USA: Williams backs limited Western power price controls.
Reuters English News Service, 04/25/01

Indian Power Minister Prabhu on Dabhol, Distribution: Comment
Bloomberg, 04/25/01

USA: El Paso looks to build 750 mmcfd gas line to Calif.
Reuters English News Service, 04/25/01

India, Enron In Dispute On Future Of Gas-fired Pwr Plant
Dow Jones International News, 04/25/01

FRANCE: Shell sees months before Saudi gas deals signed.
Reuters English News Service, 04/25/01

INDIA: India working on resolving Enron crisis-Minister.
Reuters English News Service, 04/25/01

Enron Dabhol Pullout Won't Hurt India Foreign Invest -Min
Dow Jones International News, 04/25/01

India's Law Min: Court System Hindering Economic Progress
Dow Jones International News, 04/25/01



USA: Williams backs limited Western power price controls.
By James Jelter

04/25/2001
Reuters English News Service
(C) Reuters Limited 2001.

SAN FRANCISCO, April 25 (Reuters) - Calling California's energy crisis "an 
extraordinary situation", one of the biggest energy merchants to the state 
said on Wednesday it would back limited price controls to tame runaway 
wholesale power costs. 
"We all have to work together, and this is the right thing to do," Williams 
Cos. chairman and chief executive officer Keith Bailey said in a statement, 
breaking ranks with other energy providers who so far have argued against 
regulatory intervention in the market.
Bailey said that while long-term price controls could stifle construction of 
new power plants in the energy-starved state, there is a need to bring 
soaring power prices in the Western U.S. under control. 
"We ... recognize this is an extraordinary situation. We need to help create 
some breathing room over the next year or so to allow the current emergency 
supply initiatives to have a meaningful impact," the head of Williams said. 
Bailey said he was seeking "short-term, regional price controls during 
emergency periods." 
Federal regulators currently impose price controls only in California during 
so-called Stage Three power emergencies, when there is an imminent threat of 
rolling blackouts. 
Expanding the controls to rest of the West would likely meet opposition by 
neighboring states that sell power to California. 
The Federal Energy Regulatory Commission, which regulates the wholesale power 
market, was meeting in Washington D.C. on Wednesday to consider whether to 
impose price controls across the 11-state region. 
Williams, based in Tulsa, Okla., owns and markets about 4,000 megawatts of 
electricity in California, roughly enough power to run four million homes. 
PRICE GOUGING 
The company is one of several out-of-state power generators that Calif. 
Governor Gray Davis and other state lawmakers have frequently scolded for 
"price gouging" in the state's volatile electricity market. 
Wholesale power prices across the Western U.S. have jumped tenfold over the 
past 11 months, largely the result of the region's failure to add enough 
power plants to keep pace with its growing population and soaring appetite 
for electricity. 
The alarming rise in power costs has also sparked repeated pleas by Gov. 
Davis to put price caps on wholesale prices to limit further damage to the 
state's economy. 
Financial chaos stemming from the energy shortfall has forced the state of 
California to buy electricity in the open market after the credit-worthiness 
of its biggest utilities crumbled under a mountain of debt from unexpectedly 
costly power purchases. 
Williams, in line with other independent generators like Mirant Corp. , Enron 
Corp. , Dynegy Inc. , and Reliant Energy Inc and El Paso Corp. , enjoyed a 
huge jump in earnings last year while denying their business was charging 
usurious power prices. 
Nevertheless, the Federal Energy Commission has ordered Williams to refund 
$29.6 million to California for charging prices this winter it said Williams 
could not justify. 
Williams is fighting the refund order. 
GROWING CRISIS 
Meanwhile, damage from the energy crisis is growing daily, prompting Standard 
and Poors on Tuesday to downgrade California's credit rating as the state 
scrambles to buy emergency power, build new power plants and revive its 
financially distressed utility sector, with little near-term relief in sight. 
"We ... believe a rational course of action that seeks new sources of supply 
must be combined with public policy that ensures confidence that services 
provided in the past and future will be paid in full," Bailey said. 
"The combination of short-term, regional price controls during emergency 
periods ... along with the elimination of credit risk, should provide the 
market a respite while creating incentive for the private sector to invest 
with confidence," he said. 
Williams Cos said that as of March 31, it was owed $252 million for power 
sold to the California Independent System Operator (ISO) and the now defunct 
California Power Exchange. 
Since April 1, Williams' power sales to California have been through the 
state's Department of Water Resources, which enjoys a far better credit 
rating than the financially strapped ISO. 
The ISO, which oversees most of the California power grid, has been paying 
millions of dollars daily for most of the year to ensure there is enough 
power available to avoid blackouts. 
The California Power Exchange, established as part of California's disastrous 
1996 law deregulating its power sector, folded in February.

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


Indian Power Minister Prabhu on Dabhol, Distribution: Comment
2001-04-25 10:02 (New York)


     New Delhi, April 25 (Bloomberg) -- Suresh Prabhu, India's
minister for power, on Dabhol Power Co. in the western Indian
state of Maharashtra. Dabhol, an affiliate of Enron Corp. of the
U.S., the world's biggest energy trader, is not being paid for the
power it produces by the state electricity board, which wants to
renegotiate the price, saying it is too high.

     ``The Maharashtra State Electricity Board and Dabhol should
sit and talk to each other. Any issue that needs to be resolved is
to be (sorted out) between the two parties.
     ``We are awaiting the Maharashtra government to form a
committee, which will negotiate (the contract with Enron). A
representative of the government of India will be there (on the
committee).

     On subsidies in power sales:

     ``Distribution of power is a thrust area. Commercialization
(recovering costs in full from customers) of distribution is the
key.
     ``Distribution reforms will make the power sector viable and
we can give the quality of power consumers want.

     On dues owed by utilities to state-run power producers:

     Waiving ``past dues on a case-to-case basis will be examined.
State utilities will be commercially viable in two years from
now.''

     On meeting the target of adding 100,000 megawatts by 2012:

     ``The target will be achieved not necessarily only through
greenfield projects but also through aspects likes renovation,
modernization, evacuating power from surplus regions to deficit
regions, demand-side management and exploitation of immense
potential of 150,000 megawatts of hydro-electric power.''


USA: El Paso looks to build 750 mmcfd gas line to Calif.

04/25/2001
Reuters English News Service
(C) Reuters Limited 2001.

SAN FRANCISCO, April 25 (Reuters) - El Paso Corp. unit Colorado Interstate 
Gas Co. said Wednesday it is considering building a huge 750 million cubic 
feet a day (mmcfd) Wyoming-to-California natural gas pipeline aimed at 
boosting supplies to the energy-starved state. 
The proposal for the 850-mile pipeline, which could begin service by late 
2003, is subject to a five-week "open season" in which the company tests 
market demand through an open-bidding process, an El Paso spokeswoman told 
Reuters.
"The open season runs from April 23 through May 31 and if we get enough 
market interest and get contracts lined up with customers, we will then apply 
for approval with the FERC," she said, referring to the Federal Energy 
Regulatory Commission, which approves all interstate energy projects. 
Gas prices in California have been among the highest in the U.S. over the 
past year, due to factors such as insufficient pipeline capacity, high gas 
demand from power plants, and low gas reserves. 
In the past month, several pipeline operators, including Enron unit 
Transwestern, Sempra Energy unit Southern California Gas Co, Williams Cos' 
Kern River Transmission, and Pacific Gas & Electric Corp.'s National Energy 
Group have announced plans to make major expansions to existing pipelines 
that feed California.

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


India, Enron In Dispute On Future Of Gas-fired Pwr Plant

04/25/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

DABHOL, India (AP)--Workers in yellow helmets scramble up steel girders to 
fit pipes into place for the world's largest natural gas-fired power plant, 
to be completed off India's western coast this year by American energy giant 
Enron Corp. (ENE). 
But 200 miles away in Bombay, government officials say they cannot afford the 
electricity that Enron is now providing from a naphtha plant at the site, and 
they expect the electricity generated by liquefied natural gas will cost even 
more.
"Enron is simply unaffordable," said Padamsinh Patil, energy minister for the 
state of Maharashtra, which includes Bombay. "The state cannot afford the 
power, so we take less power, but still have to pay Enron huge amounts." 
India needs power. During the April-to-October 2000 hot season, the nation 
had a daily shortfall of nearly 8,000 megawatts of electricity, according to 
the Center for Monitoring the Indian Economy. 
Enron's naphtha and gas plants at Dabhol will together be able to generate 
about 2,200 megawatts, but politicians have trouble with the price. Aging 
coal- and gas-fired plants that have been depreciated can charge about two 
rupees (4 cents) per kilowatt hour, while Enron's naphtha plant has been 
charging 11 to 15 cents. 
"Everyone wants to use us to blame for the systemic problem that the state 
electricity boards in this country sell power for less than it costs them to 
generate or buy power," said K. Wade Cline, president of Enron India. 
Despite the protests, Cline believes that the $3 billion project - India's 
biggest-ever foreign investment - will go online at the end of 2001. 
An advantage for Enron - and the major complaint against it - is a unique 
contract that requires the federal government to pay up in case of default by 
Maharashtra. Another grievance is that the Enron deal requires Maharashtra to 
pay for electricity even if it doesn't use it. 
Enron invoked the federal guarantee in February, when the state utility said 
it could not afford to pay Dabhol Power Corp., Houston-based Enron's Indian 
subsidiary. But before the national government stepped in, state officials 
paid $17 million in overdue bills. 
Enron says it is owed $48 million for power delivered in December and 
January. The February power bill has already been paid, and Krishna Rao, 
member of the Maharashtra State Electricity Board, said Wednesday the March 
electricity bill was being paid. 
The state bailout drew attention to the Enron deal, with opponents again 
raising questions about the cost to be borne for foreign investment and 
development. The debate comes as the government in New Delhi tries to reduce 
subsidies and sell off state-owned enterprises. 
Enron says federal payment guarantees were essential because few foreign 
companies were willing to invest when India began opening its economy in the 
early 1990s. 
"Who wanted to come to India at that time? Very few companies did," said 
Cline. "We came along, with some others, and said we're willing to invest 
because we think India has a bright future." 
Preparing for that future, workers at Dabhol clamber around inside an LNG 
tank that could fit three jets stacked one atop another. They weld a 
steel-reinforced dome, while others outside drill concrete blocks for the 
mile-long jetty where the LNG tanker Laxmi -meaning "wealth" in Hindi -is 
scheduled to dock in November. 
Enron says LNG is the cleanest and most economical fuel, but Bombay 
politicians have their doubts. They point at electricity prices that have 
increased fourfold, which Enron attributes to the jump in oil prices and a 
depreciation of the Indian rupee. 
Opponents of the project say the government should have invested in its own 
power plant instead of tying up with a foreign company. 
"We're not against foreign companies, but the Enron project is a sure pill 
for India's financial collapse," said Pradyumna Kaul, an anti-Enron activist. 
"It will bankrupt the nation. Both sides should agree to a separation and 
abort the contract now." 
Enron believes a crackdown on power theft and reduction of waste in 
transmission and distribution would generate enough money to pay for Dabhol's 
electricity. 
A state government-appointed committee agreed and this month called for 
reform of the state power utility that defaulted on its payments to Enron. 
But the five-member panel also insisted on lower tariffs and urged 
renegotiating the price agreement. 
Enron chief executive Jeffrey Skilling likened the India situation to the 
power woes being felt in California. 
"The utility offers a fixed rate to their customers and the wholesale costs 
of electricity have gone up like they have in the U.S.," he said from Enron 
headquarters in Houston. "The distribution company is having a liquidity 
squeeze identical to what you have with (Pacific Gas & Electric)." 
Meanwhile at Dabhol, managers are moving to the next phase, training workers 
to man tug boats to guide that first LNG tanker into port. 
"When you first go into these villages with helicopters, bulldozers, they're 
nervous, as any of us would be," said Cline. "But we're in a 20-year 
partnership here. Dabhol is going to be producing power for Maharashtra for a 
long, long time."

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


FRANCE: Shell sees months before Saudi gas deals signed.

04/25/2001
Reuters English News Service
(C) Reuters Limited 2001.

PARIS, April 25 (Reuters) - Oil major Shell thinks it will be a matter of 
months before it signs a memorandum of understanding with the government of 
Saudi Arabia to invest in multi-billion dollar gas projects, a Shell official 
said. 
Jeroen Van der Veer, President of Royal Dutch Petroleum said Riyadh was 
putting names to the three ventures that are being fought over by the world's 
11 leading oil companies.
"What will happen in the coming months is that they will try to put names to 
the various core ventures and of course then you have to detail the plan," 
Van der Veer told Reuters at a conference in Paris. 
Asked whether that meant the timetable for signing of MOUs would be months, 
Van der Veer said: "Sure, yes. We never expected that it would go very fast. 
These are huge projects." 
The comments were the clearest signal yet of a delay in Riyadh's timetable 
for the prestigious ventures that represent the biggest opportunity in Saudi 
for the big oil companies since nationalisation in 1975. 
Upstream oil exploration still remain off limits. 
Saudi had planned to finalise partners for the gas projects by the beginning 
of April having first approached the oil majors in 1998. 
Shell is tipped as a leading contender to develop the Shaybah gasfields - 
core project one. ExxonMobil is expected to win leadership of at least one of 
the other two projects on the Red Sea and in South Ghawar. 
Van der Veer said a Saudi delegation was due in the Netherlands on Thursday 
and would probably meet with Shell. 
"All the time there's been progress. It goes step by step. I think it makes 
sense to take time to develop the plans," he said. 
Also competing for operatorships or project stakes are BP, Chevron, 
TotalFinaElf, ENI, Enron/Oxy, TotalFinaElf, Marathon, Conoco, Phillips, Enron
/Oxy and Marathon.

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


INDIA: India working on resolving Enron crisis-Minister.

04/25/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW DELHI, April 25 (Reuters) - India's power minister said on Wednesday the 
government wanted an amicable settlement of the bitter payment row between 
the Indian unit of U.S.-based Enron Corp and a state power utility. 
At the same time, the minister Suresh Prabhu said termination of the project 
would not hurt foreign investment. He dismissed warnings by analysts that 
winding up the $2.9 billion project would be a blow to India's efforts to woo 
foreign investors.
"The government would react to the situation as it develops," he said. "We 
have no such worry that FDI (foreign direct investment) will be adversely 
affected." 
Enron is the largest single foreign investor in India through Dabhol but the 
project has been embroiled in controversy since the mid-1990s over 
accusations of high costs and corruption. 
The company this week asked creditors at a meeting in London to approve 
taking steps toward terminating the project. 
Dabhol Power Co, 65-percent-owned by Enron which operates a 2,184 megawatt 
power plant in the western Indian state of Maharashtra has been unable to 
collect $48.3 million (2.26 billion rupees) for power supplied to the state 
electricity board even after invoking state and federal government 
guarantees. 
The virtually bankrupt state electricity board has said it is unable to buy 
the costly power generated by Dabhol. 
The row has escalated and has involved the federal government which gave 
counter-guarantees to Dabhol in event the state electricity board failed to 
pay. 
"The federal government is actively looking at ways to resolve the issue and 
the Maharashtra government is setting up a panel, which will have a federal 
representative," Prabhu told reporters. 
Asked whether he was worried about the prospect of Enron terminating the 
project, Prabhu said: "There is life after death and there is power beyond 
Dabhol. It produces just 0.7 percent of the total electricity generated." 
(US$1 = 46.850 rupees).

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


Enron Dabhol Pullout Won't Hurt India Foreign Invest -Min

04/25/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI -(Dow Jones)- Foreign direct investments into India's power sector 
won't be affected if the U.S. energy major Enron Corp. (ENE) decided to pull 
out of the Dabhol Power project in the western Indian state of Maharashtra, 
the Indian Power Minister Suresh Prabhu told a news conference Wednesday. 
"There's life after death and power beyond Dabhol. If Enron decides to pull 
out, it won't make much of a difference to us as they generate only 0.7% of 
India's total generation capacity. Their pullout won't have any bearing on 
the foreign direct investments as far as the Indian power sector is 
concerned," Prabhu told reporters.
Enron holds a controlling 65% stake in Dabhol. Other stakeholders include the 
Maharashtra State Electricity Board with 15%, General Electric Co. (GE) with 
10% and Bechtel (X.BTL) with 10%. 
As reported, the Dabhol Power Co., may take a preliminary step toward ending 
its project near Bombay, as part of a dispute over its inability to get paid 
for the electricity it generates, a Dabhol board member said. 
At a meeting Wednesday in London, Dabhol's board is to consider a preliminary 
termination notice, according to Don Sturmer, a vice president at Bechtel 
Enterprises and member of the board at Dabhol Power. 
Issuing such a notice could see Dabhol suspend deliveries as it negotiates 
its payment disputes, Sturmer said. 
However, Wednesday also saw the Maharashtra state power utility say it would 
pay outstanding electricity bills for March as part of an ongoing dispute 
over tariffs with Enron. 
In recent days, Indian media has speculated that Enron may withdraw from the 
project. 
The $3 billion Dabhol project is India's largest foreign investment to date. 
-By Himendra Kumar, Dow Jones Newswires; 91-11-461-9427; 
himendra.kumar@dowjones.com

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


India's Law Min: Court System Hindering Economic Progress

04/25/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI (AP)--India's law minister urged the country's courts Wednesday to 
help economic reforms flourish and to not obstruct them by entertaining a 
barrage of cases against Indian and foreign companies. 
"Don't interfere in every matter just because somebody has brought an 
invitation for you to interfere," Arun Jaitley, the minister for law, justice 
and company affairs, said in an address before hundreds of business leaders.
"Major projects cannot be held up because of judicial cases. Delays and lack 
of interest are the result," said Jaitley, who is a lawyer by profession. 
India's courts, clogged by millions of pending cases, are notorious for 
delays in judgment. Several top international and domestic companies have 
also been adversely affected by court rulings on petitions by environmental 
and labor activists and other voluntary groups. 
More than 21,000 cases are pending in the Supreme Court. In the state high 
courts, more than 3.4 million cases are still to be decided on, Jaitley said. 
The number of pending cases before the subordinate courts has remained 
stagnant at 20 million for the last five years, he said. 
A $4.5 billion dam project across the Narmada River was delayed for four 
years because of a flurry of litigation by environmental activists. The 
objections were finally overruled by the Supreme Court. 
Last year, the U.S. power company Cogentrix, based in Charlotte, N.C., 
abandoned a $1.3 billion, 1,000-megawatt electricity project in the southern 
state of Karnataka after legal wrangles delayed the project by seven years. 
"We have seen cases in which investment was delayed by half a dozen 
litigations and finally the investor said, `I don't want to invest, thank 
you,"' Jaitley said. He was speaking at the annual conference of the 
Confederation of Indian Industry, an influential industry group. 
The wrangles have hampered private electricity generation in India, which 
needs an additional 100,000 megawatts of power per year, said Power Minister 
Suresh Prabhu, speaking at the same conference. 
Jaitley said that the government and courts had tried to enlarge their 
jurisdiction into areas traditionally outside their control. 
He mentioned the changes in economic policy that have swept the country since 
Prime Minister P.V. Narasimha Rao's government started unshackling controls 
on the socialist-style economy in 1991. 
"We need to tune ourselves to the changes taking place in the commercial 
world," he said. 
A $3 billion project of the U.S. energy giant Enron Corp. (ENE), India's 
biggest-ever foreign investment, is currently facing problems with the 
government-run utility in the western Maharashtra state, which says the power 
generated by Enron is too expensive compared to prevalent local prices. The 
state wants to renegotiate the contract. 
Jaitley also gave the example of 800,000 cases related to bounced checks - 
litigation that he said didn't need years to be decided in courts. He said 
there were also too many vacancies in judicial appointments.

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