AES Expresses Interest in Enron's India Project
The Wall Street Journal, 06/28/01

California Energy Firm Subsidiary Puts Rockville, Md., Headquarters on Hold
KRTBN Knight-Ridder Tribune Business News: The Washington Times - Washington, 
D.C., 06/28/01

World-Wide
The Wall Street Journal, 06/28/01

INDIA: AES interested in Enron's Indian power plant.
Reuters English News Service, 06/28/01

Bush kicks off summer of fund raising with $20 million dinner
Associated Press Newswires, 06/28/01

INDIA: Japan bank may invoke Enron loan guarantee-paper.
Reuters English News Service, 06/28/01

India: Reinsurance rates rise 20 pc
Business Line (The Hindu), 06/28/01

U.S. firm enters local energy market
Lethbridge Herald, 06/28/01

Investigators may seek contempt sanctions against power generators
Associated Press Newswires, 06/27/01

State energy crisis may imperil future of deregulation, consumer choice
Associated Press Newswires, 06/27/01

Impact: Why Won't Vice President Cheney Say Who He Got Advice From on the 
Energy Crisis?
Fox News: The O'Reilly Factor, 06/27/01

Senators Ask Army Chief to Step Away From Energy Issue
Dow Jones Business News, 06/27/01

UK: Companies prepare European gas trading contract.
Reuters English News Service, 06/27/01



International
AES Expresses Interest in Enron's India Project
By Daniel Pearl
Staff Reporter of The Wall Street Journal

06/28/2001
The Wall Street Journal
A13
(Copyright (c) 2001, Dow Jones & Company, Inc.)

BOMBAY, India -- Power giant AES Corp. said it "would consider getting 
involved" with rival Enron Corp.'s $3 billion Dabhol Power Co. project in 
India, but Dabhol's backers so far don't see AES as a serious contender to 
buy out the troubled electricity venture. 
The 740-megawatt Dabhol project hasn't produced power for more than a month, 
because of a payment and tariff dispute between the company and its sole 
customer, the western industrial state of Maharashtra. Enron officials have 
said it's unlikely any buyer would step in now, with Maharashtra insisting on 
renegotiation of the project's 1,444-megawatt second phase and contractors 
delaying its completion because of unpaid bills.
"We don't see that opportunity now," agreed Surender Singh, AES's executive 
director in India. "They have to get [the dispute] resolved first." But he 
added, "We are not denying we have an interest." 
In a statement issued in India yesterday, AES said it has made "no formal 
proposal to any stakeholders at this stage," but Mr. Singh wouldn't comment 
on reports that the company had talked with one of Dabhol's lenders. He also 
said AES wouldn't consider buying into the project unless it gained 
management control. 
Houston-based Enron has been trying without luck to sell a 15% stake in 
Dabhol. Enron holds 65%, and the rest is split among General Electric Co., 
Bechtel Corp. and the cash-strapped government of Maharashtra. Enron is 
believed to be looking for a way to leave the Dabhol project entirely. 
The politically charged rate dispute appears increasingly to be heading for a 
lengthy legal mediation, since Maharashtra is asking for much steeper tariff 
reductions than Enron is willing to give. Also, Enron may wish to avoid 
negotiating a new power-purchase agreement, which would allow a recently 
formed state regulatory commission to claim jurisdiction over the project's 
rates. The commission has already won the first round of a court battle 
trying to assert its authority, though Dabhol is expected to appeal. 
AES, Arlington, Va., is known for its willingness to take on political risks. 
Still, some Dabhol officials worry that AES's vague expression of interest 
will further muddy Enron's situation in India. The first of several local 
newspaper articles quoting AES officials as wanting to take over Dabhol 
appeared on June 16, just as Dabhol and its lenders were winding up a crucial 
bargaining session with Maharashtra.

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



California Energy Firm Subsidiary Puts Rockville, Md., Headquarters on Hold
Chris Baker

06/28/2001
KRTBN Knight-Ridder Tribune Business News: The Washington Times - Washington, 
D.C.
Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World 
Reporter (TM)

The California energy crunch has forced a PG&E Corp. subsidiary to delay its 
plan for a new $100 million headquarters in Rockville. 
PG&E National Energy Group was expected to start construction this summer on 
the 450,000-square-foot complex in Tower Oaks, a business campus off 
Interstate 270.
The plans are now on hold because of financial problems within the parent 
company that are rooted in the California power crunch, a spokesman said. 
Another PG&E unit, Pacific Gas and Electric Co., filed for protection from 
its creditors under Chapter 11 of the federal bankruptcy code in April. It 
listed an $8.9 billion deficit. 
That unit, which has 13 million customers in California, suffered when the 
state changed its electricity regulations and the company was forced to buy 
increasingly expensive wholesale power without the ability to pass the rising 
costs to its customers. 
"Even though our companies are completely separate, we believe it is prudent 
to put the project on hold and focus on other parts of the business," said 
David Mould, spokesman for National Energy Group. 
The company develops and operates electric and gas power plants, and operates 
one of the nation's largest energy-trading businesses. 
It announced a new $550 million line of credit from several investment banks 
last week and said in a statement it would use the money for working capital 
and to "establish a credit identity that is independent of PG&E Corp." 
National Energy Group currently occupies 320,000 square feet in Bethesda. It 
has about 650 employees. 
This summer, the company expected to begin construction in Tower Oaks on a 
10-story office building with roughly 280,000 square feet and an adjacent 
building with about 140,000 square feet. 
Mr. Mould said he did not know when construction might begin, but that the 
company is "still committed" to the project. 
A spokesman for the Tower Cos., the north Bethesda group that is developing 
Tower Oaks, declined to comment yesterday. 
National Energy Group's decision to delay the project is "disappointing," 
said Stephen Christian, business development specialist for the Montgomery 
County Department of Economic Development. 
But the department, which helped National Energy Group plan the new 
headquarters, believes the company will eventually get the project "back on 
track," Mr. Christian said. 
A spokesman for the Electric Power Supply Association said power companies 
across the country are proceeding with expansion plans, even though some 
government officials and industry leaders believe the problems in California 
could signal a national energy shortage. 
"The situation with PG&E is unique because of the situation in California," 
said Mark Stultz, vice president of public affairs and marketing for the 
trade group, which represents power marketers and generators. 
Energy giant Enron Corp. said yesterday it is nearing completion on a 1.2 
million-square-foot addition to its headquarters in a Houston office tower. 
Meanwhile, Orion Power Holdings Inc., a Baltimore company, said it still 
plans to build new electric plants in Southern Maryland and Kentucky. 
Other companies are planning plants in Fauquier and Loudoun counties in 
Northern Virginia, although elected officials in those counties say they are 
not needed.

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


What's News
World-Wide

06/28/2001
The Wall Street Journal
A1
(Copyright (c) 2001, Dow Jones & Company, Inc.)

The Army secretary was advised by Senate Armed Services panel members McCain 
and Carnahan to recuse himself in decisions on utility contracts for bases. 
Thomas White until this year was Enron's vice chairman. 

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




INDIA: AES interested in Enron's Indian power plant.

06/28/2001
Reuters English News Service
(C) Reuters Limited 2001.

BOMBAY, June 28 (Reuters) - The Indian subsidiary of U.S. electricity firm 
AES Corp on Thursday said it "would consider getting involved" in the 
controversy-ridden Dabhol power project if an opportunity arose, but said it 
had made no formal proposal so far. 
U.S. energy giant Enron Corp could pull out of the $2.9 billion project as a 
result of a bitter dispute with the Indian state utility that has contracted 
to buy the power.
The wrangle had given rise to speculation that AES India could take over the 
project from Enron's Indian subsidiary, Dabhol Power Corporation. 
In a press statement, AES said it had neither made any formal proposal to 
stakeholders nor received any. 
AES was among the first global firms to enter India when its government 
liberalised the power sector in 1992, and has so far invested a total $155 
million in two separate projects. 
In 1998, it purchased 49 percent of Orissa Power Generation Corporation, when 
the eastern Indian state of Orissa's power assets were privatised. 
In September 1999 it also acquired the Central Electricity Supply Company of 
Orissa. 
AES initially came into India intending to develop and operate a coal-fired 
power plant in Orissa. But the project was delayed and is still under 
development. 
Enron's investment in the power plant, on the western coast of India, is the 
country's single largest direct foreign investment. 
But Dabhol Power Corporation and the Maharashtra State Electricity Board are 
now in the midst of an acrimonious row that threatens to scupper the 
high-profile project. 
The power firm claims the state utility has reneged on its contractual 
obligations by defaulting on payments, while the utility claims Dabhol has 
also violated several clauses in the contract. 
The dispute has brought bad publicity to Enron and hurt India's image among 
foreign investors, including other global power firms which had eagerly 
entered the potentially huge Indian power sector. 
"The commitment and willingness of parties to a contract...is an important 
consideration for our investment decision in any project," said AES's press 
release. 
"This is the basis for both our current investment and for any future 
investment we may make in India or any other country."

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


Bush kicks off summer of fund raising with $20 million dinner
By SHARON THEIMER
Associated Press Writer

06/28/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

WASHINGTON (AP) - Republican lawmakers and donors partied around a giant "W" 
at a presidential dinner that raised more than $20 million for GOP 
congressional candidates. 
The Wednesday night dinner opened what party officials say will be a summer 
of fund raising by President Bush, first lady Laura Bush and Vice President 
Dick Cheney for Republican House and Senate candidates.
The invitation offered those contributing $25,000 and up "the option to 
request a member of Congress and their guest to complete your table of 10." 
The biggest donors got a chance to mingle with President Bush and Cheney at a 
predinner reception. 
Bush thanked contributors profusely in an 18-minute speech that touched on 
his policies on tax cuts, education and defense. 
"Make no mistake about it: This dinner has one goal in mind, to make sure 
Denny Hastert remains the speaker of the House and to make sure Trent Lott is 
the majority leader of the United States Senate," he said. 
More than 4,000 tickets were sold for the $2,500-per-plate event, topping the 
record $11.7 million the GOP's House-Senate dinner took in last year, when 
former President George H.W. Bush was the main speaker. 
Donors in tuxedos and gowns dined and drank around a giant gold "W" that 
reached to the rafters at the Washington Convention Center ballroom in honor 
of President Bush. Grilled tenderloin, sweet potato and corn souffle and 
assorted desserts were on the menu. 
Those hoping for quality time with the president may have been disappointed. 
He and Cheney left before the salad plates were cleared. 
Hastert of Illinois, Lott of Mississippi and former House Speaker Newt 
Gingrich of Georgia were among politicians mixing with contributors. 
The dinner program listed dozens of corporate sponsors representing a wide 
range of industries, including Microsoft, American Airlines, Philip Morris, 
Enron, AT&T, Dow Chemical, Walt Disney and eBay, to name a few. 
Bruce Gates, a lobbyist for the Health Benefits Coalition, was one of the 
event's co-chairmen. The group of insurers and business associations is 
fighting pending Senate legislation that would give patients broad rights to 
sue their managed-care plans. 
Co-chairman Jim Anderson of the National Association of Wholesaler 
Distributors, which is also a Health Benefits Coalition member, dined at one 
of the head tables with Cheney. Anderson said he has taken part in several 
House-Senate dinners. 
"We do it because we support the policies of this administration. We support 
the policies of the Republicans in the House and Senate with respect to the 
issues our members care about," Anderson said, citing taxes, labor-management 
relations and health care. 
The Republican and Democratic parties are both raising money at a record clip 
for next year's battle over House and Senate control. 
And both are rolling out star power - political and otherwise - to do it. 
Wynonna Judd entertained donors at Wednesday's GOP fund-raiser. Roberta Flack 
is performing at a $1 million Democratic National Committee event Thursday 
night. 
Former vice presidential candidate Joseph Lieberman is the featured guest at 
the DNC fund-raiser. The Connecticut senator, Senate Majority Leader Tom 
Daschle of South Dakota and former President Clinton have all headlined 
Democratic fund-raisers in recent weeks and are expected to do more this 
summer. 
The Democratic Senatorial Campaign Committee is inviting big donors to spend 
July 6-8 on the Massachusetts island of Nantucket dining and sailing with 
Daschle and more than a dozen other senators. Those giving $20,000 in 
federally regulated donations or $50,000 in unregulated "soft money" are 
invited. 
The McCain-Feingold campaign finance bill pending in Congress would ban the 
large soft-money contributions the parties commonly take in at big 
fund-raisers. 
--- 
On the Net: 
GOP congressional committees: http://www.nrsc.org; http://www.nrcc.org 
Democratic committees: http://www.dccc.org; http://www.dscc.org

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


INDIA: Japan bank may invoke Enron loan guarantee-paper.

06/28/2001
Reuters English News Service
(C) Reuters Limited 2001.

BOMBAY, June 28 (Reuters) - The Japanese Bank for International Cooperation 
(JBIC) has warned it may invoke the guarantee provided by Indian banks for 
the foreign loan used to help build a $2.9 billion power plant which has quit 
operating, an Indian financial daily reported on Thursday. 
The Economic Times, citing unnamed sources, said the Japanese government-run 
bank had "sounded a grim warning" during a meeting last week in Bombay with 
officials of the Industrial Development Bank of India (IDBI), which often 
serves as a representative of all Indian banks in this matter.
No IDBI official could be contacted to comment on the report. 
The Economic Times said JBIC had a direct fund exposure of $258.21 million to 
Dahbol Power Company (DPC), set up by Houston-based energy giant Enron Corp 
to build a 2,184 MW power plant south of Bombay. 
The newspaper said Indian institutions - IDBI, ICICI , State Bank of India 
and IFCI - had guaranteed $524.24 million in foreign loans to the project, 
work on which was halted earlier this month. 
Generating capacity of 740 MW was completed in 1998, while a second phase 
adding another 1,444 MW was almost complete when Bechtel and other 
contractors ceased work on June 16. 
DPC has been embroiled in a dispute with the cash-strapped state utility, the 
Maharashtra State Electricity Board, which is the sole buyer of its power and 
has defaulted on payments of $48 million to DPC. 
The state utility stopped buying power from DPC in May.

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


India: Reinsurance rates rise 20 pc

06/28/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

BANGALORE, June 27. REINSURANCE rates for India have escalated by 20 per cent 
during the last three months. This escalation comes after the premiums went 
up by 50 per cent in March this year. 
Industry sources attributed this to the rising claims from the power sector 
and the increase in the potential for claims by the sector.
Such potential is estimated by the industry using a methodology called the 
"Probable Maximum Claim" ratios. 
After this increase, reinsurance premiums are currently in the range of about 
0.58 per cent of the sum assured. Till March this year, the premiums were in 
the region of 0.47 per cent and in January it was about 0.25 per cent. 
The claims from the energy sector have been on account of natural disasters 
as well as accidents. Most of the claims are currently from the private 
sector, specially in the generation segment. This is because very few of the 
transmission / distribution companies' assets have been insured. Wherever 
insurance cover has been taken, it has been mostly in externally- funded 
projects. 
Current estimates of reinsured assets in the country are in the region of 
about Rs 2,500 crore. This approximately translates into a premium outflow of 
about Rs 900 crore. This volume by international standards is treated as low. 
In March when the premiums escalated, this was one of the reasons cited. 
Moreover,, the sources said, during the last few months there had been a 
weakening of the sentiment for India. Hence, the hardening of reinsurance 
premiums. Among the reasons cited for the weakening were fears within the 
reinsurance community that some of the force majeure clauses covering the 
Dabhol Power Company (DPC) might be invoked. 
DPC is insured for both political as well as non-political risks. 
The fear is that the political risk component could be invoked by the project 
promoters, Enron International, leading to high claims from the insurance 
companies, which in turn was likely to devolve on to the reinsurers. Among 
the reinsurers involved in providing cover to Enron international are 
engineering insurance companies such as Munich Re. 
The increase in premiums could also be on account of the low capital adequacy 
levels of some of the new insurance entrants in the Indian market. For these 
new companies, the retention levels, the ability to absorb claims into their 
own balance sheet is low. Consequently, the premiums also tend to be on the 
high side. On the other hand, the public sector companies have a capital 
adequacy of a minimum of about Rs 2,000 crore and have high retention 
abilities. 
As a result, the companies that have been most affected by the premium 
escalation have been the new companies, despite their partners being renowned 
foreign companies. 
- C. Shivkumar

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


Business Local
U.S. firm enters local energy market
Dave Mabell

06/28/2001
Lethbridge Herald
Metro
All material Copyright (c) Bell Globemedia Publishing Inc. and its licensors. 
All rights reserved.

Another American company plans to sell electric power to Lethbridge 
businesses. But Enron Direct has no plans to open an office here, officials 
say. 
And it's not taking on entrenched Epcor and Enmax in the residential market 
in the foreseeable future.
"We want to sign up business and light industrial customers across Alberta," 
says Darren Cross, chief operating officer for Alberta. "Our plan is to use 
direct mail and telemarketing." 
In view of the non-competitive market that's remained despite the province's 
attempts at power deregulation, he says even that approach should stimulate a 
little competition. 
"Competition hasn't happened," Cross says. "We plan to have people out 
calling on business people right across Alberta." 
Enron Direct will offer "competitive prices" for natural gas as well as 
electricity, he says. But the company won't comment on the possibility it 
might buy the gas distribution business recently put up for sale by the Atco 
Group, one of a handful of gas and electricity producers that controls the 
Alberta market. 
As a subsidiary of North America's biggest gas and power wholesaler, Cross 
says Enron can promise customers predictable term pricing and an assured 
supply. 
Enrom Canada already claims to be the largest wholesale buyer and seller of 
both products in Canada. 
"We're not going to have the lowest price in the market," Cross adds. "But 
we'll always be competitive." 
In Lethbridge, prospective customers in the Industrial Association of 
Southern Alberta say they've heard it all before. 
"We view this announcement with a degree of skepticism," says Chris Spearman, 
the business group's chairman. 
"A similar announcement regarding more competitive offers was made three 
weeks ago by Enmax," he points out. "Our members have yet to see competitive 
bids." 
In today's market, Spearman says, high-use power consumers should be offered 
prices in the range of four to five cents per kilowatt hour -- as they are in 
neighbouring provinces. 
"We are not receiving competitive bids in that range and believe the 
deregulated market structure is a failure -- and is subject to price 
manipulation," he says. "Real competition does not exist." 
In the U.S., legislators are investigating charges that power prices were 
manipulated in California and other western states, where deregulation was 
also accompanied by promises of lower prices. 
Spearman says Alberta industries' demand on the power system has fallen, in 
response to record-high prices. 
At the same time, some new power generation has come on stream -- and that 
should have brought prices lower. 
"But we continue to see a reluctance (by the power companies) to provide 
competitive long-term pricing," he says. "Our members are paying rates that 
are double the rates they paid in last year's regulated environment." 
With Enmax as the city's "default" power supplier, its rival Epcor has 
apparently been the only company in a position to offer Lethbridge businesses 
an alternative price structure. But the Edmonton-company has no sales office 
in Lethbridge. 
Epcor also failed to replace a sales agent who left after been named the 
company's sole representative in the Lethbridge area, as Epcor was announcing 
its partnership in the seasonal Taylor Chute small-hydro project near 
Magrath. 
"Grand announcements are great for public image," says Spearman. "Now we 
would like to see some substance to support them in the form of competitive 
retail offers." 
Any comments or questions? Contact the writer at 
dave.mabell@lethbridgeherald.com

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


Investigators may seek contempt sanctions against power generators
By DON THOMPSON
Associated Press Writer

06/27/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

SACRAMENTO (AP) - A Senate investigatory committee may seek contempt 
sanctions Thursday against power generators that have not turned over 
subpoenaed documents. 
If the Senate agrees, it would be the first such move since 1929.
"These are the same documents we requested April 5, and to date the summary 
is: three months, zero documents," said Laurence Drivon, special counsel to 
the Senate Committee to Investigate Price Manipulation. 
The Senate Rules Committee subpoenaed the documents - which include details 
on bidding, pricing and other aspects of power sales - earlier this month. 
Generators said they haven't complied because they have not been able to 
negotiate an acceptable confidentiality agreement. 
Representatives of Reliant Energy, Dynegy Energy Services Inc., Williams 
Energy, Enron Corp., Duke Energy and Mirant Inc. will each be given an 
opportunity at a hearing Thursday to argue why they should not be held in 
contempt, Drivon said. 
If the committee subsequently votes to hold any company in contempt, it would 
ask the Senate to impose sanctions. There are no set penalties, Drivon said - 
by law, "the Senate can take such action as it deems necessary and 
appropriate," he said. 
Duke spokesman Tom Williams said his company has turned over more than 200 
boxes of material to the California Public Utilities Commission, and has 
complied with document requests by the state attorney general and Federal 
Energy Regulatory Commission. 
"We're been working with this (Senate) committee for weeks now, for over a 
month, without reaching agreement" on a confidentiality guarantee, Williams 
said. "There's proprietary information there, highly competitive information 
that no company could be expected to release without this sort of agreement." 
Telephone calls seeking comment from the other five companies were not 
immediately returned. 
The committee's chairman, Sen. Joe Dunn, D-Santa Ana, said the companies may 
go to court to resist the subpoenas. 
The last time the Senate imposed contempt sanctions was 72 years ago, when it 
briefly jailed a balky witness during a committee's investigation of price 
fixing and price gouging allegations involving the sale of cement to the 
state, Drivon said. 
The state Supreme Court eventually upheld the Senate's right to jail those 
who fail to comply with its subpoenas, Drivon said, but ordered that 
particular witness freed after determining senators hadn't followed all the 
proper procedures.

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


State energy crisis may imperil future of deregulation, consumer choice
By DON THOMPSON
Associated Press Writer

06/27/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

SACRAMENTO (AP) - California's energy crisis may claim a substantial victim: 
deregulation itself. 
"Never again will we embrace a free market - it's too expensive," Gov. Gray 
Davis' chief energy adviser, S. David Freeman, predicted Wednesday.
"The marketplace is blind to the need for cleaner air, it is blind to the 
needs of consumers in a shortage, and it produces a shortage with its 
volatility," the former head of the Los Angeles and Sacramento municipal 
power agencies told a Senate committee plotting California's energy future. 
The state's flawed 1996 law freed wholesale electricity rates while capping 
retail power prices, leaving the state's three investor-owned utilities 
trapped in between. 
Now the state has signed $43 billion worth of long-term energy contracts, and 
created a power authority that could build its own power plants. 
Its Public Utilities Commission stands ready to bar businesses from freely 
swapping power providers - the incentive that prompted deregulation in the 
first place. 
Davis wants lawmakers to approve buying the electricity transmission lines 
from two of the three cash-strapped utilities, and wants to buy the lines of 
the state's largest utility, Pacific Gas and Electric, out of bankruptcy 
court. 
Consumer groups say the state should buy the utilities' hydroelectric 
generation and other assets as well, as part of a return to regulation and a 
shift to publicly owned power supplies. 
"Look what deregulation and handing our electricity supply over to a bunch of 
private companies has done for us - 50 percent (rate) increases and $20 
billion in surcharges. Thank you very much, but no thank you," Harvey 
Rosenfield of the Foundation for Taxpayer and Consumer Rights said last week. 
He argued the state should buy all three utilities at their current 
"fire-sale prices" - "We're talking about picking them up for a 
dime-for-a-dollar when they're totally out of cash." 
Enron Corp. President and CEO Jeffrey Skilling is among those urging the 
state to do the opposite and create a truly open market. Public power only 
drives up costs and lowers accountability, he said. 
"If you had an open competitive marketplace and not put restrictions on that 
marketplace, I guarantee you the price of power in California will be 
significantly lower," he said in a San Francisco speech last week entitled, 
"The arrogance of regulation." 
"California needs to get deregulation right and the rest of the country needs 
to get deregulation right," Skilling said, shortly after he was hit by a pie 
thrown by an irate electricity consumer. 
That means giving consumers more immediate price incentives, other free 
marketers told the Senate Energy Committee Wednesday. 
Tiered electricity rates would reward consumers who confine their electricity 
use to lower, cheaper "tiers" of energy consumption. 
Real-time electricity meters would let consumers see the price they are 
paying at any given time of day or night, encouraging them to, say, run their 
clothes dryer at 3 a.m. when power would be cheaper. 
Business' demand for choice drove the deregulation movement, when industries 
sought the ability to choose among energy wholesalers or generators rather 
than being locked into buying their money through a local utility. 
But PUC President Loretta Lynch predicted the commission will block that 
choice Tuesday, for fear departing customers will leave residential and other 
small consumers to pay a larger share of the $8.2 billion the state has 
authorized for power buys. 
The move was panned by generators and business groups as a step backward. 
Southern California Edison Vice President Bob Foster predicted the state will 
end up regulating all three legs of its power grid: generation, transmission 
and distribution. Regulation is needed to smooth out the boom-and-bust 
business cycle that California has seen so graphically in the last year, he 
said. 
Freeman predicted the state will likely wind up with some sort of "hybrid" of 
government regulation that will rein in the excesses of a free market. 
"It's impossible to say at the moment whether the (investor-owned) utilities 
will revive," he warned. If they do, he said their corporate boards may opt 
to chase the higher profits of the open market while shedding their 
transmission and distribution systems to state control. 
Yet Freeman and California Energy Commission Chairman Bill Keese predicted 
residential and business consumers may soon see the sort of freedom of choice 
they now could only dream about, once fuel cells, photovoltaic generation and 
micro-turbines become commonplace. 
"The future perhaps belongs to a whole new set of competitors," Freeman said. 
"These central station power generators are not going to have it all to 
themselves."

AP Photos SC108-109. 

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


News; Domestic
Impact: Why Won't Vice President Cheney Say Who He Got Advice From on the 
Energy Crisis?
Bill O'Reilly

06/27/2001
Fox News: The O'Reilly Factor
(c) Copyright Federal Document Clearing House. All Rights Reserved.

O'REILLY: In the "Impact" segment tonight, why won't Vice President Cheney 
tell us who he got advice from on the energy crisis? 
The General Accounting Office, the investigative arm of Congress, has asked 
Cheney for a list of people he has talked with because some Democrats are 
charging that big donors to the GOP are getting more access to Cheney than 
other Americans. So far, Mr. Cheney has not turned over the list.
His office told us that the GAO has no legal right to know who the vice 
president talked with and that making names public would discourage people 
from seeking an audience with government officials. 
You may remember Hillary Clinton tried to do the same thing with her 
health-care debacle. 
Joining us now from Arlington, Virginia, is "USA Today" energy and economics 
correspondent Jonathan Weisman who is following the story. 
JONATHAN WEISMAN, "USA TODAY": How are you? 
O'REILLY: I -- I'm not -- I'm not getting why Cheney won't turn this over. I 
mean, I know that they're saying the GAO doesn't have a right and all this 
stuff. But so what? Just turn the list over, right? 
WEISMAN: Yeah. Well, you know, they say that there's a principle here, that 
they feel like they -- they won't be able to get free and unfettered advice 
if whoever goes into the Oval Office is going to get grilled by the press 
afterwards. 
That doesn't make a lot of sense to me. I mean, a lot of people who go into 
the Oval Office go to the press and brag about it. In fact, I talked to the 
-- the chairman of Enron, the big natural gas company, told me all about a 
meeting with the Cheney task force and all the advice that he had given him. 
It doesn't make a lot of sense. I mean, they must just feel like it would be 
embarrassing to see a big list of a bunch of energy executives who had met 
with the Cheney task force. 
O'REILLY: So you think that it's -- that possible -- and we -- this is 
conjecture. I don't like to do conjecture, but because there's no reason -- 
concrete reason in my mind that this list wouldn't be put out there that it's 
possible the list is stacked to the right with GOP donors and people who are, 
you know, looking out for the energy area rather than the environmental area? 
WEISMAN: Yeah, it's certainly possible. I mean, I -- I actually know some 
environmentalists and some -- kind of the -- actually, old Clinton people who 
met with the energy task force to share their views. 
I know that both sides did do these meetings, but, I mean, by the way they're 
being very cautious about releasing these names, you've got to think that 
there must -- there must be something to... 
O'REILLY: Yeah. Well, if it's 10-1, that's not going to look too good, and 
that's the... 
WEISMAN: Exactly. 
O'REILLY: ... and that's why Democrats want it. They -- they want to 
embarrass the Bush-Cheney administration, correct? 
WEISMAN: Oh, the Democrats are looking for any way to make a Clinton era-type 
controversy stick to the Bush people, and this one just worked perfectly 
because, you know, it -- it was Hillary Rodham Clinton's task force that met 
secretly that got grilled. 
In fact, it was -- it was actually a civil suit against Hillary's task force 
that forced them to release all -- all their names. There hasn't been a civil 
suit filed, but these two Democratic members of Congress asked the GAO to do 
an investigation, and the GAO took them up on it. 
O'REILLY: All right. So we -- we've got to know that the motives are 
political, that the Democrats want to embarrass Cheney and Bush, and they 
might have an opportunity, if Cheney and Bush sought the counsel of, you 
know, the energy industry people, the drilling people, and the -- and the 
fossil fuel people, and then very few on the other side. So that could be 
a... 
WEISMAN: Right. 
O'REILLY: ... a potential source of embarrassment, but I... 
WEISMAN: Right. 
O'REILLY: I believe that all -- this isn't a big story as far as Americans 
are concerned. Just throw it out there. It's going to last for 10 seconds, 
no? 
WEISMAN: Well, the -- the funny thing is, when it was just, you know, Henry 
Waxman and John Dingell, these representatives from Congress just kind of 
badgering the White House, nobody paid much attention to it. It looked like a 
little partisan spat, right? 
As soon as the GAO, though, sent this letter saying, "Release this -- release 
this information or else," it was elevated to a different realm. 
Now it looks more like a battle between Congress, represented by its 
investigative arm, the GAO, and the White House... 
O'REILLY: Right. 
WEISMAN: ... and it becomes a much bigger deal. 
O'REILLY: Well, I think -- but the big deal for the people, and I don't care 
about the GAO or Cheney's office or any of that, but the folks have a right 
to know what's going on. I mean, that's the bottom line on this. 
WEISMAN: Yeah, it looks -- it looks like they're hiding. 
O'REILLY: Yeah. Well, they are. They are. They are hiding. Just like Hillary 
Clinton hid her list, Cheney's hiding his list. That's what they're doing. It 
doesn't look like it. That's what it is. I believe in open government. I want 
to know... 
WEISMAN: Yeah. And then... 
O'REILLY: ... who's going in and what they're doing because the Clinton 
administration abused that so by having Johnny Chung in there and everybody 
else. I don't want that to continue. 
I'll give you the last word on it. 
WEISMAN: OK. 
O'REILLY: The last... 
WEISMAN: All right. Well, let me tell you. One -- one other thing. They -- 
they make a lot of legal arguments about why the GAO doesn't have access and, 
you know, I'm not a lawyer, maybe they're absolutely right, but, you know, 
the Clinton administration also made a lot of legal arguments, and we're 
getting -- we're getting kind of tired of legal arguments. 
O'REILLY: I -- I know I am, and I think everybody wants open government. 
Mr. Weisman, thanks very much for your time. 
WEISMAN: You're welcome. 
O'REILLY: Plenty more ahead as THE FACTOR moves along this evening. 
Will your investments come back? The Fed cuts interest rates again, but some 
still say Alan Greenspan is not doing the job. 
And then ABC News correspondent John Stossel in the middle of yet another 
controversy. This time over kids and the environment. We'll talk with him. 
And we hope you stay tuned for those reports. 

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


Senators Ask Army Chief to Step Away From Energy Issue

06/27/2001
Dow Jones Business News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Associated Press 
WASHINGTON -- Two members of the Senate Armed Services Committee are asking 
the new Army secretary to remove himself from any involvement with contracts 
for military base utilities because of his ties to an energy company that is 
pursuing the business.
Sens. John McCain (R., Ariz.), and Jean Carnahan (D., Mo.), made the request 
Wednesday in response to a June 19 story by The Associated Press about Army 
Secretary Thomas White's ties to Enron Energy Services, where he served as 
vice chairman until earlier this year. 
The two senators wrote the Army chief that they believe he should step aside 
from the utility issue for at least a year to avoid the appearance of a 
conflict of interest. 
"No matter how impartial you would strive to be, the fact that you were 
vice-chairman of Enron, have owned a substantial amount of Enron stock, and 
recently lobbied on behalf of Enron on this very issue would raise in the 
public's mind a question about whether your decisions would be totally 
unbiased," they wrote. 
Army spokeswoman Capt. Amy Hannah said Mr. White has "received the letter and 
is currently studying the letter." 
Mr. White has said he would recuse himself from Enron-related decisions if 
there was a clear conflict of interest. He has been consulting with lawyers 
on the question while selling his more than $25 million in Enron stock. 
AP reported that Mr. White has been pressing to shift control of more 
military base utilities into private hands, a multimillion-dollar business 
Enron is pursuing. While at the company, Mr. White played an active role in 
pushing for such contracts. 
Sens. McCain and Carnahan, whose committee reviewed the Army secretary's 
nomination, told White that even if he sells his stock, "there would be a 
clear appearance of a conflict of interest" if he takes part in any matters 
related to Army utility privatization for at least a year. 
At the least, the Pentagon should release its determination on whether the 
value to the government of Mr. White's participation in the issue "outweighs 
the very significant appearance problems that such participation would 
entail," the senators wrote. 
In a cost-cutting move in December 1998, the Pentagon ordered each branch of 
the service to hire energy companies to run the electric, natural gas and 
other utilities on military bases. 
Mr. White said earlier this month that the program should be moving faster. 
He noted that the Army's Fort Hamilton in New York is the only Army base to 
turn over all of its utilities to a private company. Enron won the $25 
million, 10-year contract in 1999. 
"I see no reason whatsoever why the Army is in the energy business," Mr. 
White said. "It's a stupid business practice for the Army to be running 
itself that way." 
Enron has a bid pending to run utilities at several Texas bases, including 
seven Air Force bases, a naval base and the Army's Fort Bliss in Texas. 
Copyright (c) 2001 Dow Jones & Company, Inc. 
All Rights Reserved

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


UK: Companies prepare European gas trading contract.

06/27/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, June 27 (Reuters) - European energy companies will meet in London on 
Thursday to discuss plans for a standard European natural gas trading 
contract, the European Federation of Energy Traders said on Wednesday. 
"The meeting in London will be with lawyers and traders to discuss a draft 
contract," Jan van Aken, secretary general of the European Federation of 
Energy Traders (EFET) told Reuters.
He said a contract had been prepared by a working group of five companies who 
were picked for their involvment in discussions to prepare a similar European 
electricity trading contract. 
The firms involved are Germany's RWE , Essent from the Netherlands, UK-based 
Centrica , U.S. utilities Enron and Mirant , formerly known as Southern 
Energy. 
Van Aken said there would be consultation with the industry on the draft, 
adding he hoped the contract would be ready by the end of the year. 
The European Union started to open its gas markets to competition in 2000, a 
year after a similar process began in the electricity sector. 
Britain, which has liberalised the whole of its gas industry, has the most 
liquid gas trading market in Europe. 
In the rest of the EU, most gas is sold under long-term contracts although 
trading centres have started to emerge at Zeebrugge in Belgium, the entry 
point to the interconnector pipeline to the UK, and at Bunde on the 
German/Dutch border.

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