTOs,'' Wood told
reporters in Washington Friday.

     The commission made an exception in its order for utilities
that charge customers one combined rate for power and its
transmission, a so-called ``bundled'' sale. The agency said issues
affecting those transactions were matters for state regulators.

     Houston-based Enron, the nation's largest energy trader,
contends FERC should have authority to regulate all electricity
transmissions, whether they are bundled or not.

     ``FERC took aim at only a small slice of the problem and
declared victory,'' Enron said in its brief to the court. It said
the exception ``leaves about 60 percent of all relevant
transmission beyond the reach of the only effective remedy.''

                         New York's Appeal

     New York attacked the commission's order as an infringement
on a state's authority. The rules ``usurp state power to ensure
reliable local distribution of electricity over hundreds of
thousands of miles of poles, wires and transformers,'' the state
argued in its appeal to the Supreme Court.

     If the nation's highest court rules against the commission,
state regulators, some of whom oppose FERC's plan for four large
transmission groups, may have more clout over how RTOs are formed,
said Pat McMurray, spokeswoman for the Edison Electric Institute,
which represents investor-owned utilities.

     The commission's order was largely upheld by a federal
appeals court in Washington last year.

     A separate case, decided in a different circuit court, found
that the commission is limited in its transmission authority. The
court said FERC can't force a utility that must restrict grid
access because of capacity constraints to give electricity from
competitive suppliers the same access as its own power.

     This split in the circuit courts over how far the commission
reigns over transmission is why this case is before the Supreme
Court, Hoecker said.

     ``If the court rules in favor of the broadest interpretation,
giving FERC greater jurisdiction, it will hasten the arrival of
competition and the restructuring of the business,'' said Hoecker,
a partner with Swidler Berlin law firm in Washington and a board
member of utility-owner Allegheny Energy Inc.