Power Traders See Profits Rise On High Prices
The Wall Street Journal, 04/18/01

Business and Finance
The Wall Street Journal, 04/18/01

Briefcase: Skilling, analyst verbally butt heads 
Houston Chronicle, 04/18/01

Energy giants have a season to remember 
Houston Chronicle, 04/18/01

Edison Posts Losses for Quarter, Year Energy: The utility parent declares a 
huge write-off for 2000 costs. Meanwhile, electricity suppliers are big 
winners.
Los Angeles Times, 04/18/01

Edison reports 4th-quarter losses totaled $2.55 billion
The San Francisco Chronicle, 04/18/01

Chip Giant Cutting 2,500 Jobs
The Washington Post, 04/18/01

California Power Utility Loses $2.5 Billion in Fourth Quarter
KRTBN Knight-Ridder Tribune Business News: The Orange County Register - 
California, 04/18/01

Enron's CEO fires from the lip
The Globe and Mail, 04/18/01

Bill restoring direct access advances
The San Francisco Chronicle, 04/18/01

Action on energy trading floors reverberate in power-hungry California
Associated Press Newswires, 04/18/01

Nigeria's electricity firm 'anxious' for US power project
Agence France-Presse, 04/18/01

US Government Issues Warning Letter to Italy's DeLonghi S.p.A., 
NetCompliance, Inc., Reveals
Business Wire, 04/18/01

CHIEF MINISTER OF INDIA'S MAHARASHTRA WRITES TO PM ON ENRON
Asia Pulse, 04/18/01

India: Enron slaps two more arbitration notices
Business Line (The Hindu), 04/18/01

USA: WRAPUP1-Calif. utility has huge loss, Texans strike it rich.
Reuters English News Service, 04/17/01

Texas Panel Cites Lessons From Calif Power Crisis
Dow Jones Energy Service, 04/17/01

Enron President & CEO - Interview
CNBC/Dow Jones Business Video, 04/17/01

Dynegy passes Street target
Marketing and trade power Q1 results
CBSMarketWatch.com, 04/17/01

Enron, Duke, Dynegy 1st-Qtr Profits Rise as Energy Sales Surge
Bloomberg, 04/17/01

Enron earnings jump by 20%
Financial Times.com, April 17, 2001



Power Traders See Profits Rise On High Prices
By Rebecca Smith
Staff Reporter of The Wall Street Journal

04/18/2001
The Wall Street Journal
A3
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Big power traders Enron Corp., Dynegy Inc. and Duke Energy Corp. reported 
robust first-quarter earnings, beating Wall Street estimates and capitalizing 
on a strong seller's market for electricity and natural gas, particularly in 
the West. 
For the first quarter, Enron had net income of $425 million, up 25% from $338 
million a year earlier. Revenue nearly quadrupled to $50.1 billion from $13.1 
billion. On a diluted-share basis, profit rose 22% to 49 cents from 40 cents 
a year earlier.
Enron, Houston, the nation's biggest energy trader, posted a 59% increase in 
the value of its retail energy-services contracts as companies sought a haven 
from volatile electricity and natural-gas prices. Quarterly revenue for the 
enterprise rose to $693 million from $314 million a year earlier. 
"There's strong interest all across the country," said Enron Chief Executive 
Jeffrey Skilling, and not just in places with high prices. The company also 
showed solid overall growth in telecommunications business, despite some 
growing pains in its broadband-services unit. 
Mr. Skilling said, though, that he expects the bubble in energy prices to 
burst in a year or so, with prices dropping to more normal levels as 
natural-gas prices moderate and a slew of new electricity-generating plants 
come on line. 
Dynegy, also a Houston-based energy firm, reported first-quarter net of 
$139.5 million, double the $69 million posted for a year earlier. Total 
revenue rose to $14.2 billion from $5.3 billion. On a per-share basis, Dynegy 
earned 41 cents, up from 23 cents a year earlier. 
Dynegy Chairman Chuck Watson said he sees continued price volatility as a 
good profit opportunity for the company. Dynegy, which acquired utility 
Illinova Corp. in February 2000, continues to add aggressively to its 
generating-plant portfolio and is nearly one-third of the way to its stated 
goal of controlling 70,000 megawatts of plant capacity by 2005. "Ultimately, 
we want to control 10% of the electric power marketplace," said Rob Doty, 
chief financial officer. 
Neither Enron nor Dynegy has disclosed the amount of reserves they have taken 
against possible losses stemming from power supplied to California's troubled 
utilities. 
Pacific Gas & Electric Co., the state's largest utility, filed for court 
protection under U.S. bankruptcy law earlier this month. Southern California 
Edison could suffer the same fate if an agreement reached with California's 
governor, calling for the state purchase of certain utility assets, isn't 
consummated within four months. 
The two utilities took a combined $6.6 billion in charges against 2000 
earnings because of excessive wholesale power costs incurred in the latter 
half of the year. 
Barry Abramson, utilities analyst at UBS Warburg, says the two companies are 
probably being cagey about their reserve levels for fear that regulators or a 
bankruptcy court judge "might say to them `you don't get to recover what 
you've already reserved.' " 
Duke Energy, of Charlotte, N.C., posted first-quarter net of $458 million, up 
17% from $393 million a year earlier. Earnings per share rose to 61 cents 
from 53 cents. Duke said revenue more than doubled to $16.5 billion. 
Unlike Enron and Dynegy, Duke disclosed that it took a $110 million reserve 
in last year's fourth quarter to cover any loss associated with the 
California market. No additional reserve was taken in the first quarter, the 
company said. 
Duke's wholesale energy enterprises reported earnings, before tax and 
interest expenses, of $348 million, four times the result for the same 
quarter of 2000. The unit now has more than 13,600 megawatts of generating 
capacity in operation or under construction and plans to add a dozen or so 
plants each year through 2003. It was a major purchaser of power plants of 
which PG&E divested itself. 
At 4 p.m. in New York Stock Exchange composite trading, Enron shares were up 
56 cents to $60; Dynegy shares were up $2.80 to $55.95; and Duke Energy 
shares were up $2.09 to $44.60. 
--- 
Journal Link: Energy crisis? Not for everyone. See a video report of Enron 
President and CEO Jeffrey Skilling discussing how a tight market is helping 
fuel the company's growth, in the online Journal at WSJ.com/JournalLinks.

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



What's News

Business and Finance

04/18/2001
The Wall Street Journal
A1
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Enron, Dynegy and Duke posted robust earnings, beating expectations and 
capitalizing on a strong seller's market for electricity and natural gas. 
Edison reported a record quarterly loss of $2.55 billion on a huge charge 
related to the California energy crisis. 
--- 
Energy prices in New York could be much higher than previously forecast 
unless the state moves swiftly to find sites for new power plants, a study 
said. 
--- 
Stocks eked out small gains despite Cisco's earnings warning. The Nasdaq 
closed up 13.65 points on a late rally. 
--- 
Excite@Home warned that first-quarter results would be weaker than expected 
due to an advertising slump. 
--- 
Markets -- 
Stocks: NYSE vol. 1,110,501,800 shares, Nasdaq vol. 1,844,891,898. Dow Jones 
industrials 10216.73, up 58.17; Nasdaq 1923.22, up 13.65; S&P 500 index 
1191.81, up 12.13. 
Bonds:(4pm) 10-yr Treas up 18/32, yld 5.196%; 30-yr Treas up 20/32, yld 
5.649%. 
Commodities: Oil futures $28.24 a barrel, off $0.55; Dow Jones-AIG futures 
index 109.381, off 0.868; DJ spot index 108.97, up 0.27. 
Dollar: 123.33 yen, off 1.25; 1.1313 euros, up 0.0035; 2.2129 marks, up 
0.0072.

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





April 18, 2001
Houston Chronicle
Briefcase: Skilling, analyst verbally butt heads 
Enron Corp.'s top executive Tuesday fired off the same vulgarity that brought 
President Bush embarrassment when he unwittingly uttered it in front of an 
open microphone last fall. But unlike Bush, Enron President and CEO Jeffrey 
Skilling says he knew the microphone was on during a conference call on 
first-quarter earnings. Skilling laid down the insult in an exchange with 
Richard Grubman, managing director of Highfields Capital Management in 
Boston, who asked to see Enron's balance sheet and was told it would not be 
available until later. "You're the only financial institution that can't come 
up with balance sheet or cash flow statement after earnings," Grubman 
grumbled. "Well, thank you very much, we appreciate that. Asshole," Skilling 
responded with a laugh. "The specific fellow that I was not real happy with 
is a short-seller in the market. I don't think it is fair to our shareholders 
to give someone a platform like that they are using for some personal vested 
interest related to their stock position." Grubman disputed Enron's assertion 
the information was not available. 
-- Reuters News Service 







April 18, 2001
Houston Chronicle
Energy giants have a season to remember 
Winter price spike helped Enron, Dynegy earnings 
By MICHAEL DAVIS 
Copyright 2001 Houston Chronicle 
Houston energy companies Enron Corp. and Dynegy posted strong increases in 
first-quarter earnings Tuesday largely because of much higher prices received 
for natural gas and power sold during the winter. 
Enron's revenues topped $50 billion during the first quarter, equal to half 
of what the company generated during the entire year of 2000. The company on 
Tuesday said it was increasing its earnings expectations for the year 2001 to 
a range of $1.75 to $1.80 per share, up from $1.70 to $1.75. 
"We really don't project revenues, but with a $50 billion first quarter, we 
could break $200 billion this year," said Jeffrey Skilling, Enron's chief 
executive officer. 
Both Enron and Dynegy are owed millions in California, where Enron markets 
power and natural gas and Dynegy owns power plants and sells natural gas and 
power as well. 
Enron, which is owed $570 million by bankrupt utility Pacific Gas & Electric 
Co., did not address its California exposure in its earnings report. The 
topic was discussed at length with analysts on a conference call. 
Skilling said in a telephone interview that the company is fully reserved 
against its California receivables, but the company has not specified how 
much. Enron's raising of earnings expectations for the year should indicate 
the company is confident its California exposure will not be a problem, 
Skilling said. 
"We are continuing to supply natural gas and electricity to PG&E," Skilling 
said. 
M. Carol Coale, energy analyst with Prudential Securities in Houston, 
estimates Enron has taken a reserve of about 75-80 percent of what it is owed 
in California. 
"Enron has done a good job of addressing the way they handle risk, not just 
in California but across the country because other regions are likely to be 
short of power as well," Coale said. 
Dynegy said its West Coast Power joint venture with NRG Energy, which owns 
and operates the company's California power plants, has mitigated 
substantially all of its credit exposure in the California market through its 
long-term supply agreement with the state's Department of Water Resources 
that runs through 2004. 
Dynegy disclosed it was owed $265 million from power sales to California in a 
a recent filing with the Securities and Exchange Commission. 
Enron reported first-quarter net income of $425 million, or 49 cents per 
share, on revenues of $50.1 billion. That compared with net income of $338 
million, or 40 cents per share, on revenues of $13.1 billion in the first 
quarter of 2000. 
Enron's net income included a $19 million after-tax gain from a change in 
accounting practices. Excluding that item, the company earned $406 million, 
or 47 cents per share. 
Analysts had expected the company to earn 45 cents per share for the quarter, 
according to estimates compiled by First Call/Thomson Financial in Boston. 
Enron shares closed Tuesday at $60, up 56 cents per share. 
Dynegy reported first-quarter net income of $139.4 million, or 41 cents per 
share, on revenues of $14.1 billion. That compared with net income $69 
million, or 23 cents per share, on revenues of $5.3 billion in last year's 
first quarter. 
Dynegy's first-quarter 2001 results included a $2.02 million after-tax gain 
because of a change in accounting principals. Without that gain, the company 
earned $137.4 million, or 41 cents per share. 
Analysts had expected Dynegy to earn 40 cents per share during the quarter, 
according to First Call/Thomson Financial. 
"It was a very solid quarter," said Jeff Dietert, vice president of research 
at Simmons & Company International in Houston. "I think Dynegy is in an 
excellent position to have sustained earnings growth in excess of 20 
percent." 
Dynegy's shares closed Tuesday at $55.95, up $2.80 per share. 
Results reported at Enron's various businesses included: 
? Wholesale Services: Enron's division that sells natural gas and 
electricity, among other commodities, had an operating profit of $755 million 
in the first quarter, up from $429 million in the year-ago quarter. 
? Retail Energy Services: Enron's business that offers energy management 
products to business customers in North America and Europe had operating 
income of $40 million in the first quarter, up from $6 million in the first 
quarter of 2000. 
? Transportation and Distribution: Enron's unit that includes its natural gas 
pipelines and its Portland General Electric utility had operating income of 
$193 million, down from $233 million in the same period last year. 
? Broadband Services: Enron's broadband business reported a $35 million 
operating loss for the first quarter. This unit was not broken out separately 
in the year-ago quarter. 
Results reported at Dynegy's business units included: 
? Marketing and Trade: The company's unit that sells natural gas and power 
almost doubled its operating profit to $100.3 million, up from $50.3 million 
in the 2000 first quarter. This one unit contributed 73 percent of the 
company's total first-quarter net income as the average price of gas more 
than doubled from a year ago. 
? Midstream Services: Dynegy's unit that processes and markets natural gas 
liquids had an operating profit of $22.9 million, down slightly from $24.2 
million. 
? Illinois Power: Dynegy's electricity transmission and distribution utility 
had an operating profit of $25.9 million, up sharply from $4.9 million. The 
company credited cost reductions and higher winter demand for the increase. 
? Global Communications: Dynegy's newest division, which markets and trades 
broadband services, had an $11.6 million operating loss from start-up and 
expansion costs. The unit was not broken out from last year's first quarter 
earnings. 





Business; Financial Desk
Edison Posts Losses for Quarter, Year Energy: The utility parent declares a 
huge write-off for 2000 costs. Meanwhile, electricity suppliers are big 
winners.
NANCY RIVERA BROOKS; SARAH HALE
TIMES STAFF WRITERS

04/18/2001
Los Angeles Times
Home Edition
C-1
Copyright 2001 / The Times Mirror Company

Edison International on Tuesday joined its partner in deregulation 
dysfunction, PG&E Corp., in declaring a huge write-off of electricity and 
other costs. That resulted in large net and operating losses at the 
Rosemead-based company for the fourth quarter and all of 2000. 
But both utility parents continued to hold out hope that they would 
eventually recover those costs and return their ailing balance sheets to good 
health. PG&E, whose utility arm Pacific Gas & Electric Co. filed for 
bankruptcy law protection April 6, posted its results Monday; both companies 
delayed their filings by two months because of the uncertainty surrounding 
their financial predicaments.
In stark contrast, in the last two day, several electricity suppliers to 
California's gold-plated power market reported sharply higher earnings for 
the first quarter. 
Together, the earnings statements provide a handy scorecard of who has won 
and who has lost in the crisis that has sizzled through the state's 
electricity business in the last year. 
Electricity suppliers "certainly are doing well," said Douglas Christopher, 
utility analyst with Crowell, Weedon & Co. "If you control the source of 
supply, you control a lot." 
Consumer advocate Michael Shames sounded a darker note. 
"Dollars are flowing out of the state at an accelerated rate," said Shames, 
executive director of the Utility Consumers' Action Network in San Diego. 
"It's leaving the utilities and flowing right into the hands of the energy 
suppliers. They can't lose. The contrast is disgusting." 
As expected, Edison International took a $4.2-billion pretax charge against 
earnings, which translated into $2.5 billion after taxes. 
The charge primarily reflected debts the company's beleaguered Southern 
California Edison subsidiary piled up last year as wholesale electricity 
prices skyrocketed and the utility was unable to charge customers all that it 
paid for power because of a retail rate freeze. 
Edison said it took the charge because of a recent decision by the California 
Public Utilities Commission that forced Edison and PG&E to recalculate 
electricity- and deregulation-related debt to include past profit earned 
during the first two years of deregulation, when wholesale costs were lower 
than retail rates. 
That charge resulted in net losses for Edison International of $2.5 billion, 
or $7.83 per share, for the fourth quarter and $1.9 billion, or $5.84 per 
share, for the year. In 1999, the company posted net income of $96 million 
for the fourth quarter and $623 million for the year. 
Edison posted a fourth-quarter operating loss of $3.8 billion, versus 
operating income of $326.9 million in 1999. Operating loss for 2000 was $1.73 
billion, compared with operating income of $1.75 billion in 1999. 
Excluding the electricity write-off, Edison International would have earned 
$578 million for 2000; Southern California Edison would have earned $471 
million in 2000 without the write-off, versus $484 million in 1999. 
"Today's financial charge, painful as it is for the company, only recognizes 
the well-known reality of SCE's large, unreimbursed costs of serving its 
customers," said John E. Bryson, chairman and chief executive of Edison 
International. "What is important now, however, is not so much compliance 
with accounting rules but whether Edison ultimately has a path to recover its 
costs." 
Edison executives said the agreement it signed last week with Gov. Gray 
Davis, if enacted by the state Legislature and the PUC, would allow the 
company to recover most of the costs it wrote off Tuesday. The agreement 
would allow for the sale of Edison's transmission grid to the state for $2.76 
billion as well as for the sale of revenue bonds to help repay debt. 
Only "prompt implementation" of the agreement, Bryson warned, "can avoid the 
large costs of an SCE bankruptcy and make it possible for the company to 
restore its financial health and ability to maintain a reliable power grid." 
Legislators have been grousing about the agreement, raising fears that 
passage might not be smooth. 
"This is not a slam dunk," said Brian Youngberg, senior utility analyst for 
the Edward Jones investment firm in St. Louis. "If everything falls into 
place, they may well recover a large portion of the charge. But if it 
doesn't, all bets are off." 
Bankruptcy, whether voluntary or forced, remains a possibility, he said. 
Consumer activists have opposed the agreement as a bailout by the state. 
"I have very little sympathy for the utilities," said Mindy Spatt, media 
director for the Utility Reform Network in San Francisco. "They supported the 
deregulation of rates. They made their bed; now they have to lie in it." 
Several electricity suppliers to California reported gigantic earnings surges 
for the quarter ended March 31: 
* Duke Energy Corp. of Charlotte, N.C., saw a 63% increase in first-quarter 
operating profit, jumping to $554 million from $339 million a year ago. 
* Houston-based Dynegy Inc. said its operating income increased 40%, 
improving to $255 million in the first three months of 2001 from $182 million 
a year earlier. 
* Enron Corp. of Houston, which owns no power plants in California but is the 
world's biggest buyer and seller of electricity and natural gas, said it 
posted operating income of $406 million in the first quarter, compared with 
$338 million in the same period last year, a 20% increase. 
* Reliant Energy, another Houston energy conglomerate, said Monday that 
operating profit for the first quarter rose 35%, to $460 million from $341 
million in the year-ago quarter. 
Carol Coale, an analyst with Prudential Securities Inc. in Houston, said 
increased demand for electricity and natural gas in California and the rest 
of the country fueled the earnings increases. 
"Clearly, the California energy crisis has raised the bar on those power and 
gas trading and marketing profits," Coale said. "Opportunities have existed 
outside California as well." 
But the companies all took great pains to note that California operations 
were only a small part of their businesses. Dynegy President Steve Bergstrom 
said the company has been "unfairly and inaccurately accused of withholding 
power from the California market" to drive up prices and profit. 
When asked about big profits at electricity suppliers, Edison Chief Financial 
Officer Ted Craver quipped: "We're envious." But he quickly turned serious, 
declining to comment on whether the generators were profiting at the 
utility's expense. 
"This is very, very serious business for us," Craver said, noting that the 
company could take further charges that "could completely extinguish our 
equity at the utility." 
But the utilities are not the only companies facing possibly lowered 
expectations, because a political or regulatory backlash could eventually 
hinder future profit for generators as well. 
"This free lunch is not going to last forever," utility analyst Christopher 
said. 
Edison International shares gained 3 cents to close at $11.88 on the New York 
Stock Exchange; the stock remains well off its 52-week closing high of $26.13 
on Sept. 13. 
The generators' stocks have generally fared well as the broader market has 
declined. In trading Tuesday, all gained on the NYSE: Duke closed $2.09 
higher at $44.60 a share; Dynegy rose $2.80 to $55.95; Enron gained 56 cents 
to $60; and Reliant was up $1.92 to $48.92. 
* 
Associated Press was used in compiling this report. 
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC) 
Shifting Fortunes for Energy Players 
Financial results reported this week by California's two major utilities and 
by out-of-state energy companies that supply them show the dramatic shift in 
fortunes in the power business over the last year. 
* 
* 
PG&E in 2000 
-$4.1 billion 
* 
Edison in 2000 
-$2.5 billion 
* 
. . . While Their Suppliers Boom 
Operating income for key energy suppliers, in millions of dollars, first 
quarter of 2001 versus first quarter of 2000: 
* 
Sources: Company filings, Bloomberg News, Times research 
Researched by NONA YATES and TOM PETRUNO/Los Angeles Times

PHOTO: A worker in Edison's grid-control room in Alhambra.; ; PHOTOGRAPHER: 
Los Angeles Times; PHOTO: Edison CEO John E. Bryson said the agreement 
reached with the state needs to be applied soon.; ; GRAPHIC: Shifting 
Fortunes for Energy Players, Los Angeles Times; 

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


BUSINESS
Edison reports 4th-quarter losses totaled $2.55 billion
Carolyn Said
Chronicle Staff Writer

04/18/2001
The San Francisco Chronicle
FINAL
D.1
(Copyright 2001)

Edison International, the parent company of Southern California Edison Co., 
posted a $2.55 billion quarterly loss yesterday, a day after its Northern 
California counterpart, PG&E Corp., reported a $4.1 billion loss. 
Meanwhile, three out-of-state energy providers -- Dynegy Inc., Enron Corp. 
and Duke Energy Corp. -- reported stellar profits for the first quarter of 
this year but hastened to deflect charges that those profits came at 
California's expense.
"The moral is: Some of these guys (the power companies) are unregulated; PG&E 
and Edison are not," said Paul Patterson, an energy- industry analyst at 
Credit Suisse First Boston in New York. 
The power companies "have the flexibility to do what they want in the power 
market," Patterson said. "The regulated utilities were not free to act in a 
manner that would have have probably mitigated their (financial) situation." 
After teetering on the edge of bankruptcy for months, Edison reported its 
fourth-quarter results yesterday. The report had been delayed during its 
bailout negotiations with the state. 
Most of the $2.55 billion loss stemmed from writing off the $2.52 billion 
difference between what Edison paid for electricity and what it was allowed 
to charge customers. Rates were frozen under state law. 
Without that write-off, Edison would have lost $28 million for the quarter 
ended Dec. 31, 2000 -- still a drop from the $96 million in profit it made in 
the fourth quarter of 1999. 
RECOUPMENT PLANS 
Edison of Rosemead (Los Angeles County) still hopes in one of two ways to 
regain the money it wrote off. It is suing California in federal court in Los 
Angeles for the right to pass along its unrecovered wholesale costs to 
customers. Alternatively, if Gov. Gray Davis' plan to keep the company from 
bankruptcy goes through, it would allow Edison to reverse the $2.52 billion 
charge, the company said. Under the plan, Edison would recoup its losses by 
selling its transmission lines to the state for $2.76 billion and issuing 
more than $2 billion in bonds to pay back debt. 
The rescue plan's future is far from certain. Many California legislators 
reportedly oppose the plan, which -- after protracted negotiations -- was 
quickly hammered out in the aftermath of Pacific Gas and Electric Co.'s 
Chapter 11 bankruptcy filing earlier this month. 
If the deal falls through, Edison's creditors are likely to force the company 
to follow in PG&E's footsteps in filing bankruptcy. 
Edison's annual results, also reported yesterday, showed a loss of $1.9 
billion. Excluding the writeoff, it earned $578 million for 2000, compared 
with $623 million in 1999. 
Shares of Edison rose 3 cents to $11.88. The stock has fallen 24 percent this 
year. 
PROFITABLE SELLERS 
The news was considerably sunnier on the other side of the energy equation, 
where soaring wholesale prices and demand led to runaway profits for energy 
sellers: 
-- Enron -- Houston's Enron, the world's top buyer and seller of natural gas 
and electricity, earned $425 million (49 cents per share) for the first 
quarter, up from $338 million (40 cents) in the year- ago quarter. Sales for 
the quarter ended March 31 zoomed to $50.1 billion, almost four times the 
$13.1 billion collected from sales a year ago. 
The results include a $19 million (2 cents per share) gain, because of the 
adoption of new accounting standards; excluding that, Enron earned $406 
million (47 cents). 
Enron's stock closed up 56 cents at $60. 
-- Dynegy -- A major power supplier in California, Houston's Dynegy saw 
first-quarter earnings more than double, to $139.5 million (41 cents), 
compared with $69 million (26 cents) in the year-ago quarter. 
Revenues almost tripled to $14.2 billion, from $5.3 billion during the same 
period last year. 
Shares of Dynegy closed up $2.80 at $55.95. 
-- Duke -- Responsible for about 5 percent of California's energy supply, 
Duke of Charlotte, N.C., saw first-quarter earnings rise 51 percent to $458 
million (74 cents), up from $393 million (49 cents) during the same period in 
2000. 
Revenues for the quarter increased 126 percent over the same period last year 
to $16.5 billion. 
Duke's shares closed at $44.60, up $2.09. 
All three energy firms took pains to defend themselves from charges that they 
have taken advantage of California's energy crisis to enrich themselves. 
Dynegy said sales to California "did not make a material contribution" to its 
profit growth, instead, attributing it to cold- weather demands in Northern 
states. 
In a statement, President and Chief Operating Officer Steve Bergstrom said 
the company had been unfairly and inaccurately accused of withholding power 
from the California market. 
Enron said 80 percent of the growth in its power deliveries came on the East 
Coast. 
"We've been called all sorts of names," said Harvey Padewer, president of 
Duke Energy Services. "The reality is we're selling most of our power for 
below-market prices."

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


Financial
Chip Giant Cutting 2,500 Jobs

04/18/2001
The Washington Post
FINAL
E02
Copyright 2001, The Washington Post Co. All Rights Reserved

Semiconductor giant Texas Instruments said it will lay off 2,500 workers, or 
6 percent of its workforce, and expects double-digit declines in sales to 
continue through the first half of the year. The company said revenue fell 17 
percent in the first quarter and it expects a 20 percent drop in the second 
quarter because of weakening demand for its semiconductor chips in cell 
phones and other products. Texas Instruments posted net income of $230 
million, down from earnings of $421 million in the year-ago quarter. 
Internet Service Settles Copyright Suit
RecordTV.com agreed to pay $50,000 to a group of movie studios and to stop 
offering recorded shows without the studios' permission, settling a 
nine-month legal fight. The Internet-based TV taping service had signed up 
100,000 people who could have the site record specific TV shows and then play 
them back over the Internet at a later date. Twelve members of the Motion 
Picture Association of America, including MGM and Disney, filed a lawsuit in 
federal court in June, alleging copyright infringement. 
MORE NEWS 
AOL Time Warner was sued by a California software company that claims America 
Online version 6.0 infringes on a copyright for software used to play MP3 
audio files. Privately owned Playmedia Systems seeks a court order to stop 
AOL's use of the allegedly infringing software, as well as damages in excess 
of $47 million. Playmedia contends that AOL's 1999 purchase of Nullsoft, 
which licensed older technology produced by Playmedia, did not give it the 
right to use the software in AOL 6.0. 
Siebel Systems, a maker of business software, is expected to lay off hundreds 
of workers because of a worsening sales slump. The exact number of jobs being 
cut is expected to be disclosed as part of Siebel's first-quarter earnings 
announcement, scheduled for release today after the markets close. Estimates 
on Siebel's layoffs have ranged as high as 20 percent of its 7,400 workers. 
The Federal Energy Regulatory Commission ordered power suppliers to 
California to reimburse the state $587,000 -- far less than in earlier months 
-- for overcharges in March. Under the order, Dynegy Power Marketing must pay 
$469,662.60, Mirant Corp. must pay $92,620 and Williams Energy Services must 
pay $25,574.25. 
AARP announced a campaign against predatory mortgage lending. The 
organization for people over 50 plans to intensify its lobbying for state 
laws against such practices. AARP posted information about its campaign at 
www.aarp.org/homeloans. 
The Commerce Department wants to impose penalties on foreign steel 
manufacturers that are subsidized by their governments, saying they are 
hurting the American steel industry. The companies in India, Indonesia, South 
Africa and Thailand make hot-rolled steel, used to manufacture cars and heavy 
equipment. The Commerce Department ruled that penalties should be imposed for 
damage to 20 U.S. steel companies in 13 states. 
INTERNATIONAL 
Philips Electronics said it will slash as many as 7,000 jobs, or about 3 
percent of its workforce, to offset a slowdown of "extraordinary speed" in 
demand for technology products. Europe's largest electronics maker also 
reported a 91 percent drop in first-quarter earnings, to $93.3 million, and 
warned that it may post a loss in the second quarter. 
LOCAL BUSINESS 
The U.S. Army and Johns Hopkins University's Applied Physics Laboratory in 
Laurel will create and operate a national biotechnology center to research, 
develop, test and deliver products to benefit the Army. Over the next year, 
APL and the Army will decide on the center's location, organization and 
participants. 
Smithfield Foods agreed to buy Moyer Packing in the pork producer's first 
foray into the beef sector. Souderton, Pa.-based Moyer, with annual sales of 
about $600 million, is the country's ninth-largest beef processor. Terms of 
the acquisition were not released. 
EARNINGS 
Edison International, owner of California's second-largest utility, had a 
$2.5 billion loss in the fourth quarter, including a charge for power-buying 
losses that have driven the company to the brink of bankruptcy. Edison, based 
in Rosemead, Calif., lost $7.83 a share, including the charge. Excluding the 
charge, the company had a loss from operations of $28 million, compared with 
net income of $96 million a year earlier. Meanwhile, PG&E -- whose Pacific 
Gas & Electric unit filed for bankruptcy protection earlier this month -- 
said it lost $4.1 billion in the fourth quarter and $3.4 billion for the 
year. The loss was entirely due to a before-tax charge of $6.9 billion for 
power-buying losses. 
Big banks reported mixed first-quarter results. FleetBoston Financial said 
its earnings fell 6.2 percent, to $870 million, while Bank One reported that 
its profit declined 1.5 percent, to $679 million. But earnings at Wells Fargo 
rose 12.5 percent, to $1.17 billion, and Mellon Financial's profit increased 
8 percent, to $264 million. 
Philip Morris's profit rose 4 percent in the first quarter as its 
industry-leading tobacco business expanded its market share and food profits 
swelled as Nabisco brands were added to its Kraft Foods roster. The maker of 
Marlboro cigarettes, Maxwell House coffee, Post cereals and Oscar Mayer meats 
earned $2.09 billion, versus $2.01 billion a year ago. 
Johnson & Johnson's first-quarter profit rose 14 percent, outpacing a 6.5 
percent gain in revenue, on improved sales of its most profitable products, 
such as the Procrit anemia drug. Net income rose to $1.5 billion, from $1.31 
billion a year earlier. Sales rose to $7.79 billion. 
Enron, the largest energy-trading company, said first-quarter profit rose to 
$425 million, from $338 million a year earlier, as increased electricity and 
natural gas demand sent prices surging in California and other parts of the 
country. Revenue almost quadrupled, to $50.1 billion from $13.1 billion. 
Sprint and its mobile phone unit, Sprint PCS, came up shy of expectations. 
Sprint, the nation's No. 3 long-distance carrier, reported that its non-PCS 
business earned $315 million, down from $1.12 billion in the same period a 
year ago. Sprint PCS reported a loss of $391 million, improving from a loss 
of $513 million in the first quarter of 2000. 
Charles Schwab Corp. said first-quarter profit fell 68 percent, to $97 
million, as individual investors shunned the stock market and clients' assets 
fell. The biggest discount broker said that when acquisition-related charges 
are excluded it earned $120 million, down 63 percent from a year earlier. 
Duke Energy said first-quarter profit rose to $458 million, from $393 million 
a year ago. 
Weyerhaeuser reported a 56 percent decrease in first-quarter profit, mostly 
because of low lumber prices. The timber company had net earnings of $107 
million, compared with $244 million in the same period last year. 
First-quarter sales were $3.6 billion, down from $3.9 billion. 
Caterpillar blamed an earnings decline on weak sales of truck engines and 
mining equipment. The company reported earnings of $162 million, down from 
$258 million for the first three months of 2000. 
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News 
Service and Washington Post staff writers


http://www.washingtonpost.com 

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




California Power Utility Loses $2.5 Billion in Fourth Quarter
James B. Kelleher

04/18/2001
KRTBN Knight-Ridder Tribune Business News: The Orange County Register - 
California
Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World 
Reporter (TM)

If you're still having trouble sorting out the corporate winners and losers 
in California's power market, here's a handy mnemonic device that might help. 
Power generators generate money for their shareholders.
Power distributors distribute pain to theirs. 
The sour truth lurking behind that premise was on display once again Tuesday, 
when Dynegy Inc., Duke Energy Corp., Enron Corp. and Edison International, 
the parent company of Southern California Edison, all opened their books and 
reported earnings. 
For Edison, the cash-strapped utility that delayed reporting its 
fourth-quarter earnings for two months as it waited for a state-led bailout, 
the news was grim. The Rosemead-based company, which distributes electricity 
to most of the homes and businesses in Orange County, said it lost $2.5 
billion in the fourth quarter its worst quarter ever. 
The loss came after Edison was forced to write off the $4.2 billion it paid 
last year buying exorbitantly priced power on the state's deregulated 
wholesale market for its rate-protected customers. Edison had hoped to 
recover those outlays through higher rates and may still do so if its deal 
with Gov. Gray Davis is OK'd by state legislators. But a recent decision by 
the California Public Utilities Commission required the company to change the 
way it accounted for the outlays and absorb at least temporarily the massive 
loss. Speaking to reporters on a conference call shortly after the results 
were released, Ted Craver, Edison's chief financial officer, warned: "The 
cash position and the liquidity of the utility is in very serious 
difficulty." The company also declined to provide analysts and investors with 
any estimates for future earnings, citing California uncertainty. 
"In order to have a complete disclosure," Craver said, "we would have to 
(give investors an earnings range) and the range would be so wide as to be 
meaningless." Yet Wall Street, which has already hammered Edison shares in 
recent months, seemed to find some relief in Edison's finally coming clean. 
The stock rose 3 cents to close Tuesday's session at $11.88. Shares of PG&E, 
the utility that declared bankruptcy earlier this month and reported a $4.1 
billion loss on Monday, also rose. 
While Edison was finally acknowledging the losses it suffered last year as a 
result of the situation in California, Houston-based Dynegy, a power producer 
that co-owns almost 3,000 megawatts of generating capacity in the state, 
reported that its first quarter earnings jumped 73 percent. The news sent the 
company's shares surging 5.27 percent, or $2.80, to $55.95. 
Dynegy, of course, is one of 13 companies that the Federal Energy Regulatory 
Commission says overcharged the state's grid operator $69 million last 
December and January. The FERC has ordered the companies to either justify 
the prices or refund the money. 
Also Tuesday: Enron Corp., another Houston-based energy trading company 
that's made a killing in California, said recurring income rose 18 percent, 
beating estimates, and confidently raised its projections for the rest of 
2001. 
The earnings news lifted Enron's shares about 1 percent on Wall Street and 
prompted Salomon Smith Barney analyst Raymond Niles to raise his estimate on 
the company's 2001 earnings even though PG&E, the state's other distressed 
utility, owes Enron more than half a billion dollars. 
"We note that ENE has taken significant reserves against their estimated $580 
million receivable exposure to PCG," Niles told investors in a morning note, 
"but that this reserve has already been built into their results. We 
preliminarily raise our 2001 EPS estimate to $1.80 from $1.73." Duke Energy, 
a North Carolina-based company with a growing footprint in California, said 
first-quarter recurring income rose 51 percent. 
Asked for his reaction to the latest round of record earnings from these 
out-of-state companies, Edison's Craver quipped, "We're envious." "This is 
obviously very, very serious for us," he said. "It has eliminated our 
retained earnings within the utility. It's actually caused them to go 
negative. We have a high potential of additional quarters of additional 
write-offs which could completely extinguish our equity within the utility." 
If Edison's deal with the governor is approved by the legislature, Craver 
said the $4.2 billion charge would be reversed. 
Edison is expected to report its first-quarter earnings in mid-May.

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



Report on Business: International
Enron's CEO fires from the lip
C. BRYSON HULL
Reuter News Agency

04/18/2001
The Globe and Mail
Metro
B8
"All material Copyright (c) Bell Globemedia Publishing Inc. and its 
licensors. All rights reserved."

HOUSTON -- Enron Corp.'s top executive publicly fired off yesterday the same 
vulgarity that brought U.S. President George W. Bush embarrassing headlines 
when he unwittingly uttered it in front of an open microphone last fall. 
But unlike Mr. Bush, Enron president and chief executive officer Jeff 
Skilling says he knew the microphone was on when he called a fund manager an 
"asshole" during a conference call to discuss first-quarter earnings with 
analysts.
Mr. Bush made headlines on the campaign trail last year when he remarked to 
Vice-President Dick Cheney that a New York Times reporter was a "major-league 
asshole," not knowing that a microphone had picked up his remark. 
Mr. Skilling laid down the insult after an exchange with Richard Grubman, 
managing director of Highfields Capital Management in Boston, who asked to 
see Enron's balance sheet and was told it would not be available until its 
inclusion in a Securities and Exchange Commission filing later this month. 
"You're the only financial institution that can't come up with balance sheet 
or cash flow statement after earnings," Mr. Grubman grumbled. 
"Well, thank you very much, we appreciate that. Asshole," Mr. Skilling 
responded with a laugh. 
Mr. Skilling, whose candour frequently gives his public relations staff fits, 
said in a telephone interview that he knew the microphone was on. 
"The specific fellow that I was not real happy with is a short-seller in the 
market. I don't think it is fair to our shareholders to give someone a 
platform like that they are using for some personal vested interest related 
to their stock position," Mr. Skilling told Reuters in an interview. 
"I get a little exasperated with that sort of thing, and I want people to 
know I am exasperated," he said. 
Mr. Grubman said he felt "pretty thin-skinned" about the CEO's remark. 
He disputed Enron's assertion the balance sheets and cash flow statements 
were not ready yet, particularly in light of Mr. Skilling's mention during 
the call that Enron reconciles its credit risks and trading book daily. 
"I'm sort of at a loss as to why that was such an objectionable question," 
Mr. Grubman said. Then he added: "He's got some nerve. He and his management 
team sold seven million shares into the market 2last year, so he's plugged 
the market for a half-a-billion dollars worth of stock valued in the $70s and 
$80s. 
"Now the stock is the high $50s-low $60s and I'm an asshole because I ask 
about the balance sheet?"

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

NEWS
Bill restoring direct access advances
Greg Lucas
Sacramento Bureau Chief

04/18/2001
The San Francisco Chronicle
FINAL
A.15
(Copyright 2001)

Power users would be able to get their electricity from sources other than 
utilities under a bill approved yesterday by a key state Senate committee. 
The ability to buy power from producers, known as direct access, was removed 
by a law signed by Gov. Gray Davis in January that turned the state into the 
nation's largest buyer of electricity. Some of the largest energy users in 
the state -- manufacturers, oil refineries, office building owners, farms, 
grocery store chains -- are pushing for a return to direct access, though 
some believe the deal moving through the state Senate isn't good enough.
Direct access was killed because lawmakers feared too many large users would 
get power on their own, leaving residential and small business customers to 
shoulder the bulk of the rate increases needed to pay off the costs of the 
state's power purchases. 
"It's a question of who pays," Sen. Debra Bowen, D-Marina del Rey, said of 
her bill restoring direct access. "If you exempt some classes of customers, 
that means those costs will be borne by other customers." 
The bill was approved yesterday by the Senate Energy Committee on a 6-to-1 
vote and now goes to the Senate Appropriations Committee. 
Direct access has been around since 1996 when the state deregulated the 
electricity market. But few energy customers, business or residential, opted 
for it. 
A year ago, just 2.2 percent of all electricity customers used direct access. 
That has shrunk since January, when Enron Energy Systems and Green Mountain 
dropped most of their direct access customers. 
But big users want the right restored, hoping for more reliability and a 
better price dealing direct with generators. 
Those same big users, however, don't like Bowen's bill and prefer an Assembly 
bill now in the Senate. 
Consumer groups also oppose Bowen's bill because they think it is too kind to 
big users. The big users say it isn't kind enough. 
The chief objection by manufacturers and oil companies is the "exit fee" 
Bowen would charge them if they buy their power direct. The fee would repay 
the state for the costs it incurred buying electricity at high prices and 
selling it to users at lower capped prices. 
Consumer groups say her bill should be changed to prevent big users from 
sticking with the utility when it benefits them financially, then switching 
to direct access if that's a better deal - - at the expense of smaller 
customers. 
"They want it both ways," said Lenny Goldberg of the consumer advocate group 
The Utility Reform Network. "In when it suits their purposes and out when it 
doesn't." 
Manufacturers and oil companies prefer an Assembly bill that restores direct 
access but doesn't make them pay as much for the privilege. 
Although that bill also imposes an exit fee, customers who build their own 
power systems or choose co-generation to meet their energy needs would be 
exempt. 
That bill has been passed by the Assembly but has yet to be heard in the 
Senate.

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


Action on energy trading floors reverberate in power-hungry California
By MICHAEL LIEDTKE
AP Business Writer

04/18/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

In Houston, it's known as "the power corner." Separated by just a few city 
blocks, four major power wholesalers run trading exchanges that have a strong 
influence on energy prices nationwide. 
The trading floors run by Enron Corp., Reliant Energy Inc., Dynegy Inc. and 
Duke Energy Corp. represent ground zero in a power crisis threatening the 
quality of life in much of the western United States this summer.
By seizing upon opportunities created by deregulation, the energy traders 
have turned up the juice in the electricity business in ways similar to how 
junk bond traders ignited Wall Street in the 1980s and venture capitalists 
fueled Silicon Valley last decade. 
And thanks to an exemption granted in the early 1990s, nobody monitors daily 
trading to detect unfair or illegal practices. 
Utility bills in California have gone up nearly fourfold in the past year, to 
$27.1 billion. Without fundamental changes in the energy market, this year's 
bill will rise to $70 billion - more than $2,000 for every person in the 
state, according to operators of the state's power grid. 
The staggering electricity price increases have pushed the state's largest 
utility, Pacific Gas and Electric, into bankruptcy and left No. 2 Southern 
California Edison on the brink of insolvency. California's once-ample budget 
surplus also has shriveled, as the state is spending about $50 million a day 
to buy enough power to keep the lights on. 
The energy wholesalers say they're doing nothing wrong. 
They blame the high prices on the rising price of natural gas, burned to 
generate electricity, and the state's botched deregulation plan. By failing 
to line up reliable power ahead of time and by imposing price caps for 
consumers, the state put itself into this mess, the companies say. 
"There have been accusations of wrongdoing for eight months now and there 
isn't a shred of evidence to support the allegations," said Gary Ackerman, 
executive director of the Western Power Trading Forum, a Menlo Park, Calif., 
trade group. "People are very angry and frustrated about electricity right 
now and attorneys are trying to take that anger out on us." 
Attorneys general in Washington, Oregon and California are probing whether 
the wholesalers have violated antitrust laws or engaged in unfair business 
practices. A California state senate committee may issue subpoenas for 
records and the testimony of top energy executives, and at least five 
lawsuits accuse energy companies of market abuses. 
"This is the best fraud I have ever seen," attorney Michael Aguirre of San 
Diego, who is involved in one of the class-action suits. "The generators are 
doing everything that you think that they might be doing, only it's worse 
than you ever imagined." 
The lawsuits and investigations allege that generators have conspired to 
hijack billions of dollars from consumers and taxpayers by withholding 
electricity from energy-starved California until the last minute, and then 
supplying it at exorbitant prices. 
At Enron's headquarters in Houston, energy specialists among the company's 
1,500 traders swap electricity and natural gas contracts like stocks and 
bonds. Mathematicians, meteorologists and economists make complex 
calculations to identify where to buy the cheapest power and where to deliver 
it at the greatest profit. 
"They are extremely good at what they do," said Severin Borenstein, director 
of the University of California at Berkeley's energy institute. 
The Internet has provided the traders with the tools to do their jobs even 
better. Online marketplaces and password-protected exchanges provide them 
with invaluable real-time information on the buying and selling patterns of 
their rivals. 
Two lawsuits allege that traders have parlayed the sensitive information 
collected online to fix prices artificially high, a violation of antitrust 
laws. 
Aguirre has spent six months assembling reams of data about traders and their 
activities, but he has yet to develop concrete evidence to prove his 
price-fixing allegations. 
A March 21 report by California's electricity grid managers concluded that, 
between last May and November, 98 percent of trading bids were driven up by 
noncompetitive patterns of behavior. 
The California Independent System Operator report stopped short of accusing 
wholesalers of illegal market manipulation, but it did determine that the 
wholesalers collected as much as $6.9 billion in "unjust and unreasonable" 
rates. 
Enron says its trading system, particularly the online exchange, has resulted 
in fairer and more efficient markets. The allegations of market abuse are 
"just some sour grapes from people who didn't come up with the idea in the 
first place," said Enron spokesman Eric Thode. 
The online exchanges and other industry Web sites provide the energy traders 
with a window to see the energy availability and bids in markets around the 
country. 
Power industry critics, however, contend the Web's instant access provides 
the traders a way to exploit a delicate supply-demand balance. If the scale 
is tipped even slightly toward an inadequate supply, they say, prices soar 
and energy traders reap huge gains. 
"The whole trading thing is just a front that lets them game the market," 
Aguirre said. "They can get away with it because no one (outside the 
industry) can figure out what they are doing." 
Whatever the energy traders are doing, it's not closely monitored by 
government regulators. 
In 1993, the trading of energy products received an exemption from oversight 
by the Commodity Futures Trading Commission, a federal agency that oversees 
commodity and options trading to protect markets from fraud and manipulation. 
Energy is the only commodity that has received a blanket CFTC exemption. 
The exemption was shepherded beginning in 1992 by then-CFTC chairwoman Wendy 
Gramm, wife of Texas Sen. Phil Gramm. She left the CFTC three months before 
the exemption received final approval in 1993. That same year, she joined the 
Enron board of directors, a post that last year earned her $50,000. 
Gramm, an economist at the Mercatus Center at George Mason University, said 
she doesn't recall talking with Enron about the exemption, which she 
characterized as a routine matter triggered by an antitrust case involving 
crude oil. 
"It really didn't have anything to do with Enron or any specific company," 
said Gramm. "It had to do with a general market problem." 
In granting the exemption, the CFTC accepted the industry's contention that 
it shouldn't be subjected to the government's usual commodities regulation 
because its markets are dominated by "large sophisticated commercial 
entities" capable of protecting themselves - in short, that there would be no 
little people to hurt. 
At the time, then-CFTC commissioner Sheila Bair scoffed at the reasoning, 
comparing energy traders to boiler room sales operations that had the 
potential to violate federal anti-fraud laws. 
"Is it really that much of burden on market participants (for the CFTC) to 
retain a sliver of authority regarding fraudulent activity?" Bair wrote in a 
dissenting opinion. 
Wholesale electricity prices negotiated by the traders are eventually 
compiled in quarterly reports and reviewed by the Federal Energy Regulatory 
Commission. And while FERC by law is supposed to prevent unfair prices, a 
majority of its commissioners have advocated a hands-off approach to 
California's energy crisis, insisting that the market can correct itself. 
That posture may finally be changing somewhat. On Wednesday in San Jose, 
Calif., FERC chairman Curt Hebert told lawmakers that his agency hopes to 
begin "monitoring and mitigating" the wholesale electricity market by May 1. 
This could allow FERC to preemptively influence prices. 
Energy economists who have studied the market see signs of ruthless, but 
perfectly legal, behavior. 
Paul Joskow, an MIT economist, concluded in January that electricity 
producers deliberately withheld power to drive up prices. 
"Every business exercises market power when it can, so I don't know why 
people are so surprised that (the generators) used their market power," 
Joskow said. "I didn't see any evidence of collusion in what they did ... It 
was just good business." 
Enron's specific trading methods remain a mystery even to industry analysts, 
partly because the company considers its techniques to be proprietary. But it 
yielded a big payoff last year - an operating profit of $1.6 billion, up 160 
percent from $628 million in 1999. 
When electricity and natural gas prices soared to record highs in the fourth 
quarter, Enron's trading profit more than tripled to $538 million. 
Without providing specifics, Enron officials said the profits poured in from 
all over the country. 
"Our success is linked to efficient markets, not higher prices in California, 
or anywhere else for that matter," Steve Kean, an Enron executive vice 
president, said in January testimony before the U.S. Senate. "What we are 
interested in is competitive and well-functioning markets. Our financial 
success is not built on California's back." 
End advance for release Wednesday, April 18


AP Photo FX101 of April 16, AP Graphic POWER PLAYERS 

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




Nigeria's electricity firm 'anxious' for US power project

04/18/2001
Agence France-Presse
(Copyright 2001)

LAGOS, April 18 (AFP) - Nigeria's state-run electricity company NEPA is 
anxiously awaiting the launch of a US power project in the economic capital 
Lagos, officials said Wednesday. 
The US firm Enron was due to have begun supplying electricity to the city 
grid in December, but the project has yet to take off.
Authorities in Lagos, Nigeria's largest city, had blamed the National 
Electric Power Authority (NEPA) for the delay, saying the company was 
"frustrating" the independent power project. 
But NEPA said in a statement Wednesday: "We are very anxious to see the 
project through. No one wants to stop that kind of project. It should be 
implemented religiously. We won't compromise standards, however." 
The deal to supply electricity to the city grid was signed in December 1999 
between Lagos State, NEPA and the US power group Enron Inc. 
Under the terms of the agreement, Enron was expected to complete the first 
phase of the project by December last year. 
Enron was to supply 90 megawatts of electricity to the city in the first 
phase and increase it to 270 megawatts by August from barges floated on the 
Lagos lagoon. 
joa/gd

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



US Government Issues Warning Letter to Italy's DeLonghi S.p.A., 
NetCompliance, Inc., Reveals

04/18/2001
Business Wire
(Copyright (c) 2001, Business Wire)

WASHINGTON--(BUSINESS WIRE)--April 18, 2001--In part because a US laboratory 
employee was "almost electrocuted" during a compliance test, DeLonghi S.p.A. 
of Treviso, Italy - a European producer of electrical kitchen appliances - 
was warned in March its products would be detained by the US government from 
coming into America, according to a federal document revealed by 
NetCompliance, Inc., (www.netcompliance.com), a leading Internet provider of 
"paperless" compliance solutions, online worker training programs, safety 
equipment, and up-to-the-minute regulatory information. 
According to NetCompliance, Inc., the US government's Center for Devices and 
Radiological Health said last month one of its testers "was almost 
electrocuted" during the initial startup of compliance testing of a Delonghi 
microwave oven. The government said it was also concerned that two engineers 
from Delonghi S.p.A.'s Italy facility "failed to adequately train and 
supervise repair and final test personnel properly" at DeLonghi's New Jersey 
warehouse, which was visited by the government in February. DeLonghi America 
is located in Saddle Brook, New Jersey. The government added DeLonghi "is 
being placed on the import detention list and its products will be 
automatically detained at port of entry" until the issues were resolved.
Copies of the US government decision are available upon request from 
NetCompliance, Inc at 703/534-5022 or by email at info@netcompliance.com. 
Through its eComply(TM) technology engine, NetCompliance affords 
international companies a better, cheaper, and faster way to determine 
compliance needs, meet training requirements, obtain specialized products and 
services, and become aware of and manage regulatory-related information to 
government agencies. Begun in 1998, NetCompliance's client list has included 
such companies and organizations as: Enron, Caesar's Palace, Duke Engineering 
and Services, Boise Cascade, Weyerhaeuser, Surgical Synergies, and Nebraska 
Health Systems, among others. NetCompliance is a member of the Advisory 
Committee to the US Congressional Internet Caucus, which includes other 
stellar companies such as Microsoft, MCI, IBM, and AOL. 

www.netcompliance.com 
info@netcompliance.com


CONTACT: NetCompliance, Inc. Michael J. Volpe, 703/534-5022 
mvolpe@netcompliance.com 
02:32 EDT APRIL 18, 2001 

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


CHIEF MINISTER OF INDIA'S MAHARASHTRA WRITES TO PM ON ENRON

04/18/2001
Asia Pulse
(c) Copyright 2001 Asia Pulse PTE Ltd.

MUMBAI (WESTERN METROPOLIS), April 18 Asia Pulse - The chief minister of 
India's western state of Maharashtra, Vilasrao Deshmukh, on Tuesday sent a 
letter to the prime minister, Atal Bihari Vajpayee, in connection with the 
report of the Godbole committee that has recommended renegotiations with the 
Enron promoted Dabhol Power Company (DPC) to reduce its tariff. 
In the letter, Deshmukh has suggested setting up of a committee comprising 
representatives of the centre, Maharashtra government, State Electricity 
Board (MSEB) and National Thermal Power Corporation (NTPC) in keeping with 
the Godbole panel's submissions, to work out framework of renegotiation with 
the US energy major, official sources told PTI here.
The high power panel formed by Maharashtra government to review the 
controversial project, headed by the former federal home secretary, Madhav 
Godbole, had in its report criticised the approval granted to the Enron at 
various stages by both the state and central government. 
The report was tabled in the state legislature last week. 
(PTI)P 18-04 1715

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


India: Enron slaps two more arbitration notices

04/18/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

MUMBAI, April 17. ENRON'S Dabhol Power Company (DPC) has issued two more 
notices of arbitration to the Maharashtra Government. This is a third such 
international arbitration notice that the State Government and Maharashtra 
State Electricity Board are facing. 
While the first notice was issued for failure to honour the December 2000 and 
January 2001 bills along with interest, the two fresh notices are for 
failures to honour the Maharashtra's 'State support agreement' and the 
"Supplemental State Support Agreement."
According to Enron, the State Government has gone back on its commitment to 
provide clearances and support for "further development and completion" of 
the Dabhol project as per the State support agreement signed in June 1994. 
The third notice claims the Government has not supplied "additional support" 
needed for completion of DPC as per the supplemental State support agreement 
signed in 1996. 
"They (DPC) have claimed that we have gone back on our word when clearances 
to their second phase trial runs were denied by the Maharashtra Pollution 
Control Board hampering completion of their project," the official said. 
"The Maharashtra Government has acted in a manner inconsistent with the (two) 
agreements. The Maharashtra Government's actions have adversely and 
materially impacted DPC's ability to perform under its contractual 
agreements," Enron officials said. 
A three-person panel will now be set up to solve the dispute in the London 
Court of Arbitration. Enron has appointed Honourable Andrew John Rogers, 
former Chief Judge Commercial Division, Supreme Court of New South Wales as 
their arbitrator. 
The State Government will have to reply this notice within 30 days and 
appoint an arbitrator who cannot be an Indian national. 
The State Government officials have expressed surprise at the notice of 
arbitration for dishonouring of the December 2000 (Rs 102 crore) dues along 
with the January 2001 (Rs 111.6 crore), considering the conciliation process 
with Government of India is already in place. 
"Actually they should not be allowed to contest the Rs 102 crore December 
bill on two fora simultaneously because there is an ongoing conciliation 
process with the Centre. But they can take recourse to redressals in 
different fora," the State Government official said. 
The State Government is considering ways of clubbing the two processes 
together. "It (conciliation and arbitration for the December bill) should be 
clubbed together. Considering this may give rise to a technically queasy 
situation if the Maharashtra Government wins one case and Centre has to go 
back on another," the official said. 
The Union Government was issued the notices of conciliation and arbitration 
by DPC. The Government chose the conciliation route for which Mr Jeevan 
Reddy, Chairman of the Law Commission has been appointed conciliator. 
Meanwhile, the Maharashtra Government officials said, "The State maintains 
that the December and January bills are not payable but adjustable against 
available rebate of Rs 401 crore." 
It is not clear whether the State will have to appoint different arbitrators 
for the three notices. "All we know is that we will have to spend huge 
amounts on answering the notices and paying the arbitrators," the official 
said. 
Archana Chaudhary

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


USA: WRAPUP1-Calif. utility has huge loss, Texans strike it rich.
By Nigel Hunt

04/17/2001
Reuters English News Service
(C) Reuters Limited 2001.

LOS ANGELES, April 17 (Reuters) - It was a day of major profit and even 
bigger loss in the U.S. electricity industry. 
California's second largest utility on Tuesday followed its bigger rival in 
reporting a multi-billion dollar loss because of the state's power crisis but 
two of the Texas-based companies that sell electricity to the state announced 
sharply increased profits.
Edison International, parent of utility Southern California Edison, said it 
was taking an after-tax charge of $2.5 billion for skyrocketing power 
purchase costs that it has not been allowed to pass on to its customers. 
On Monday, PG&E Corp., parent of the state's largest utility, Pacific Gas and 
Electric, announced it was taking a massive after-tax charge of $4.1 billion 
after running up even greater costs. 
In Texas, however, sharply higher profits were reported by two Houston-based 
energy giants, Enron Corp and Dynegy Inc. Shares in another Houston-based 
giant, Reliant Energy, were meanwhile continuing to rise after reporting much 
higher than expected earnings the previous day. 
"We are envious," Edison International chief financial officer Ted Craver 
told a conference call while refusing to be drawn on whether he blamed the 
Texans for his company's financial woes. 
Prices for wholesale power in California started to skyrocket in late spring 
2000 as buoyant demand linked to a strong economy threatened to outpace 
supplies. The price hikes brought rich rewards for power generators and 
marketers but financial disaster for the state's two leading utilities. 
Pacific Gas & Electric, which has 13 million customers, filed for Chapter 11 
bankruptcy protection on April 6 while Southern California Edison has only 
survived by not paying many of its bills. 
Southern California Edison, which has around 11 million customers, announced 
on Tuesday that 17 lawsuits had been filed against the utility by small power 
producers who had not been paid for months. 
The utility said that it made its first payment to suppliers in months on 
Tuesday, paying $199 million to operators of so-called Qualifying Facilities 
to cover April deliveries although it still owes them an estimated $1.1 
billion. 
FINGERS POINTED AT TEXAS 'PIRATES' 
Edison International reported a loss of $2.55 billion in the fourth quarter, 
all but $28 million of which was related to the charge against earnings. The 
prior day PG&E Corp. had reported a loss of $4.12 billion for the quarter. 
Many fingers in California have pointed at the so-called "pirates" from Texas 
as the culprits of California's power crisis, saying that the prices they 
charge have in some cases risen tenfold in a year. 
In March, affiliates of all three Houston-based companies were included on a 
list of power providers ordered by federal regulators to pay refunds to 
California utilities for overpriced wholesale power purchases made during 
February. 
Enron, North America's largest gas and electricity marketer and trader, 
reported better-than-expected first quarter earnings of $406 million, or 47 
cents per share, up from $338 million, or 40 cents a share, a year earlier. 
The company also raised its 2001 earnings target range by 5 cents, to 
$1.75-$1.80 per share. In January, the company said it expected to earn 
$1.70-$1.75 per share. 
Wholesale natural gas and electricity supplier Dynegy said its first-quarter 
earnings rose 73 percent, driven by a strong performance from its core energy 
marketing and trading business. Recurring net income, which excludes one-time 
items, jumped to $137.5 million, or 41 cents per diluted share, from $79.4 
million, or 26 cents, in first quarter 2000. 
On Monday, Reliant reported first quarter earnings that flew past estimates. 
Adjusted earnings per share climbed to 94 cents a share or $274 million, up 
from 47 cents per share or $134 million a year earlier. Wall Street analysts' 
had been expecting earnings of about 70 cents.

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


Texas Panel Cites Lessons From Calif Power Crisis

04/17/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

HOUSTON -(Dow Jones)- Most power market participants are confident that Texas 
will avoid the disastrous mistakes seen in California as the Lone Star state 
deregulates its retail electric industry Jan. 1, but lessons can be learned 
from the west, said a panel of experts Tuesday. 
"Don't place any bets that (the market) will look like the past," Ron 
McNamara, an Enron (ENE) executive with previous experience in Australia and 
New Zealand power markets, warned attendees at a one-day conference sponsored 
by Gulf Coast Power Association.
"You don't know what commercial drivers will be in a year. Patterns will 
change," said McNamara. 
Judah Rose, senior vice president of ICF Consulting Group, said Texas' 
isolation from the rest of the U.S. transmission grid and the clear authority 
of the Texas Public Utility Commission are advantages Texas has over other 
states as it moves to introduce competition. 
The increase in generating supply in Texas, more than 14,000 new megawatts 
between 1999 and 2002, is another critical difference between Texas and 
California, Rose said. 
"The lack of new power plants is the key to California's problems," he said. 
"It will be a huge disappointment to free-market people like me if 
(deregulation) doesn't work in Texas," said Rose. 
Although Rose likes most aspects of the Texas market model, he said 
regulators and market participants must be vigilant against the imposition of 
price caps. 
A $1,000 price cap for the small amount of ancillary services to be purchased 
by the Independent System Operator in Texas was inserted by the PUC in final 
market rules last month. 
Lynn Lednicky, a senior vice president at Dynegy Marketing and Trade, a unit 
of Dynegy Inc. (DYN), warned that Texas must learn from the California 
calamity. 
Texas must work to keep the ISO out of the market as occurred in California, 
he said. "The ISO will take on a life of its own" once competition begins, he 
predicted. 
Texas must also be wary that market monitoring activity doesn't become 
"market tinkering," he added. "We must be careful of the role of unintended 
consequences." 
Wholesale and retail markets must work together, he said. Texas, although 
much less regulated by the Federal Energy Regulatory Commission than other 
regions, must remember that "state and federal jurisdictional squabbles 
matter. 
"Isolation is dangerous for Texas," said Lednicky. "We might have a tendency 
to forget that that jurisdictional squabbles can get in the way." 
Enron's McNamara also warned of a coming storm between the needs of an open 
market to send price signals and the temptation of the industry to retreat to 
the safety of rules to ensure reliability of the power supply. 
"We haven't settled that yet," he said. 
Panelists differed on the need for a spot power market in Texas to provide 
additional price information to complement the bilateral contract market. 
They also disagreed on the need for congestion management pricing within the 
Electric Reliability Council of Texas. 
The Ercot ISO has recently defined three transmission zones within Ercot, but 
Rose questioned whether there is sufficient information to determine if the 
cost of grid congestion warrants a locational marginal pricing system in 
Ercot such as the complex system used in the Pennsylvania-New Jersey-Maryland 
power pool. 

-By Eileen O'Grady, Dow Jones Newswires; 713-547-9213; 
eileen.ogrady@dowjones.com

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


Business
Enron President & CEO - Interview
Mark Haines, Jerry Klauer

04/17/2001
CNBC/Dow Jones Business Video
(c) Copyright Federal Document Clearing House. All Rights Reserved.

MARK HAINES, CNBC ANCHOR, SQUAWK BOX: Energetic earnings from Enron. The 
energy marketing and trading company reporting a 281 percent jump in revenues 
for the quarter of $50 billion. Net income increased 20 percent to $406 
million, $0.47 a share, $0.02 better than the estimates. The company also 
raising its 2001 earnings target range by $0.05 to a $1.75 to $1.80 per 
share. Enron trading low off its 52 week high of $0.91 a share. It has a year 
low of 52 and as you can see, it`s down near that low of 59. 
Is Enron en route to greater earnings? Joining us from Houston is Jeffrey 
Skilling. He`s Enron`s CEO. And in fair disclosure terms, I will say that I 
own shares of Enron and have for quite some time, more than a year. Mr. 
Skilling, so what is driving your business here? Is it primarily the energy 
shortage in the west?
JEFFREY SKILLING, PRESIDENT & CEO, ENRON: No, Mark. What`s going on just in 
general is we have a tighter electricity and natural gas market than we have 
had really in the last decade. What Enron sells is reliable delivery and 
predictable price and so the value of the product we sell is just going up 
right now. 
HAINES: What sort of threat is there, if any, in the politicization of the 
energy situation in the west? 
SKILLING: Well, I think there is a big threat. If you look at what`s going on 
in the west, in some of the proposals, the legislative proposals, and even 
some of the legislative proposals in Washington, it would be enough to make 
an economist cry. It is not a good situation. I think if people kind of keep 
calm heads and let the market forces carry the day, I think everything will 
come out fine. If we get intervention of a negative sort, it could be, it 
could prolong the problem. 
HAINES: Where does the bankruptcy of PG&E leave you? Are you a creditor 
there? 
SKILLING: We are a sizable creditor of PG&E. We have about $570 million of 
gross receivables with PG&E. We are fully reserved and have some offsets for 
that, but again, it is not good situation when the state allows a company 
with a 100 year history to go bankrupt. It is kind of surprising. 
JERRY KLAUER: Mr. Skilling this Jerry Klauer. Our firm happens to be very 
positive on the energy outlook for the next five years, if not longer, 
expecting the average price of crude to be 10 percent higher than during the 
decade of the `90s and natural gas may be 40 to 50 percent higher. Are we too 
optimistic in that outlook? 
SKILLING: Well, I think right now in crude prices, OPEC is in a race with the 
decline in the economy. The economy is pretty soft worldwide. OPEC is trying 
to ratchet back production to keep up with likely adjustments in inventory. 
So I think crude prices are likely to be pretty flat for the next couple of 
years. Natural gas, on the other hand, is likely to be very strong. We are 
clearly tight supplies in North America right now and there is no short term 
solution to that, other than price increases to ration demand. 
HAINES: One of the things you were getting into with a great deal of hoopla 
was broadband trading. I`m not using the right word, but you know what I`m 
talking about. 
SKILLING: Yep. 
HAINES: Do the recent developments in the telecom sector with the some CLECs 
in trouble with the equipment sales falling off, is that having an impact on 
a feed through to your business? 
SKILLING: Well, we focused on the long haul bandwidth market, Mark, and we`re 
trying to create a commodity market for bandwidth. We are convinced that that 
market will be established. In fact, we have had a lot of success in creating 
that market. Our entire strategy is predicated on a bandwidth glut. The 
bandwidth business today, in my opinion, looks a lot like the natural gas 
business looked in the mid 1980s, enormous oversupply, prices dropping, 
suppliers in the industry in a lot of trouble. And that is what we are seeing 
in the bandwidth market today and that is a classic case when the market can 
be helpful. Markets can help create additional cash flows for companies. They 
can make it possible for people to hedge positions, equipment positions and 
fiber positions that they have taken. So from the standpoint of our business, 
the outlook for the marketplace actually pretty good right now. 
KLAUER: Mr. Skilling, Jerry Klauer again. Does the hedging effect that you 
put on actually impact your earnings? Your revenues are up 281 percent and 
your net income was up 20 percent, a great number. But, you know, there 
should have been more leverage unless you had hedged a lot or some of your 
newer businesses were lower margin. Could you comment on that? 
SKILLING: Well, again, we are not a producer of natural gas. We produce some 
electricity, but we basically are an intermediary. We are buying and selling 
natural gas and power all across the world. And we make a margin on the 
difference between what we purchase for and what we sell for. So we are 
really not influenced by the commodity cycle. We have virtually no exposure 
to commodity prices. What we are driven by, our earnings are driven by volume 
increases and we have had, as you can tell from our numbers this quarter, 
really strong, strong volume increases all across the world. 
HAINES: All right, got to leave it there. Mr. Skilling, thank you very much 
for your time. Appreciate it. 
SKILLING: Thanks, Mark. 
HAINES: Jeffrey Skilling is CEO of Enron. 

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







Dynegy passes Street target
Marketing and trade power Q1 results





By Lisa Sanders, CBS.MarketWatch.com 
Last Update: 5:37 PM ET Apr 17, 2001



HOUSTON (CBS.MW) - Dynegy reported a 73 percent increase in first-quarter 
profit Tuesday as revenue almost tripled, the result of a booming marketing 
and trading business.
Shares of Dynegy (DYN: news, msgs, alerts) added $2.80 to close at $55.95.
Those who deal in natural gas were expected to get a boost in the first 
quarter, and Dynegy, based in Houston, realized expectations when it posted 
income of $137.5 million, or 41 cents a share, which compares to $79.4 
million, or 26 cents a share, during the year ago period. Sixteen analysts 
polled by First Call/Thomson Financial expected Dynegy to earn 40 cents, on 
average, in the first quarter.
"Dynegy is still showing a lot of growth, and they exceeded even their 
revised expectations," said Mark Easterbrook, an energy analyst with Dain 
Rauscher Wessels. "I think the stock will do well."
Also in the first quarter, revenue jumped to $14.2 billion from $5.3 billion 
a year ago as operating margins improved to $477 million from $382.8 million 
during the first quarter of 2000.
"We created significant value during a period of strong industry fundamentals 
in both natural gas and power," said Chairman and CEO Chuck Watson in a 
statement. "Furthermore, we captured opportunities generated by a return to 
seasonal winter weather and the supply and demand imbalances that are 
impacting multiple energy commodities."
Dynegy reported a 99 percent jump in profit from the marketing and trade 
division to $100.3 million from $50.3 million a year ago. The first quarter 
results from the segment account for 73 percent of Dynegy's net income.
Dynegy, which, like Reliant Energy (REI: news, msgs, alerts) , Mirant (MIR: 
news, msgs, alerts) , and Duke Energy (DUK: news, msgs, alerts) , is owed 
money for power sales to the California energy market, said that its West 
Coast Power joint venture has mitigated its future credit exposure in the 
state through its agreement with the Department of Water Resources to provide 
2,300 megawatts of energy through 2004.
In the conference call, Watson characterized California's energy crisis as a 
failure to deregulate. He said he believed that a solution to the problem 
would be reached given some of the recent progress in the matter. Most see 
the recent decision by Southern California Edison, a division of Edison 
International (EIX: news, msgs, alerts) , to sell its transmission lines to 
the state for $2.76 billion and use the proceeds to repay its creditors as a 
positive development. SoCalEd is severely in debt because of the problems 
with deregulation in California.
As Enron did earlier Tuesday, Dynegy CFO Robert Doty declined to disclose the 
level of reserves the company has taken to account for past power purchases 
into California. Doty said revealing the reserve amount would put the company 
at a competitive disadvantage. According to the company's most recent 10-K 
filing with the Securities and Exchange Commission, Dynegy receivables 
related to California stood at about $265 million.
In other areas, midstream operations showed a decline in its profit to $22.9 
million from $24.2 million a year ago. During the first quarter of 2000, 
results were impacted by the sale of assets. Excluding the sale, first 
quarter 2001 earnings exceeded that of the year ago period by $4 million.
Meanwhile, income from Illinois Power, the company's transmission and 
distribution unit, benefited from cost reductions and market demand. Profit 
rose to $25.9 million from $4.9 million a year ago.
Also, Dynegy's start-up communications business - Dynegy Global 
Communications - posted a loss of $11.6 million, or 3 cents a share, due to 
expenses associated with establishing the unit that provides wholesale 
bandwidth.
"This will help us to achieve our goal of providing bandwidth on demand 
around the world," Watson said in the conference call.
Watson closed by saying he was very bullish on the company's outlook for 
2001. 
Lisa Sanders is a Dallas-based reporter for CBS.MarketWatch.com. 



Enron, Duke, Dynegy 1st-Qtr Profits Rise as Energy Sales Surge
2001-04-17 18:37 (New York)

Enron, Duke, Dynegy 1st-Qtr Profits Rise as Energy Sales Surge

     Houston, April 17 (Bloomberg) -- Enron Corp., the largest
energy trader, and rivals Duke Energy Corp. and Dynegy Inc. said
first-quarter profit rose, driven by soaring sales of electricity
and natural gas.
     Enron's profit from operations rose 20 percent to $406
million as sales almost quadrupled to $50.1 billion. Duke's profit
from operations rose 54 percent to $554 million, and sales more
than doubled to $16.5 billion. Dynegy's profit from operations
rose 73 percent to $137.5 million, while sales more than doubled
to $14.2 billion.
     Enron sold 90 percent more power and 32 percent more gas in
North America than in the year earlier as prices surged.
Dynegy's electricity sales and production rose 19 percent to 26.1
million megawatt-hours. Duke's trading and generation profit
before interest and taxes more than quadrupled to $348 million.
     ``The market is perfect for a trader and marketer,''
Commerzbank Capital Markets Co. analyst Andre Meade said. ``Volume
is growing, prices are high and prices are volatile.''
     The average price of gas last quarter more than doubled from
a year ago, and electricity prices in the west, which accounted
for about one-fifth of Enron's power-sales increase, rose
ninefold.
     Enron raised its 2001 profit forecast to $1.75 to $1.80 a
share from its January projection of $1.70 to $1.75. Dynegy's
profit probably will get a boost later this year from power sales
in New York state, where it bought plants that can produce 1,700
megawatts, or enough to light 1.7 million U.S. homes, analysts
said.

                            California

     Reliant Energy Inc., the owner of Houston's utility and a
power supplier in California and other states, said yesterday
first-quarter earnings more than doubled on higher profit from
energy-trading and gas businesses. Its trading unit had a
operating profit of $216 million compared with a $22 million loss
a year earlier.
     Soaring power prices pushed California's largest utility into
bankruptcy court and may cost the state as much as $70 billion in
electricity-buying costs this year, lawmakers have said. Most of
that money goes to ``out-of-state generators'' accused of ``price
gouging'' by Governor Gray Davis. The generators repeatedly have
denied they've manipulated California's market.
     Other companies with large trading groups have said they made
more money last quarter than expected. They include Williams Cos.,
a gas pipeline company that's become one of the largest U.S.
energy traders; Calpine Corp., an electricity generator and power-
plant developer; Avista Corp., owner of utilities in the U.S.
Northwest; and Mirant Corp, formerly called Southern Energy Inc.
     Reliant, Dynegy and Enron are based in Houston. Mirant is
based in Atlanta. Williams is based in Tulsa, Oklahoma.
     Shares of Enron rose 56 cents to $60. Dynegy rose $2.80 to
$55.95. Duke, based in Charlotte, rose $2.09 to $44.60. Calpine,
based in San Jose, California, rose $1.30 to $54.56. Williams rose
1 cent to $43.35. Mirant rose 55 cents to $34.50. Avista, based in
Spokane, Washington, rose 36 cents to $18.53.

                               Enron

     Once just a natural-gas pipeline company, Enron has spent
more than a decade creating a trading operation that buys power,
gas and other commodities and resells them to utilities and other
large consumers, a business made possible by deregulation of U.S.
energy markets in the 1980s and 1990s.
     As a result, the company's sales have risen an average of 66
percent annually for the past five years. Enron had 2000 revenue
of $101 billion, making it the second-largest U.S. energy company
behind Exxon Mobil Corp. Revenue will be as much as $170 billion
this year, Chief Executive Officer Jeff Skilling estimated in
March.
     Enron's business in energy-services contracts has escalated
as a result of California's power crisis. Skilling has said demand
is increasing as companies look to cut energy costs and protect
themselves from the risks of energy-price movements.
     Contracts increased nearly 60 percent to $5.9 billion in the
quarter. Enron, which recently signed contracts with Owens-
Illinois Inc., Quaker Oats Co. and Eli Lilly & Co., manages energy
buying and consumption at more than 31,000 sites. It is the
largest manager of customer energy assets, Skilling said.

                             Broadband

     Enron's broadband unit, set up to build a U.S. fiber-optic
network and help trade space on such networks, had a quarterly
loss of $35 million on revenue of $83 million. It broke even a
year earlier. Enron added 70 broadband customers in the latest
quarter, for a total of 120.
     Shares of Enron fell 11 percent on March 12 after the
collapse of an agreement for Blockbuster Inc., the world's largest
video-store chain, to deliver movies on demand over Enron's fiber-
optic system. The shares continued to fall on speculation Enron
would exit the broadband business, analysts said. Enron denied the
speculation.
     Dynegy's new Global Communications division, which markets
and trades broadband, had a $11.6 million loss from start-up and
expansion costs.
     Profit from processing and marketing natural-gas liquids fell
5.4 percent to $22.9 million. Last year's profit included about $4
million from assets that have been sold.
     Profit at Dynegy's Illinois Power utility, with 650,000 gas
and power customers in southern Illinois, more than quintupled to
$25.9 million on cost reductions and higher winter demand.






Enron earnings jump by 20%
Financial Times.com, April 17, 2001
By Julie Earle and Jenny Wiggins in New York
Published: April 17 2001 13:02GMT | Last Updated: April 17 2001 22:18GMT





Enron, the power company, unveiled a 20 per cent increase in first-quarter 
earnings, fuelled by strong demand in its wholesale gas and power business, 
particularly in North America and Europe. 
The Houston-based company, which markets and trades natural gas and power, 
also said it would be interested in selling its majority stake in the $3bn 
Dabhol power project in India. 
Earnings were $406m, or 47 cents a share, in the first quarter, against 
$338m, or 40 cents, a year earlier, beating expectations of 45 cents. Enron 
said it would raise its 2001 earnings target by 5 cents to $1.80 a share, 
based on a positive outlook for the rest of the year. 
"It is a sellers' market," said Jeff Skilling, chief executive. "We are 
continuing to see strong growth in all markets - in North America, in Europe, 
in Australia, across the board." Revenues jumped from $13.1bn to $50.1bn, a 
rise of 281 per cent. In the quarter, Enron increased energy volumes by 65 
per cent to 69,000bn British thermal unit equivalents per day, and reported a 
60 per cent increase in new retail energy contracts to $5.9bn. Income from 
the wholesale energy business, which includes buying and selling commodities, 
jumped 76 per cent to $755m. 
Enron Online, the electronic trading platform, was also a strong contributor, 
but the internet business reported a loss of $35m for the quarter. In an 
interview, Mr Skilling said Enron would be interested in talking to potential 
buyers for its $900m interest in the Dabhol project. Enron has been locked in 
an ongoing payments dispute with the Bombay facility and has warned it could 
withdraw from the project. 
"India is identical to the California situation except that we have a 
government guarantee for payment," he said. On California, Mr Skilling said 
Enron was owed $580m by Pacific Gas & Electric, which declared bankruptcy 
this month. 
But Standard & Poor's on Tuesday affirmed its BBB+ senior credit rating on 
Enron, and said the rating was not affected by reports of its exposure to 
PG&E. 
Enron's shares closed 56 cents, or 9 per cent up, at $60.00 on Tuesday after 
climbing as high as $61.37.
Meanwhile, Dynergy, a gas and electricity supplier, said its first-quarter 
earnings rose 73 per cent, driven by a strong performance from its core 
energy marketing and trading business.