Finding out cause of blast
The Northern Echo, 08/24/01
UK: Electric work behind lethal Teesside blast-Enron.
Reuters English News Service, 08/24/01
"We Built a Heck of a Business"; Enron's former CEO Jeffrey Skilling is vague about the "balanced life" he wants but adamant that the company is in great shape
BusinessWeek Online, 08/24/01
Enron's Ken Lay: "There's No Other Shoe to Fall"; As the energy giant's stock tumbles after Jeffrey Skilling's sudden resignation, the interim CEO tries to reassure investors
BusinessWeek Online, 08/24/01
POWER POINTS: Skilling Moves On To Charities, Family
Dow Jones Energy Service, 08/24/01
New Ontario Power Market Date Not Firm Enough - Industry
Dow Jones Energy Service, 08/24/01
Jeffrey Skilling's Surprising Split from Enron; The CEO's abrupt resignation has some investors wondering what's behind the trickle of execs leaving the company
BusinessWeek Online, 08/15/01



Finding out cause of blast

08/24/2001
The Northern Echo
03
Copyright (C) 2001 The Northern Echo; Source: World Reporter (TM)

DETAILS have been officially released on the cause of the fatal electrical explosion at the Enron power station which killed three workers. 
Health and Safety Inspectors have completed the first stage of their investigation into the explosion on August 8 at the Teesside site.
The investigation has revealed that during a planned maintenance programme, part of the power station was shut down and the electrical power was redistributed to support the rest of the station. 
The voltages in one of the electrical systems was adjusted so a circuit breaker could be closed. 
At the time of the shutdown, employees were working to alter the voltage across a large transformer and the two operations at the same time resulted in an explosion and fire. The plant was shut down and did not resume producing electricity until Sunday, August 19. 
The next stage of the investigation will consider whether any lessons can be learnt from the accident to prevent it happening again. 
One man is still in hospital with serious burns following the explosion.

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

UK: Electric work behind lethal Teesside blast-Enron.

08/24/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, Aug 24 (Reuters) - An explosion that killed three men earlier this month at one of Britain's largest gas-fired power stations occurred during electrical switching, the plant's operators Enron said on Friday. 
"The explosion and fire at Teesside Power Station on 8 August occurred during a process to close a circuit breaker on an electricial transformer", the U.S. energy group said in a statement citing initial findings by the country's Health and Safety Executive (HSE).
A fourth Enron employee at the 1,875 megawatt power station remains seriously ill in hospital being treated for burns. 
"We are compiling a report for the Coroner", a spokesman for the HSE, the country's safety watchdog, told Reuters on Friday. He added that no report would be published ahead of inquests into the three deaths. 
"A decision on whether there might be a prosecution will also be made after the inquests", he added. 
The inquests were opened and adjourned last week. 
The HSE also said it was making assessments on whether there were any lessons the electricity industry should learn from the accident. 
HSE inspectors concluded their on-site investigation last week and the plant restarted operations at the weekend. On Friday Enron said the power station, commissioned in 1992, was currently operating at "planned generation levels."

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

Investing
"We Built a Heck of a Business"; Enron's former CEO Jeffrey Skilling is vague about the "balanced life" he wants but adamant that the company is in great shape

08/24/2001
BusinessWeek Online
(Copyright 2001 McGraw-Hill, Inc.)

More than a week after announcing his startling resignation from energy giant Enron Corp. for undisclosed personal reasons, former CEO Jeffrey K. Skilling, 47, says he has no regrets about leaving after only six months at the helm. Replacing him in the interim is Enron Chairman Kenneth Lay, who previously served as CEO for 15 years before Skilling stepped in. (See BW Online, 8/24/01, "Enron's Ken Lay: "There's No Other Shoe to Fall") 
So why did he quit? Skilling still isn't saying. A divorced father of three who's now engaged to be married anew, Skilling, like Lay, insists Enron is in great shape, with a deep bench of talent, despite a 50% drop in the company's stock this year. Indeed, Skilling is brimming with plans for his future. Before leaving for a whitewater rafting trip in Idaho with his 11-year-old son, he chatted on Aug. 23 with Dallas Bureau Chief Wendy Zellner. Here are edited excerpts from their conversation: 
Q: I have to start with the obvious question: Why are you leaving so abruptly? 
A. The answer we gave is exactly right. I left for personal reasons. Yeah, of course lots of things go on when you're making that decision. Sure, you watch the stock price and all the rest of that. But that wasn't the reason. The reason was, it was time.... I've worked very, very hard for a very long time. When you do that, something has to give. You kind of lead an unbalanced life and, at some point, you just decide, "Hey, there's a lot more to life than just working." 
Q: Why didn't you decide that before you became CEO [in February of this year]? 
A: That's another thing that bugs me a little bit. I came to Enron from McKinsey & Co. in 1990. I came over as chairman and chief executive officer of Enron Finance Corp. and went on to build our nonregulated merchant business. For most of my career at Enron, I was chairman and CEO of Enron Capital & Trade, and today it's 80% to 90% of net income of the company.... When people say this is surprising when you just became CEO, I've been CEO of businesses within Enron for a long, long time. I'm not sure I ever aspired to being CEO. I aspired to building a business. We built a heck of a business, and I'm very proud of that. Some people would even argue that it changed an industry. 
Q: You were quoted as saying that if the stock had been going in the other direction, you might not have felt the pressure to leave. Is that right? 
A: There are some things I need to do in my personal life, and I need to do them now. I don't think that [the stock going up] would have made a difference. 
Q: Is it some kind of family crisis? Is it about you personally or about other members of your family? 
A: I can't deal with that. I really can't explain it.... I'm looking forward now. I'm looking for things that I want to do, and there are a lot of things I'm very interested in right now. 
Q: What do you do next? 
A: I'll give you just a list of things. First, there are a number of personal and family things that are very important to me, and that's going to take a big chunk of my time. 
Another one that I think is important is the whole city of Houston and what has happened. The last couple of years, everyone has been blinded by Silicon Valley. I don't think they've realized...there are some very fundamental powerful things happening here.... We have fundamentally adopted and taken advantage of the power of the Internet, the power of computers in ways I don' t think any other industry and any other part of the country has really figured out. There are things I think I can do to be of assistance there.... There are some models there that other people ought to be looking at. 
I firmly believe that the model that Enron has created, this model where, over time, you use markets rather than vertical integration to tie together organizations and build services and products for customers, that's the future of business. It's happening more and more, but it has been masked by all this noise that has surrounded the dot-coms. 
Q: Are you talking about consulting? Or would you invest in some kind of technology-related business? 
A: I'm not sure yet. A number of people have sought me out for points of view, and I will continue to do that. I've even, believe it or not, been contacted about potentially being dean of a business school. 
Q: Which one? 
A: I can't say. I'm not leaving Houston, Texas. This is the place to be right now. The other thing I want to do is...spend some time on what I call hands-on charity.... There's a certain therapeutic value in going out and building a house for someone or cleaning up a park.... The other thing I'm hoping I have an opportunity to do is to help articulate the value of markets. When you look at something like the whole California thing, the problems in California were not a failure of the market -- they were a failure of political leadership. 
Q: You've said that you took the falling stock price personally. In hindsight, what do you think you did wrong or could have done differently? 
A: Anybody that had a high [price-to-earnings] multiple has been hammered. I think part of that was legitimate because...people had probably an unrealistic expectation of the effect technology would have on economic growth and productivity.... I put Enron in the same class as a lot of companies that are excellent companies that had very high p-e's, and that was adjusted by the market. 
Q: What will it take for Enron's stock to bounce back? 
A: You've got to get the stock price back the old-fashioned way. You've got to earn more money. If, quarter-in, quarter-out, the company continues to perform as it has, at some point, unless p-e multiples go negative, the stock goes up a lot. 
Q: Why didn't you wait a few more months to meet the timetable for having a $2 million company loan forgiven, at least? 
A: I'm lucky. I've done very well.... It has given me a luxury that 99.9% of the population doesn't have. I can do what I need to on the personal side. Two million in the grand scheme of things compared to living your life...I'm almost 48 years old. I started working full time when I was 14.... Now it's time to focus on things that put a little more balance in my life. 
Q: You've said Enron is in great shape and has surmounted most of its issues. Do you really believe that? 
A: I absolutely believe that.... The whole California thing [where Enron and others have been investigated amid allegations of manipulating markets after power prices soared last year] is pretty much done. In India [where Enron is in a payment dispute with the government over its $3 billion power plant there], I think we're making good progress.... I will say that broadband [Enron's new business for trading high-speed communications capacity] did surprise me.... It turned from a glut [in the industry] to a meltdown. 
As late as four or five months ago, it seemed that everything was on plan. It was evolving the way we expected it to evolve. And then the bottom just fell out. Suddenly, it was pretty hard to do business because anyone you did business with you didn't know if they could perform on their contracts. Huge credit problems. That was a frustrating experience to have called it right and still not have been able to create the kind of business that I know we will ultimately create there.... I think it set us back at least a couple of years. 
Q: What about reports that there was some unhappiness on your part about Chairman Ken Lay being too involved in the business again? 
A: I can absolutely, unequivocally say that is not the case. Ken Lay is a good friend. We've worked together closely for 16 years. Ken and I have always gotten along great. 
Q: When we talked as you were becoming CEO, I asked you what setbacks or failures you'd ever had in your life. You said none. Do you consider this to be your first failure? 
A: Maybe this will sound awful, but I don't. I remember when there were three of us on the 39th floor at Enron, when we got this whole nonregulated side of the business going. Like I said, I am very proud of what I and others accomplished at Enron. We built a company that, 10 years from now, 20 years from now, is going to be a factor to be reckoned with. I can probably say I have no regrets. 
Q: Were you surprised that your leaving drove the stock price down some more? 
A: Yes, because I firmly believed that everything was in good shape. I said to Ken, this is the time to do it if I'm going to do it because everything is in good shape.... Probably people are afraid there's another shoe to drop, but it's just not the case. 
Q: Do you ever want to be CEO of a company again some day? 
A: I won't say never. There are a couple of things I have got to get done over the next year or two. At the end of a year or two, I don't know. I'll kind of take it as it comes. I tend to be a very enthusiastic, optimistic kind of person. I've almost never gone more than 30 days without having some sort of earth-shattering idea, most of them probably pretty crazy. But over the next couple of years, while I'm doing what I need to do, I'll probably come up with some new ideas.... You probably haven't seen the last of me.

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

Investing
Enron's Ken Lay: "There's No Other Shoe to Fall"; As the energy giant's stock tumbles after Jeffrey Skilling's sudden resignation, the interim CEO tries to reassure investors

08/24/2001
BusinessWeek Online
(Copyright 2001 McGraw-Hill, Inc.)

Enron Corp.'s Jeffrey K. Skilling dropped a bombshell on Aug. 14, when he abruptly resigned as the company's president and CEO, citing "entirely personal reasons (see BW Online, 8/15/01, "Jeffrey Skilling's Surprising Split from Enron"). Skilling has since allowed that the precipitous 50% drop in the Houston-based energy giant's stock this year had something to do with his decision. Meanwhile, Enron's stock has fallen an additional 14%, to around $36, following Skilling's resignation (for a Q&A with the former CEO, see "We Built a Heck of a Business"). 
Enron immediately named its chairman, Kenneth L. Lay, as Skilling's interim replacement. Lay is no stranger to the job, having served as CEO from 1985 until Skilling became CEO in January. During Lay's 15 years at the helm, he transformed Enron from a regional natural-gas pipeline company into the world's largest energy-trading company -- guided in part by Skilling, who he was grooming as a successor. 
Enron's market capitalization under Lay increased from $2 billion to $70 billion, and Enron's shareholders received a total return three times that of the S&P 500. The company, which had revenues of $101 billion in 2000, markets electricity and natural gas, delivers physical commodities, and provides financial and risk-management services to customers around the world. It has also developed an intelligent network platform to facilitate online business. 
In an exclusive interview on Aug. 20 with BusinessWeek Dallas Correspondent Stephanie Anderson Forest, Lay discussed Skilling's resignation, the search for a permanent successor, and the future of Enron. Here are edited excerpts from their conversation: 
Q: Since his official resignation announcement Aug. 14, Mr. Skilling has since added that one of those personal reasons included Enron's falling stock price on his watch. A declining stock price doesn't seem like a very personal reason. 
A: I believe the stock price played a role in his decision. He was probably feeling quite a bit of pressure from the stock price decline, from California [where state regulators are asking Enron and other power companies to refund billions in alleged energy overcharges], from India [Enron is involved in a high-profile, costly fight with the Indian government over its $3 billion Dabhol power plant], and other issues. I think all of those kinds of things impacted his decision. 
Q: There has been some concern among investors that perhaps there is more to his resignation than meets the eye, perhaps accounting or other issues that have yet to come to light. Is there anything more? 
A: There are absolutely no problems that had anything to do with Jeff's departure. There are no accounting issues, no trading issues, no reserve issues, no previously unknown problem issues. The company is probably in the strongest and best shape that it has ever been in. 
There are no surprises. We did file our 10-Q [with the Securities & Exchange Commission] a few days ago [Aug. 14]. And, if there were any serious problems, they would be in there. If there's anything material and we're not reporting it, we'd be breaking the law. We don't break the law. 
Q: Did he disclose these personal reasons to you? 
A: Yes...and they are very legitimate, personal reasons that Jeff will have to disclose when and if he sees fit. He says he wants to keep those reasons private and I respect that. I can say, these are situations that needed to be addressed now. These are things that he can't put off dealing with for two to three years. 
Q: Are these personal issues related to his health? 
A: No. 
Q: When did he tell you he wanted to resign and what was your reaction? 
A: I don't recall the exact date. It was a few days before the board meeting. I called several of the board members before the meeting to let them know what was going on. I do remember I was in my office when he told me. I had been out of town on a business trip and had just gotten back the night before. The next morning he came over to my office and said he had a few things on his mind. We went over several business items for about 20 to 30 minutes. Then he said, "I've decided I need to step down as president and CEO and leave the company." 
I said, "You're going to do what?" I was very surprised. I asked him if there was anything I or the board had or had not done that led him to this decision. He said no. I then asked him if there was anything I or the board could do to persuade him to stay. He said his mind was made up. That was on a Friday. 
The following Monday, we talked again. I asked him if he had changed his mind. He said no. Over the next few days, I tried three or four times to talk him out of it, but he had his mind made up. He needed to deal with these [personal] issues right away, not two or three years from now. 
Q: These issues couldn't have waited a few months? I ask because according to the [2000] proxy, had Mr. Skilling stayed on through the end of the year, his $2 million debt to the company would have been forgiven. [According to the proxy, in 1997 Enron loaned $4 million to Skilling, who repaid $2 million of that in 1999. His employment contract, which ran through the end of 2003, called for the balance of the loan to be forgiven if he stayed on until December 31, 2001.] 
A: Jeff knew full well what he was walking away from. Again, he needed to deal with this right away. [Note: Skilling also relinquished severance pay by walking away voluntarily. Had he been forced out, Skilling would have been eligible to receive a single severance payment of at least $19.9 million, not including the value of the options received in 2000, according to Enron's 2000 proxy statement. Also, the nonvested portion of the 2.4 million stock options he owns immediately would have become vested, the proxy statement says.] 
Q: Judging by the stock's performance since the announcement, investors appear to still be skeptical. 
A: Yes, and I understand that. Investors don't like uncertainty. When there's uncertainty they always think there's another shoe to fall. There is no other shoe to fall. 
Q: Is the door open for Mr. Skilling to return to the CEO post after he has resolved these personal issues? 
A: It's always a possibility. But he understands that we've got to move ahead, and I assume for now we will be moving on without him. He will be dealing with these other issues for at least a year or two. 
Q: What will the new management team look like? 
A: Clearly, there will be changes in the office of the chairman. Jeff and I had shared responsibility in that office since 1997 and, from time to time, we have had one other person in that office. I'll be looking for some help now. We will appoint one or two people to that office within the next few days. 
Q: Who are the likely candidates? 
A: Any slots at the senior level, including CEO or other slots, will be filled internally. That tells you how confident we are in the talent we have. We have a a number of senior executives qualified to serve in this capacity. We have many large businesses in Enron, any one of which would be ranked rather high as a standalone. Anyone of the top two people in any of these businesses or our CFO, chief accounting officer or chief of staff would be qualified. [That pool of executives include: CFO Andrew S. Fastow, Chief Accounting Officer Richard A. Causey, Chief of Staff Steven J. Kean, Chairman and CEO of Enron Energy Services Dave Delainey, Chairman and CEO of Enron Wholesale Services Mark A. Frevert, CEO Enron Global Assets & Services Kevin P. Hannon, and Chairman and CEO Stanley C. Horton of Enron Transportation Services Co.]. 
Q: Despite having a deep bench of talented executives, some analysts say few Enron executives are as seasoned as Skilling was. Is that a concern? 
A: No, because the ones I'm looking at are very seasoned, though some are more seasoned than others. They are all very strong candidates who understand our business and our culture. In every case, [the candidates] have been here several years, and, in some cases, 11 or 12 years. These are not unseasoned people. 
Q: So, whoever makes it to the office of the chairman has a shot at being Enron's next CEO? 
A: Yes, but I have made it very clear that although they certainly will be on the list of people to be the CEO, they're not guaranteed to be the CEO. 
Q: What qualities will you and the board be looking for in Enron's next CEO? 
A: We'll be looking for a good, strong leader, a very effective leader [who] really knows our business -- all our businesses, not just what they're running today. We're also looking for a good people person who is able to motivate others and get strong performances out of people. We need someone who is a strong representative of our value system. 
That someone would also be very intelligent, very creative, and able to develop successful strategies. Being a good communicator is also very important. Clearly, to be a good leader you need to be a good communicator. 
Q: How involved will you be with the company until a new CEO is found? 
A: I've extended my contract with the company through 2005 and have reassumed the CEO and president positions [both previously held by Skilling]. I have told the board I will stay as long as necessary to get our next level of succession ready and to get the board and investors comfortable with that person. I didn't expect to be CEO again, but I'm happy to be doing it. 
Q: Will Mr. Skilling's departure bring a new shift or focus in Enron's business strategy? 
A: There won't be any refocus. [Since turning over the CEO reins in January], I have stayed actively involved and working full-time as Jeff asked me to. More importantly, the current direction of the company was jointly decided by both of us in the last several years. 
Q: And, the fundamentals of the business strategy remain solid? 
A: Yes. We think the company is on solid footing, and we're looking forward to continued strong growth. We had a very, very strong first half, including second-quarter net income up 40%, earnings per share up 32%, and operational physical volume delivery up 60%. In the last five years, we have had 25% per year compounded annual growth in earnings per share. 
I think you'll continue to see strong growth in all of our business areas. Our revenues and income quarter-to-quarter continues to be strong and we have strong momentum. We think that will be sustained, and eventually, if we continue to do that, investors will recognize and reward us for that.

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

POWER POINTS: Skilling Moves On To Charities, Family
By Mark Golden
Of DOW JONES NEWSWIRES

08/24/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW YORK -(Dow Jones)- Jeff Skilling will be spending the next few years working with charities in Houston and spending time with family, the former chief executive of Enron Corp. (ENE) said in an interview. 
The 47-year-old Skilling, who resigned abruptly from Enron after the company's board meeting Aug. 14, repeatedly said he had left - as stated - for personal reasons. Wall Street has been skeptical of the explanation, and several analysts have said they're waiting for "the other shoe to drop." The company's stock price fell 14% in response to the announcement last week - a loss of about $4.5 billion in shareholder value - and hasn't recovered this week.
But the former chief executive said the stock price will recover once investors see that his departure isn't a precursor to more bad news for the company. 
"I've spent the last 34 years working really hard," said Skilling, who requested the interview with Dow Jones Newswires. "There are a lot of things that I haven't been doing - personal interests, spending time with family. There are a number of charitable things that I haven't spent the time on that I believe I should. I don't mean fundraising, but hands on, getting out and doing things, building houses, helping individuals." 
Skilling, who has been involved with a multiple sclerosis charity for years, said he plans to get involved in promoting the City of Houston. 
"It's massively underrated as a place to work and live," he said. "It's a great city, and I think I can do a lot to get that across." 
Though insistent that there is nothing more to his departure than personal reasons, Skilling said little to reveal why a talented executive would surrender the top spot of the country's largest energy trading company just six months after taking the job. Skilling had been Enron's No. 2 executive from 1997 until this year, and he's generally credited with the success of Enron's wholesale trading operations, which comprise about 80% of the parent's earnings. 
He confirmed there's no crisis in his family, and his health is fine. Skilling, who assumed the chief executive title on Feb. 12, also denied that he was suffering under the strain of the job. 
Late last week, Chairman Kenneth Lay and other Enron executives in New York told Wall Street analysts that Skilling had been going "kind of nuts" under the pressure of being chief executive, one analyst said. 
"It's not true that I was cracking up," he said. "Do I sound like someone who is cracking up? The representation of me as thick-skinned is a reasonable representation." 
When asked if his departure could have been handled more smoothly so as not to alarm investors, Skilling said that perhaps the mechanics could have been better, but said that is hindsight. 
"We thought it through and thought we were going about it in the right way," he said. "I don't know what we could have done differently. It will turn out, in retrospect, fine, as soon as people see that there's nothing else." 
About One Week's Notice 

The former chief executive totally disagreed with speculation in this column last week that Enron Chairman Kenneth Lay, who immediately resumed the role of chief executive, may have wanted to regain day-to-day control of the company and pushed Skilling out. 
"I think the world of Ken. You can't find a bigger fan of his than me," he said. "I was not forced out. Personal and family reasons are 100% of the story. I guess it's kind of mundane, and I'm sorry it doesn't have as much drama and suspense as a lot of people would like it to have, but that's what the deal is." 
Skilling said he spoke with Lay about wanting to do other things many times over the years. The first serious discussion of his imminent departure came about a week before the announcement, said Skilling, whose recollection of his giving notice to Lay was somewhat cloudy. 
"The board knew what was going on, and that was the point (the Aug. 14 board meeting) where the decisions were going to be made," he said. 
The decisions? 
"I guess to accept my resignation," Skilling said. 
Enron refused to release a copy of the minutes of the Aug. 14 board meeting, which was regularly scheduled. The company doesn't generally release board-meeting minutes, spokeswoman Karen Denne said. 
The former chief executive continues to work as a paid adviser to Enron. A clause in his contract prevents him from competing with the company through the end of 2003, and he has no plans to work outside the energy industry. 
That might sound like a big comedown from running the country's most aggressive energy company, but Skilling said the move fits. 
"Some people say 'Well, you were working and aspiring so long to become CEO of Enron.' That's not true. I was working to build a business, and we did," said Skilling, who is credited with transforming the company into a trading powerhouse. 
"The company I built is doing great. My life is moving on." 
He also said the company will do fine without him. Some analysts have expressed concern about Enron's ability to retain its top talent. Skilling's predecessor as Enron's No. 2 executive, Richard Kinder, for example, left the company in 1996 after Lay announced that he would be retaining the chief executive spot for another five years. Kinder went on to buy Enron's small liquids pipeline business and turned that company into Kinder-Morgan Inc. (KMI). 
Enron's current management, Skilling said, has a "very deep bench." For example, he described Enron Energy Services Chief Executive Dave Delaney as "awesome." 
"Dave created the Canadian business in Enron," Skilling said. 
-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com

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


New Ontario Power Market Date Not Firm Enough - Industry

08/24/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

CALGARY -(Dow Jones)- Power brokers called on Ontario to set a firm date for its electricity market opening - and stick to it, after provincial agencies pointed to a March 1, 2002, deadline this week. 
The new timetable - the fourth adjusting of dates since 1999 - will increase costs for established firms and could further erode interest of potential investors, energy representatives said Friday.
"Our major concern is the historical pattern of delays that we've had with Ontario market opening," Ron Milnthorp, president of Enron Canada said. 
"We can't invest capital on a conditional basis, and, therefore, we need an unconditional market opening." 
Earlier this year, Enron Canada put a C$200-million power plant project for southwestern Ontario on hold after Premier Mike Harris set back an expected May market opening indefinitely. 
The revamped market readiness testing schedule released by the Independent Electricity Market Operator and the Ontario Energy Board Tuesday extends retail and wholesale testing to December and February, and includes fines of up to C$10,000 a day for late completion. 
"We are doing out best to meet what we think is a realistic deadline," IMO spokesman Kevin Dove said. 
Milnthorp said Enron Canada now is more optimistic the government will stick to a spring 2002 date. 
Technical difficulties were blamed in setting back deregulation from May to this November, and from fall of 2000. 
Critics also say the California crisis, which saw electricity prices skyrocket in that state, caused the Ontario government to delay deregulation to placate nervous consumers. The uncertainty has cost an estimated C$3 billion from proposed power plants being put on hold, 
"Any further delay will have severe implications on investor confidence in the market," TransAlta (T.TA) spokesman Adam White warned from Toronto. 
This summer TransAlta (T.TA), Canada's largest investor-owned power generator, said it would defer any new investment in Ontario because of market uncertainty. 
Work on the corporation's C$400-million Sarnia cogeneration plant continued, however, and it will start producing power in spring of 2002. The latest market delay just means TransAlta won't have the benefit of watching the market and trading in it before commissioning the plant, White said. 
Smaller retail distributors are being blamed in part for the delay because of difficulties setting up new billing and accounting systems. 
Toronto Hydro has offered to help other retailers set up their systems to get deregulation up and running. 
"Every day we don't have market-opening date, we have money going out," spokesman Stephen Andrews said. "It is a significant cost in terms of opportunity." 
Final approval for market opening will have to be given by the provincial government, which so far has refused to set a firm date. 
-By Dina O'Meara, Dow Jones Newswires; 403-531-2912; dina.omeara@dowjones.com

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

Technology
Jeffrey Skilling's Surprising Split from Enron; The CEO's abrupt resignation has some investors wondering what's behind the trickle of execs leaving the company
By Stephanie Anderson Forest in Dallas

08/15/2001
BusinessWeek Online
(Copyright 2001 McGraw-Hill, Inc.)

The steady drip of executive departures continues at Houston energy giant Enron (ENE). After the close of markets on Aug. 14, Jeffrey K. Skilling, the company's hard-charging president and CEO, shocked the investment community by unexpectedly resigning. In a conference call with investors, Skilling, said he was leaving for personal reasons, which would remain private. Prior to taking over the CEO post in February, Skilling had been chief operating officer. While it looks for a successor, Enron says Skilling's duties will be assumed by longtime Chairman Kenneth Lay. "I want to thank Ken Lay for his understanding of this purely personal decision," Skilling said in a statement. 
The 47-year-old Skilling joined Enron in 1990 after leading McKinsey's energy and chemical consulting practices. Under his leadership, Enron pioneered the use of risk-management products and new contracting structures in the natural-gas industry. He has since applied similar concepts in electricity, bandwidth, metals, and a range of other commodity products. Along with Lay, Skilling helped transform Enron from a natural-gas pipeline company into an energy-trading powerhouse. 
Skilling has predicted that Enron will surpass $200 billion in revenue this year, making it the second-largest U.S. energy company behind ExxonMobil. Last year, Enron earned $979 million on revenue of $101 billion. While the company has 25,000 miles of gas pipeline and merchant power plants in the U.S. and abroad producing 9,000 megawatts of electricity, Enron recently has been shedding many energy assets, including its natural-gas and crude-oil drilling unit, to pursue its goal of becoming the industry's leading middleman, bringing together buyers and sellers of energy products. 
BLOCKBUSTER BUST. Skilling's tenure in the No. 2 position has been tumultuous -- marred by a huge and costly fight with the Indian government over payment for construction of Enron's $3 billion Dabhol power-plant project and the nasty breakup of a video-on-demand broadband Internet deal with Blockbuster. Skilling's push into broadband has produced lackluster results. The upshot: Enron's stock has fallen from a 52-week high of $90.56 on August 23, 2000, to $42.93 on Aug. 14, ahead of the announcement. 
The company didn't immediately comment on what led Skilling to quit, but a spokesman insists it has nothing to do with Enron's stock performance. "We regret Jeff's decision to resign, as he has been a big part of our success for over 11 years," Lay said in a statement. "But we have the strongest and deepest talent we have ever had in the organization, our business is extremely strong, and our growth prospects have never been better." 
Indeed, the company says it plans to look for Skilling's successor within the ranks, though it declined to name possible candidates. But some analysts and investors say Enron may have trouble landing a replacement. "Rarely do you find those kinds of organizational and management capabilities embodied in one individual," says analyst Robert L. Christensen Jr. of First Albany in New York. "There's no clear second in command. It's purely a guessing game at the moment." 
MURKY DEPTH CHART. Skilling's departure likely won't sit well with investors, who are concerned about Enron's losing a number of key executives recently, including Vice-Chairman J. Clifford Baxter and Kenneth D. Rice, chairman and CEO of Enron Broadband Services. "Three years ago, the [management] depth chart was very apparent. The company had started to look like the General Electric of the energy logistics business," says one investor. "Now, I'm not too sure." 
Skilling, who wasn't immediately available for comment following the conference call, will remain as a consultant. Lay, who was also unavailable, served as Enron's CEO from 1985 until Skilling's election earlier this year. He has agreed to extend his employment agreement through 2005. Said Lay during the call: "I'm prepared to stay here as long as it takes to get to our next level of succession." If the skeptics are right, that could turn out to be longer than Lay expects.

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