Public Service Says 1st-Qtr Profit Fell 5.9 Percent (Update2)
Bloomberg, 04/17/01

Enron Bandwidth Unit Reports Loss For First Quarter
Dow Jones Energy Service, 04/17/01

USA: Enron CEO uses naughty word on conference call.
Reuters English News Service, 04/17/01

Enron, Dynegy post healthy profit gains on energy demand
Associated Press Newswires, 04/17/01

USA: Enron Broadband posts expected loss amid mixed growth.
Reuters English News Service, 04/17/01

WSJ.COM WRAP: Enron, Dynegy Post Immpressive Results
Dow Jones News Service, 04/17/01

Action on energy trading floors reverberate in power-hungry California
Associated Press Newswires, 04/17/01

Energy Trading-Floor Gambits Perturb Power-Hungry US West
Dow Jones Energy Service, 04/17/01

High demand for power behind Enron's increased earnings
Associated Press Newswires, 04/17/01

Enron CEO: Earnings Target Up By A Nickel
CNNfn: Market Coverage - Morning, 04/17/01

Enron Corp. Says First-Quarter Profit Rose 20 Percent (Update6)
Bloomberg, 04/17/01

Dynegy's 1st-Qtr Profit Rises 73% on Gas, Power Sales (Update4)
Bloomberg, 04/17/01

Red Herring 100 Celebrates Top Companies Reshaping Business
PR Newswire, 04/17/01

Enron Says PG&E Owes About $570 Million, CNBC Says (Update1)
Bloomberg, 04/17/01



Public Service Says 1st-Qtr Profit Fell 5.9 Percent (Update2)
2001-04-17 17:25 (New York)

Public Service Says 1st-Qtr Profit Fell 5.9 Percent (Update2)

     (Updates with profit from operations in second paragraph and
possible expansion in California in second section. For more on
the California electricity crisis, see {EXTRA <GO>}.)

     Newark, New Jersey, April 17 (Bloomberg) -- Public Service
Enterprise Group Inc., owner of New Jersey's largest utility, said
first-quarter profit fell 5.9 percent because of a rate cut and
higher fuel costs.
     Profit from operations fell to $254 million, or $1.22 a
share, from net income of $270 million, or $1.25, a year earlier,
spokesman Paul Rosengren said. Revenue rose 13 percent to
$2.81 billion from $2.48 billion.
     The company has been trying to expand outside New Jersey as
the state opens its energy markets to competition. Talks to buy
Cinergy Corp., owner of Cincinnati's utility, for about $5.6
billion fell apart in March, possibly because it offered only a
slight premium, according to newspaper reports.
     The company's Public Service Electric & Gas utility has
3.5 million New Jersey customers. Utility profit fell 11 percent
because of a 2 percent power-rate cut and costs to refinance debt,
the Newark, New Jersey-based company said.
     Profit at PSEG Power, the company's U.S. trading and power-
generation unit, fell 19 percent because of higher fuel costs and
interest expenses. Public Service uses natural gas to fuel some of
its power plants. Gas prices more than doubled from a year ago.
     A $2 million charge for a debt payment and a $9 million gain
from an accounting change made net income $261 million, or $1.25 a
share, the company said. Public Service had 208 million shares
outstanding in the latest quarter. It had 216 million shares
outstanding a year earlier.
     Operating profit of PSEG Energy Holdings, which includes
international business, rose 88 percent. Public Service expects to
have 3.7 million customers outside the U.S. after some
acquisitions are complete, the company said.

                            California

     Public Service is talking with California officials about
expanding six power plants in the state, Rosengren said. The
plants, owned 50 percent by Public Service, generate enough power
for 150,000 U.S. homes and might be ``substantially enlarged''
with turbines Public Service has on order, provided the state
confirms payment for power, he said.
     He declined to provide details on the size of the expansion.
     Shares of Public Service rose 90 cents to $46.08. They have
fallen 5.2 percent this year.


Enron Bandwidth Unit Reports Loss For First Quarter

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

HOUSTON -(Dow Jones)- Enron Broadband Services was the only one of Enron 
Corp.'s (ENE) business sectors to report a loss for the first quarter of 
2001, company executives said in a conference call with analysts Tuesday. 
Before interest and taxes, Enron reported a loss for Broadband Services of 
$35 million for the first quarter of this year compared to a break-even 
quarter a year ago.
"Only one sector is down from what we expected and that's broadband," Enron 
President and Chief Executive Jeff Skilling told investors. "The other 
sectors are up, significantly up." 
Enron Corp. reported earnings of $405 million on revenues of $50.1 billion 
for the first quarter of 2001. The per-diluted share earnings were 49 cents, 
compared with 40 cents in the year-ago period. 
Company executives also revised upward their per-share earnings goal for 2001 
from $1.73 to the $1.75-$1.80 range. 
The Broadband Services loss came on $83 million in revenues compared to $59 
million last year. The total value of contracts for the first quarter 2001 
was $45 million, compared with $31 million in the first quarter 2000. 
Broadband Services delivered 43,400 terabytes of capacity in the first 
quarter 2001, up from 6,005 terabytes a year ago. For all of last year, the 
company delivered a total of 72,406 terabytes of bandwidth. 
Skilling said the company has contracts to deliver 40% of its goal of 570,000 
terabytes this year. 
"We're making excellent progress in creating a commodities market," he said. 
Broadband Services did a total of 580 transactions in the first quarter of 
2001, double the 236 transactions it did in the fourth quarter of last year. 
In all of 2000, the company did 321 trades. 
In the first quarter, Enron added 70 new customers, bringing its total up to 
120, Skilling said. 
He added that 70% of those customers are carriers or network service 
providers. 
Skilling said he is disappointed with the slow growth of the long-term deal 
origination segment of the bandwidth operation. 
"We face one big issue in this market, the counterparties have no credit 
capacity," he said. 
The Broadband Services loss wasn't due to increased costs of seeking 
video-on-demand partners to replace Blockbuster Inc. (BBI). Enron and 
Blockbuster canceled an exclusive agreement to distribute movies via the 
Internet in the first quarter. 
Enron will seek to make deals with motion picture companies directly. The 
biggest snag in making those deals are Hollywood's desires. 
"They want to keep as much of the money as they can," said Ken Rice, chairman 
and chief executive of Broadband Services. 
-By Erwin Seba, Dow Jones Newswires, 713-547-9214 erwin.seba@dowjones.com

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


USA: Enron CEO uses naughty word on conference call.

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

(Editors note language) 
By C. Bryson Hull
HOUSTON, April 17 (Reuters) - Enron Corp.'s top executive Tuesday publicly 
fired off the same vulgarity that brought President George W. Bush 
embarrassing headlines when he unwittingly uttered it in front of an open 
microphone last fall. 
But unlike 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. 
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. 
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," Grubman grumbled. 
"Well, thank you very much, we appreciate that. Asshole," Skilling responded 
with a laugh. 
Skilling, whose candor frequently gives his public relations staff fits, told 
Reuters in a telephone interview that he knew the microphone was on. 
"The specific fellow that I was not real happy with is a shortseller 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," 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. 
Grubman said he felt "pretty thin-skinned" about the remark. 
He disputed Enron's assertion the balance sheets and cash flow statements 
were not ready yet, particularly in light of 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," 
Grubman said, adding: 
"He's got some nerve. He and his management team sold 7 million shares into 
the market last 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. 




Enron, Dynegy post healthy profit gains on energy demand
By The Associated Press

04/17/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

Energy wholesalers Dynegy Inc. and Enron Corp. posted healthy profit gains 
Tuesday, beating Wall Street's expectations, as demand for electricity and 
natural gas surged during the first quarter. 
Both companies saw revenues jump as well, with Enron's sales coming in nearly 
four times that of the previous quarter.
Carol Coale, an analyst with Prudential Securities Inc. in Houston, said 
Enron's results were no surprise because of increased demand for power and 
gas in power-strapped California and across the country. 
"Clearly the California energy crisis has raised the bar on those power and 
gas trading and marketing profits," she said. "Opportunities have existed 
outside California as well." 
Meanwhile, Dynegy, a major power generator in California, said it was being 
"unfairly and inaccurately" accused of withholding power from the state's 
power market. It said that sales there "did not make a material contribution" 
to first-quarter results. 
Enron Corp. 
Houston-based Enron, the world's top buyer and seller of natural gas and 
electricity, said Tuesday that it earned $425 million, or 49 cents per share, 
in the three months ended March 31, compared with $338 million, or 40 cents 
per share in the year-ago period. 
This year's results include a $19 million, or 2 cents per share gain, due to 
the adoption of new accounting standards; excluding the item, Enron earned 
$406 million, or 47 cents per share. 
The result beat comparable expectations of analysts surveyed by Thomson 
Financial/First Call, who predicted earnings of 45 cents per share. 
First-quarter revenues nearly quadrupled to $50.1 billion, compared to 
revenues of $13.1 billion in the first three months of 2000. 
Enron also increased its 2001 overall earnings prediction to $1.75 to $1.80 
per share. Previously, the company said it expected 2001 earnings of $1.70 
and $1.75 per share, and the consensus of analysts was for $1.74 per share. 
"Enron's wholesale business continues to generate outstanding results. 
Transaction and volume growth are translating into increased profitability," 
said Jeff Skilling, president and CEO of Enron. 
The company attributed the increase to continued growth in its wholesale 
energy-trading business, acceleration in its retail energy services and in 
its broadband Internet business. 
In its wholesale business, Enron resells power and gas to utilities and other 
large customers. That business accounted for 96 percent of its first-quarter 
revenues. 
Shares of Enron rose $1.04 to $60.48 in trading Tuesday on the New York Stock 
Exchange. 
Dynegy Inc. 
The Houston-based energy marketer said Tuesday it earned $139.5 million, or 
41 cents a share, in the first three months of 2001, more than double that 
from first-quarter 2000 earnings of $69 million, or 26 cents per share. 
Analysts surveyed by Thomson Financial/First Call expected Dynegy's 
first-quarter earnings to be 40 cents a share. The results include a $2 
million gain for an accounting change, which did not affect the per-share 
figure. 
Revenues for the first three months of the year were $14.2 billion, nearly 
triple the $5.3 billion reported in the same period a year ago. 
Dynegy chairman and chief executive officer Chuck Watson attributed the 
increase to cold weather demands in northern states, not the California power 
shortage. 
In a statement following the release of the earnings, president and chief 
operating officer Steve Bergstrom defended the company, saying it had been 
"unfairly and inaccurately accused of withholding power from the California 
market." 
"As we have repeatedly communicated to California policy-makers and 
regulators and to industry officials, we remain ready and willing to generate 
and sell power to any and all buyers, at fair and reasonable prices, when 
they are able to provide appropriate assurances that they will fulfill their 
obligation to pay for those purchases, Bergstrom said. 
Dynegy said it has softened nearly all of its prospective credit exposure in 
the California market through an agreement with the California Department of 
Water Resources to provide the state with up to 2,300 megawatts of 
electricity through 2004. 
Shares of Dynegy rose $2.17 to $55.32 in trading on the NYSE. 
--- 
On the Net: http://www.enron.com 
http://www.dynegy.com

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


USA: Enron Broadband posts expected loss amid mixed growth.
By C. Bryson Hull

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

HOUSTON, April 17 (Reuters) - Enron Corp.'s nascent broadband Internet 
division posted an expected quarterly loss on Tuesday amid a weak 
telecommunications market and mixed growth in the Houston energy giant's 
flashiest unit. 
Enron Broadband Services reported a loss of $35 million on $83 million in 
revenue, compared with a break-even first quarter in 2000, when it had $59 
million in revenues.
Enron has consistently said it did not expect its broadband arm to record a 
profit until 2002 and instead has offered other measures of growth by which 
to benchmark the unit's progress. 
The broadband unit encompasses two distinct segments: the bandwidth 
intermediation business, which turns Internet bandwidth into a tradeable 
commodity; and the content services division, which engages in sales and 
transmission of Internet content. 
The bandwidth trading unit recorded 580 transactions in the first quarter of 
2001, compared with 321 in all of last year. It delivered 43,400 terabytes - 
a unit equal to one trillion bytes - in the first quarter, compared with 
6,000 in the similar year-ago period, a more than sixfold increase. 
But Enron President and Chief Executive Jeff Skilling said he was 
disappointed with the rate at which Enron is signing large, structured 
bandwidth contracts, which he said are a casualty of the low credit capacity 
of potential counterparties. 
"If you look at most of the large telecom companies right now, you would be 
hard-pressed to assume they could perform on a contract that is anything more 
than six months to a year long," Skilling said. 
Enron's bread-and butter, developed in the natural gas business, is creating 
long-term commodity deals that are geared to combat price volatility for its 
customers. 
Skilling said Enron is looking at ways to use the inherent credit of 
telecommunication companies' assets to finance the deals, much as Enron did 
with credit-poor natural gas companies in the mid-1980s. 
"This is going to come a little slower than what we expected," he 
acknowledged. 
The content services unit had suffered some setbacks during the first 
quarter, including the premature dissolution of its marquee 20-year video on 
demand deal with Blockbuster Inc. 
EBS also trimmed 20 percent of its staff last month, moving them out of the 
unit and into other parts of the parent company. 
"The losses in bandwidth have nothing to do with Blockbuster," Skilling told 
investors. 
Rather, the changes came as a result of Enron slashing $500 million off the 
$750 million it had set aside to build its network. The weak telecom market 
means a long bandwidth supply and an easy way for Enron to secure contractual 
access to bandwidth at low prices, Skilling has said.

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


WSJ.COM WRAP: Enron, Dynegy Post Immpressive Results

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

A WSJ.COM News Roundup 
HOUSTON -(Dow Jones)- Electricity suppliers Enron Corp. (ENE) and Dynegy Inc. 
(DYN) posted strong first-quarter results as their wholesaling and trading 
businesses thrived in a market roiled by California's energy crisis.
Enron on Tuesday reported net income that rose 26% to $425 million, or 49 
cents a diluted share, compared with net income of $338 million, or 40 cents 
a share, a year earlier. 
Results in the latest quarter include a gain related to the required adoption 
of new accounting standards. Excluding the gain, the company earned $406 
million, or 47 cents a share, two cents better than the estimate from 
analysts surveyed by Thomson Financial/First Call. 
Revenue in the quarter surged to $50.13 billion from $13.15 billion a year 
earlier. 
The energy giant also boosted its earnings outlook for 2001 to $1.75 to $1.80 
a share. As recently as March 23, the company said it expected to earn $1.70 
to $1.75 a share. The current consensus estimate of analysts is $1.75 a share 
for 2001. 
"Enron's wholesale business continues to generate outstanding results. 
Transaction and volume growth are translating into increased profitability," 
Jeff Skilling, Enron's president and chief executive, said in a prepared 
statement. "In addition, our retail energy services and broadband 
intermediation activities are rapidly accelerating." 
The company's wholesale-services operations reported a 76% increase in income 
before interest, minority interests and taxes, or IBIT, to $755 million, led 
by growth in its natural-gas and power businesses. In addition, Enron's new 
wholesale commodity businesses, including coal, steel and forest products, 
contributed to the quarter's strong results. 
Enron's assets and investments unit posted a 73% drop in IBIT to $59 million 
because of lower earnings from merchant investments and related assets. 
Enron said IBIT at its retail energy services group surged to $40 million 
from $6 million a year earlier, amid a 60% increase in contracting in the 
period. The company said its new long-term energy-management customers 
include Owens-Illinois Inc., Quaker Oats Co., Eli Lilly & Co., J.C. Penney 
Co. and Saks Inc. 
The transportation-services unit reported IBIT that inched up 3.9% to $133 
million, amid strong demand for natural-gas pipeline services. Its Portland 
General Electric investor-owned utility posted a 43% drop in IBIT to $60 
million, which reflects higher power costs, reduced investment income and the 
effect of certain regulatory events. 
Enron's broadband-services operations reported a $35 million loss before 
interest, minority interests and taxes for the quarter. The company said it 
added 70 new broadband customers this quarter for a total of 120 customers. 
Unlike beleaguered utilities such as PG&E Corp.'s Pacific Gas & Electric Co. 
and Edison International's Southern California Edison Co., Enron's Portland 
General has benefited from the power crisis in California, where a botched 
utility-deregulation plan combined with general power shortages have driven 
average wholesale prices 10 times as high as a year ago. 
Before the energy crisis, Portland General locked in low prices and more 
power than it needed through long-term contracts. Then, by the third quarter 
of 2000, Portland General nearly tripled its revenue from selling excess 
power on the wholesale market. The higher revenue led to higher profits, 
which allowed the company to rescind a 17% rate increase that was to go into 
effect in January. 
Meanwhile, the inability to keep up with soaring electricity prices forced 
Pacific Gas to seek Chapter 11 bankruptcy protection earlier this month. 
Pacific Gas and Southern California Edison weren't allowed to fully pass on 
the high power costs to customers because, under deregulation, they agreed to 
assume the risk of fluctuating power prices. For the first two years of this 
arrangement, wholesale prices were so low that the utilities collected 
billions of dollars extra that they used to pay down old debts. 
But with skyrocketing wholesale costs, Pacific Gas and Edison accrued 
billions of dollars of power-purchase liabilities. By early this year, both 
had stopped paying many of their obligations to conserve cash. 
Dynegy's Net Income, Revenue More Than Double 
Dynegy, a big supplier of electrical energy to the California market, saw its 
first-quarter net income more than double amid a surge in revenue. 
The Houston-based company posted net income of $139.5 million, or 41 cents a 
diluted share, compared with net income of $69 million, or 23 cents a share, 
a year earlier. 
Excluding a $2 million gain from an accounting change, Dynegy earned $137.5 
million, or 41 cents a share, a penny better than the mean estimate from 
analysts surveyed by Thomson Financial/First Call. 
Revenue in the quarter more than doubled to $14.17 billion from $5.35 
billion. 
Dynegy's earnings a year earlier include a gain of $33.8 million from the 
sale of certain power-generation facilities, and a charge of $44.2 million 
for merger-related costs and the sale and impairment of certain liquids 
assets. Excluding the items, the company earned $79.4 million, or 26 cents a 
share, for the 2000 first quarter. 
The company's outstanding shares rose 16% to 337.7 million as of March 31 
from 291.9 million shares a year earlier. 
Dynegy attributed first-quarter growth to "nationwide asset optimization, 
increased customer origination and risk-management activities." The company 
said it benefited from strong industry fundamentals in both natural gas and 
power. It capitalized on a return to seasonal winter weather and the supply 
and demand imbalances affecting multiple energy commodities. 
Earlier this month, Dynegy raised its first-quarter earnings outlook to 40 
cents a share. At the time, analysts had expected the power supplier to earn 
31 cents a share. 
Dynegy's marketing and trading unit, which also runs power generators, turned 
in another strong performance, accounting for 73% of the company's net income 
for the quarter. The segment earned $100.3 million for the first quarter, 
nearly double the $50.3 million it posted a year earlier. 
The company said its marketing and trading operation benefited from seasonal 
winter weather across the U.S. and strong supply and demand fundamentals, 
which allowed for higher prices. Increased origination activity from Dynegy's 
European operations also contributed to the segment's positive results. 
Dynegy said generation operations at West Coast Power, its joint venture with 
NRG Energy Inc., Minneapolis, didn't make a "material contribution" during 
the quarter. But the venture reduced its prospective credit exposure in the 
California market through its agreement with the California Department of 
Water Resources to provide the state with up to 2,300 megawatts of energy 
through 2004. 
In February, Dynegy joined Reliant Energy Inc. and Mirant Corp. to form a 
creditors committee to explore options for getting paid for electricity sold 
to the California Independent System Operator and California's investor-owned 
utilities, amid frustration with the slow progress in California's attempts 
to solve the energy crisis.

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

04/17/2001
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."

AP Photo FX101 of April 16, AP Graphic POWER PLAYERS 

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



Energy Trading-Floor Gambits Perturb Power-Hungry US West

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

HOUSTON (AP)--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. (ENE), Reliant Energy Inc. (REI), 
Dynegy Inc. (DYN) and Duke Energy Corp. (DUK) represent ground zero in a 
power crisis threatening the quality of life in much of the western U.S. 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 (PCG), into bankruptcy and left No. 2 
Southern California Edison (EIX) 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% 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."

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



High demand for power behind Enron's increased earnings
By KRISTEN HAYS
Associated Press Writer

04/17/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

HOUSTON (AP) - High demand for electricity and natural gas helped Enron 
Corp.'s first-quarter net income surge more than 25 percent. The company also 
announced increased earnings expectations for 2001. 
Houston-based Enron, the world's top buyer and seller of natural gas and 
electricity, said Tuesday that it earned $425 million, or 49 cents per share, 
in the three months ended March 31, compared with $338 million, or 40 cents 
per share in the year-ago period.
This year's results include a $19 million, or 2 cents per share gain, due to 
the adoption of new accounting standards; excluding the item, Enron earned 
$406 million, or 47 cents per share. 
The result beat comparable expectations of analysts surveyed by Thomson 
Financial/First Call, who predicted earnings of 45 cents per share. 
First-quarter revenues nearly quadrupled to $50.1 billion, compared to 
revenues of $13.1 billion in the first three months of 2000. 
Enron also increased its 2001 overall earnings prediction to $1.75 to $1.80 
per share. Previously, the company said it expected 2001 earnings of $1.70 to 
$1.75 per share, and the consensus of analysts was for $1.74 per share. 
"Enron's wholesale business continues to generate outstanding results. 
Transaction and volume growth are translating into increased profitability," 
said Jeff Skilling, president and CEO of Enron. 
Carol Coale, an analyst with Prudential Securities Inc. in Houston, said 
Enron's earnings reports were no surprise because of increased demand for 
power and gas in power-strapped California and across the country. 
"Clearly the California energy crisis has raised the bar on those power and 
gas trading and marketing profits," she said. "Opportunities have existed 
outside California as well." 
Coale said volatile electricity prices have helped trading profits, and 
demand remains strong despite an economic slowdown. 
The company attributed the increase to continued growth in its wholesale 
energy-trading business, acceleration in its retail energy services and in 
its broadband Internet business. 
In its wholesale business, Enron resells power and gas to utilities and other 
large customers. That business accounted for 96 percent of its first-quarter 
revenues. 
Shares of Enron rose $1.29 to $60.73 in trading Tuesday on the New York Stock 
Exchange. 
--- 
On the Net: http://www.enron.com

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


Business
Enron CEO: Earnings Target Up By A Nickel
Rhonda Schaffler, Gregg Hymowitz

04/17/2001
CNNfn: Market Coverage - Morning
(c) Copyright Federal Document Clearing House. All Rights Reserved.

RHONDA SCHAFFLER, CNNfn ANCHOR, MARKET CALL: Markets are down. We`re going to 
talk about one stock moving higher, though. North America`s largest gas and 
electricity maker is bucking the current earnings trend. Enron (URL: 
http://.www.enron.com/) is raising its earnings forecast for this year by a 
nickel. The company also earned 47cents a share for its first quarter, 2 
pennies better than estimates and 7 cents better than the year ago. Revenues 
rose a healthy 282 percent. Jobs cuts and the end of its video on demand deal 
with Blockbuster (URL: http://www.blockbuster.com/) put pressure on the 
stock, which has fallen from $90, to significantly lower level right now, 
about $60 a share. 
Joining us from Houston with an inside look at Enron is the company`s CEO, 
Jeff Skilling.
Jeff, welcome back to "Market Call." 
JEFFREY SKILLING, CEO, ENRON CORP.: Thank you, Rhonda. Glad to be here. 
SCHAFFLER: Let`s talk about the revenue growth because it is rather 
impressive. You`re an old economy company with a new twist. Where was most of 
the revenue growth from? 
SKILLING: Well, surprisingly, it came from our natural gas and electricity 
business. 
SCHAFFLER: No, well that`s not surprising. It`s a key part of your business. 
As opposed to your broadband, do you mean? 
SKILLILNG: Well, just about 90 percent of our earnings- 
I`m going to pull this out of my ear because I`m getting some feedback on the 
earphone. Actually that`s working better now. 
About 90 percent, or 95 percent, of our revenues are in the natural gas and 
electricity business, so as long as that business is healthy, our business 
overall is healthy. 
GREGG HYMOWITZ, CNNfn GUEST HOST, MARKET CALL: Jeff, it`s Gregg Hymowitz. Can 
you discuss, as related to that business, the pricing of megawatt hours going 
forward, what we`ve seen it at. And also can you just touch upon fiber-optic 
bandwidth pricing lately? 
SKILLING: Sure-a tale of two cities. The electricity business is seeing very 
strong prices. In California, for example, probably a year and a half ago 
power sold for about $20 to $22 a megawatt hour. Right now in California, 
we`re probably closer to $550 a megawatt hour for the summer. And this is 
just because we have a short supply situation. There`s a lot of demand growth 
in California. We just haven`t built the power plants to serve it. 
Now, conversely in the fiber business, we`ve seen enormous capital 
investments over the last several years. Supply much exceeds demand and in 
that market prices have collapsed. In fact by our numbers, as you know, we`re 
in the process of creating a market for bandwidth, those prices are dropping 
in some cases by 30 percent a month. 
SCHAFFLER: Let`s talk about California for a moment. Pacific Gas & Electric 
(URL: http://www.pgecorp.com/) owes you some money. You`ve taken reserves 
against that. I`m wondering if you feel a need to increase reserves going 
forward or you`re comfortable with the situation as it is? 
SKILLING: We`re very comfortable. What we had said to investors, as long ago 
as December, was that we felt very comfortable with the $1.70 to $1.75 number 
for this year. As you mentioned, we`re raising that from $1.75 to $1.80. And 
we feel very comfortable with that number really regardless of what happens 
with the credit situation in California. 
HYMOWITZ: Jeff, getting back to that tale of two markets, discuss what could 
potentially happen to change the trend in both markets? 
SKILLING: Well, I think in the electricity market, we`ll have tight prices 
for another couple of years. It takes that long to get the construction cycle 
going. But once that construction cycle gets going it`s pretty easy to bring 
on capacity and prices will drop significantly. And probably the $30 to $40 
megawatt hour area in the next couple of years and I think that`s very 
possible. In fact, I think that`s probable. 
In the bandwidth market, very, very different situation. The problem, to 
date, is that we built what amounts to an interstate highway system for 
bandwidth, or for data, with no on ramps and no off ramps. We need to get 
this last-mile problem fixed, so that people can get data from these networks 
all the way out to end-use customers. Once that happens, we`ll see a lot of 
applications developed that use bandwidth. It will soak up some of that 
excess supply and we might see prices coming back. I think that`s a much 
longer term proposition. 
SKILLING: Jeff, we`ve heard so much about this last-mile for so many years 
now. I mean when is it going to actually happen? 
SKILLING: Well, it`s just been slower. You were just mentioning the earnings 
of Sprint FON (URL: http://www.sprint.com/) . Many telecom companies are 
working to put DSL cable systems on, that helped bridge the last-mile 
problem, but it`s come much slower than people expected. These are enormously 
capital intensive investments. They take a long time to put in. There are 
still technical issues with some of these solutions. So, I just think we have 
a little ways to go. It will take some more time. 
SCHAFFLER: You had incredible revenue growth, which we mentioned, up 282 
percent. Do you do anything different in this quarter? It`s always hard to 
top the last great act on Wall Street. 
SKILLING: The revenue numbers are not as important as our volume growth 
numbers. What really drives our profitability is growth in volume, physical 
volumes. They were up about 69 percent. Actual revenue numbers will be 
influenced by price changes. Price changes really don`t make that much of a 
difference for us. We don`t have any exposure to the commodity price cycle. 
So, what we look at is physical volumes transported through the system. And 
we`ve had just a tremendous track record for the last couple of years on 
volume. As I mentioned, this quarter up 69 percent in physical volumes. We 
think that`s a function of our market share position. And what amounts to a 
unique, logistics capability in North America and Europe. No one else can 
match it. 
SCHAFFLER: Jeffrey Skilling, we`ll leave it at that. Congratulations on the 
quarter. 
SKILLING: Thank you, Rhonda. 

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


Enron Corp. Says First-Quarter Profit Rose 20 Percent (Update6)
2001-04-17 16:04 (New York)

Enron Corp. Says First-Quarter Profit Rose 20 Percent (Update6)

      (Adds closing share price in eighth paragraph.)

     Houston, April 17 (Bloomberg) -- Enron Corp., the largest
energy-trading company, said first-quarter profit rose 20 percent
as increased electricity and natural-gas demand sent prices
surging in California and other parts of the U.S.
     Profit from operations rose to $406 million, or 47 cents a
share, from $338 million, or 40 cents, in the year-earlier period,
Enron Chief Executive Jeffrey Skilling said. Revenue almost
quadrupled to $50.1 billion from $13.1 billion.
     ``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.''
     Enron sold 90 percent more power and 32 percent more gas in
North America than in the year-earlier quarter as prices surged.
About one-fifth of the power-sales increase came from the western
U.S. as California electricity prices averaged nine times higher
than a year earlier. The rest came from the eastern U.S., which
also has had power shortages.
     The Houston-based company also raised its 2001 profit
forecast to $1.75 to $1.80 a share, from its January projection of
$1.70 to $1.75.
     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 possibly 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 total as much as
$170 billion this year, Skilling estimated in March.
     Enron shares rose 56 cents to $60. They had fallen 28 percent
this year on concerns about the company's telecommunications
business and an India power project.

                        California Business

     Electricity prices in California were higher in the first
quarter than a year earlier as a power shortage continued and
generators demanded higher payments to offset the risk of selling
to the state's utilities. Prices for gas, used to fuel power
plants, were more than double the year-earlier average.
     The higher prices have left California utilities more than
$14 billion in debt because regulators won't let them pass on all
the cost of power purchases on to consumers.
     Enron is owed $570 million by PG&E Corp.'s Pacific Gas &
Electric, Skilling said in an interview. Pacific Gas & Electric,
California's biggest utility, filed for Chapter 11 bankruptcy
protection April 6.
     Enron has set aside money to cover potential California
losses and doesn't expect the energy crisis to affect 2001
earnings, Skilling said. He wouldn't say how much was set aside.
Investors are entitled to know how much Enron has put in reserves,
analysts told Skilling on a conference call today. Skilling
disagreed.
     ``I think that would hurt our competitive position,
particularly when people are jostling for position in
bankruptcy,'' Skilling said.
     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.
     ``If you or I were running a factory around New York right
now, we'd be calling Enron or a company like them to lock in
energy prices,'' Credit Suisse First Boston analyst Curtis Launer
said. ``That business is going gangbusters.''
     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 facilities. It is the
largest manager of customer energy assets, Skilling said.

                         Energy Deregulation

     The company's Wholesale Energy Operations and Services
business, which includes trading and power-plant development, saw
first-quarter profit before interest, minority interests and taxes
rise 76 percent to $755 million from $429 million.
     In the first quarter, gas volumes more than tripled outside
North America and rose 55 percent worldwide. On the power side,
worldwide volumes more than doubled, while sales outside North
America more than quadrupled.
     Enron has gained customers through EnronOnline, its Internet
trading site. EnronOnline handled $162 billion in transactions in
the quarter, Skilling said. It has handled more than $525 billion
since it opened in late 1999.
     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.

                      Broadband Woes

     Shares of Enron fell 11 percent on March 12 after the
collapse of an agreement for Blockbuster Inc., the largest video-
store chain, to deliver movies on demand over Enron's fiber-optic
system. The stock continued to fall on speculation Enron would
exit the broadband business, analysts said. Enron denied the
speculation.
     Enron has been trying to get paid for power sold by its India
unit to the western Indian state of Maharashtra. Enron's
$3 billion, 740-megawatt project is the biggest foreign investment
in India.
     A first-quarter gain of $19 million, or 2 cents a share, for
an accounting change, made net income $425 million, or 49 cents a
share. There were no charges or gains in the year-earlier period.
     The company was expected to make 45 cents a share, the
average estimate of analysts polled by First Call/Thomson
Financial. Estimates ranged from 43 cents to 47 cents.




Dynegy's 1st-Qtr Profit Rises 73% on Gas, Power Sales (Update4)
2001-04-17 16:21 (New York)

Dynegy's 1st-Qtr Profit Rises 73% on Gas, Power Sales (Update4)

     (Adds company comment on future earnings and additional
generation capacity in the fifth paragraph, closes shares. For
more on California, see {EXTRA <GO>}.)

     Houston, April 17 (Bloomberg) -- Dynegy Inc., a U.S.
electricity and natural gas trader, said first-quarter profit rose
73 percent as colder winter weather boosted gas and power sales.
     Profit from operations rose to $137.5 million, or 41 cents a
share, from $79.4 million, or 26 cents, a year earlier, the
company said in a statement. Revenue more than doubled to $14.2
billion from $5.35 billion.
      Marketing and trading profit almost doubled to $100.3
million, or 73 percent of net income as the average price of gas
more than doubled from a year ago. Power sales to California, hit
by a 10-month electricity crisis, ``did not make a material
contribution'' to earnings, the statement said.
     ``It's not just a California ballgame,'' UBS Warburg analyst
James Yanello said. ``Lots of areas around the country have supply
and demand imbalances, and this is one of the big players capable
of resolving those supply and demand issues.''
     Company executives remain comfortable with their earlier
second-quarter earnings guidance of 35 cents a share, Chairman
Chuck Watson told analysts during a conference call. Next year's
earnings likewise should increase by up to 25 percent as Dynegy
continues to build or acquire power plants, he said.
     ``What's driving the train for Dynegy for the past few years
is the continued adding to our portfolio in generation across the
country, and I don't see that slowing down in 2002,'' Watson said.

                         California Reserves

     Dynegy has a reserve to cover money it might not get from
power sales to California, canceling out profit from the state,
spokesman Steve Stengel said.
     The company was owed $265 million from power sales to
California as of Feb. 28, a filing with the U.S. Securities and
Exchange Commission said.
     Dynegy, based in Houston, and joint venture partner NRG
Energy Inc. have sold 2,300 megawatts of power to the state's
Department of Water Resources through 2004. That has cut credit
risk from the state's cash-strapped utilities, the company said.
     California power prices rose ninefold last quarter from a
year ago. A megawatt is enough power to light about 1,000 U.s.
home.
     Shares of Dynegy rose $2.80 to close at $55.95. They are
almost unchanged for the year.

                             Northeast

     Dynegy's electricity sales and production rose 19 percent
last quarter to 26.1 million megawatt-hours from a year ago,
boosted by the addition of 1,100 megawatts of generation in the
2000 second half and the purchase last quarter of New York state
power plants that can produce 1,700 megawatts.
     ``Dynegy is in a good position to earn good returns from
those plants,'' analyst Anatol Feygin of J.P. Morgan Securities
Inc. said. ``The press is full of prognostications that the New
York area and the Northeast are the next California.''
     New York and New England won't have enough generators or
power lines to meet demand if temperatures are higher than normal
this summer, industry officials have said. Few were built in the
Northeast in recent years because of regulatory hurdles, even as
economic growth boosted electricity consumption.

                          Broadband Loss

     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 the processing and marketing of 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.
     The company was expected to earn 40 cents, based on the
average estimate of analysts surveyed by First Call/Thomson
Financial.
     A gain of $2.03 million in the quarter from an accounting
change made net income of $139.5 million, or 41 cents a share. A
year ago, a gain of $33.8 million from a power-plant sale and a
charge of $44.2 million made net income $69 million, or 23 cents.



Red Herring 100 Celebrates Top Companies Reshaping Business

04/17/2001
PR Newswire
(Copyright (c) 2001, PR Newswire)

Magazine Chooses 50 Private and 50 Public Companies That Continue to Reshape 
Markets Despite Current Economic Trends 
SAN FRANCISCO, April 17 /PRNewswire/ -- In the fifth annual Red Herring 100, 
editors of Red Herring, the leading magazine on the business of technology 
and innovation, identify the 100 companies whose products, services or 
business models - despite current economic uncertainties-continue to forge 
new markets. The leaders are profiled in Red Herring's May 1 double issue and 
are posted at http://www.rh100.redherring.com.
The Red Herring 100 stands apart because companies are not measured by 
statistics alone, but are also reviewed on the subjective and metrical 
criteria favored by venture capitalists and investment bankers, including: a 
company's potential for disrupting its market, its execution of a sound 
strategy, the quality of its management and its financial performance, which 
is summed up by "The Herring Take". 
The listing favors companies whose promise is based on innovative and 
defensible technology with more than a dozen sectors represented, including 
software, biotechnology and communications services. Major category shifts 
were recognized in this year's Red Herring 100 in sectors like data storage, 
enterprise software and semiconductors, while entire sectors that failed to 
remain innovative are gone: Linux companies, PC makers, wireless 
communications and commerce. 
Editor Jason Pontin explained that companies were chosen for the Red Herring 
100 based upon the magazine's belief in certain broad trends: continuing 
importance of IP telephony, critical advancements in energy production, the 
sudden glamour of biotechnology, and the utility of reconfigurable 
microchips. 
"In short, the Red Herring 100 are companies that retain the capacity to 
disrupt existing markets or create entirely new ones," Pontin exclaims. "As 
we shout on our cover, whatever the state of public and private equity 
markets, these companies still matter." The Red Herring 100 
50 Private Companies 50 Public Companies 
Accel Partners Akamai Technologies 
Accenture AOL Time Warner 
Aimster Applied Micro Circuits Corporation 
AirFiber Ballard Power Systems 
Altra Energy Technologies Charles Schwab 
Amber Networks Check Point Software Technologies 
Asera Ciena 
Bang Networks Cisco Systems 
Bertelsmann Citigroup 
Bowstreet Corning 
Centerpoint Broadband Technologies Credit Suisse Group 
Cereva Networks eBay 
Cytokinetics Electronic Arts 
eCredit.com Enron 
Excelergy EMC 
Foliofn Exodus Communications 
Genoa Flextronics 
ID Software Gemstar-TV Guide 
Intira Genentech 
Jamcracker Goldman Sachs 
Kleiner Perkins Caufield & Byers Homestore.com 
LaserComm i2 Technologies 
Layton BioScience IBM 
Matrix Partners Illumina 
Mellanox Technologies Immunex 
Metro-Optix JDS Uniphase 
NerveWire Juniper Networks 
Nishan Systems McLeodUSA 
PhotonEx Metromedia Fiber Network 
PurpleYogi Microsoft 
RealChip Communications Morgan Stanley Dean Witter 
Savi Technology Network Appliance 
Scale Eight Nortel Networks 
Science Applications International Corp. NTT DoCoMo 
SeeCommerce Oracle 
Sequoia Capital Palm 
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Enron Says PG&E Owes About $570 Million, CNBC Says (Update1)
2001-04-17 11:08 (New York)

Enron Says PG&E Owes About $570 Million, CNBC Says (Update1)

     (Adds earlier report in fifth paragraph.)

     Houston, April 17 (Bloomberg) -- Enron Corp. is owed about
$570 million in gross receivables by PG&E Corp., Enron President
and Chief Executive Jeffrey Skilling said in an interview with
financial news network CNBC.
     Enron, the largest energy trader, is fully reserved and has
some offsets against that amount, Skilling said. PG&E filed for
bankruptcy this month.
     ''It's not a good situation when a state allows a company
with a 100-year history to go bankrupt,'' Skilling said. ``It's
kind of surprising.''
     There is a big threat of politicizing the energy situation in
the West, Skilling said. Some proposals in various state
legislatures ``would be enough to make an economist cry,'' he
said.
     The Houston Chronicle reported the $570 million figure this
weekend, citing a letter from Enron to a bankruptcy trustee. Enron
refused to confirm the figure until today.