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		 Subject: Enron says high power rates costing Japan- Reuters

JAPAN:
Enron says high power rates costing Japan.

05/15/2001
Reuters English News Service
(C) Reuters Limited 2001.

TOKYO, May 15 (Reuters) - A senior executive of U.S. energy giant Enron Corp
said on Tuesday that Japan could save an estimated four trillion yen ($32.45
billion) in annual costs if electricity rates were cut to the average of
members of the Organisation for Economic Cooperation and Development (OECD).

"If you were to pare Japanese industrial electric rates to the OECD
average...savings to all...customers would be about four trillion yen per
year," Enron Corp Vice President Steven Kean told a seminar in Tokyo.
Speaking at a seminar on electric power deregulation, Kean said that
indigenous factors such as steep land prices and a lack of natural energy
resources were often blamed for Japan's high electricity rates.

But he said these factors were not sufficient to explain Japan's high
electricity rates.

A report commissioned by Enron Japan Corp showed that in 1998 Japan's
electricity rates for industrial users were 16.81 yen per kilowatt hour (kWh)
compared to a second highest rate of 12.44 yen in Italy.

Japan's business sector has expressed concern at the nation's high electricity
rates, saying that it blunts their competitive edge on the international
market.

Kean also drew parallels between Japan, in the midst of deregulation, and
California which has been suffering from a power shortage since deregulating
its market in 1998.

These included the length of time that authorities in Japan took to issue
permits to allow the construction of new power plants, he said.

"The regulatory structure in Japan is very strict...just like in California,"
Kean said.

North America's biggest buyer and seller of electricity, Enron gained its
first foothold in Japan in 1999 when it established affiliate E Power Corp.

In April of last year, it set up subsidiary Enron Japan Corp.

Kean urged Japan to step up measures to open up its power market, a process he
said held many benefits.

Japan is in the process of deregulating its power market. Since March last
year, large-lot consumers have been free to chose their suppliers. The measure
liberalised an estimated 30 percent of the power market and ended Japan's 10
power utilities regional monopoly.

However, industry watchers note that there have been very few new entrants and
that further deregulation measures must be taken for rates to fall. The
Japanese government is due to review the process in 2003.



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