----- Forwarded by Mika Watanabe/AP/Enron on 05/16/2001 10:34 AM -----

	Mika Watanabe
	05/16/2001 10:29 AM
		 
		 To: Enron Japan, Steven J Kean/HOU/EES@EES
		 cc: Jackie Gentle/LON/ECT@ECT, Eva Hoeffelman/LON/ECT@ECT
		 Subject: English-language Media Coverage of Enron-Brattle Paper/Conference




Enron urges more electric power reform



05/16/2001 
The Yomiuri Shimbun / Daily Yomiuri



Copyright (C) 2001 The Yomiuri Shimbun; Source: World Reporter (TM) - Asia 
Intelligence Wire
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Enron Japan Corp., a Japanese subsidiary of United States energy giant Enron 
Corp., published a reform proposal for the Japanese electricity market 
Tuesday. 
The proposal urged the government to implement the suggested reforms over a 
two-year period beginning at the start of 2002, following deregulation of the 
Japanese retail electric power market, which began in March this year. 
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Japan has allowed nonutility companies to supply power to industrial and 
commercial users since March. 
Enron is seeking to enter the Japanese energy market on a large-scale basis 
following the deregulation efforts. 
In the reform proposal, Enron Japan argued that the present liberalization of 
the electricity market was insufficient by presenting original data showing 
that Japanese electricity charges were 46 percent higher than average when 
compared with those of other member countries in the Organization of Economic 
Cooperation and Development. 
Enron's reform proposal includes 10 measures to promote competitiveness in 
the Japanese market, such as a separation of conventional power companies' 
supply operations from the generation, transmission and distribution of 
electricity. 
The proposal also contends that conventional power companies are monopolies 
that should be prohibited from constructing new electricity-generating 
facilities within the areas they currently supply. It also urges the 
privatizing of operations for the development of power sources. These measure 
are meant to make it easier for those newly entering the business to gain a 
competitive foothold. 
In March Enron applied for approval from Aomori Prefecture to build a large 
thermal power plant in Rokkashomura. 
Copyright 2001 The Daily Yomiuri






Enron Urges Reforms In Japan Electricity Market-Nikkei


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05/15/2001 
Dow Jones International News



(Copyright (c) 2001, Dow Jones & Company, Inc.)
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TOKYO (Nikkei)--Asserting that cuts in electricity prices will help Japanese 
companies save as much as Y4 trillion, major U.S. energy firm Enron Corp. 
(ENE) on Tuesday urged Japanese power firms to revamp the electricity market 
by separating operations such as power generation, transmission and 
distribution, The Nihon Keizai Shimbun reported. 
Enron's 10-point proposal also calls for the construction of more power 
plants and full-scale deregulation of retail electricity, including sales to 
households. If such measures are carried out and electricity prices fall to 
match the levels of other industrialized nations, Japan's industrial sector 
could trim its costs by Y4 trillion, Enron said. 
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At a seminar on power industry deregulation hosted by Enron, the company 
asserted that Japan's deregulation in such areas as wholesale electricity 
auctions in 1996 and bulk retail sales last year has not brought significant 
benefits to end-users. 
New suppliers entering the market only account for a combined 0.4% of the 
entire electricity sector, Enron said, criticizing the fact that power plant 
facilities are mainly concentrated among electric power companies. 
Regarding prices, an official representing operators of power generation 
facilities asserted that "industrial-use electricity prices in Japan are 
stuck at a high level at around Y13 per kilowatt, compared with Y5 in the 
U.S., Y3 in Canada, Y9 in Germany and Y4-Y8 in Southeast Asia." 
In fact, department store operator Takashimaya Co. (8233 or J.TKA), which 
last November switched to new market entrants for part of its electricity 
supply, was able to cut costs by Y450 million in the first year, said a 
company official. 
Enron hopes to generate competition by urging Japanese electric utilities to 
spin off different operations, analysts say. If the number of power 
generation facility operators increases, this will help bolster Japan's 
electricity trading market, an area in which Enron has a strong business 
interest. 
Splitting electricity operations into generation, transmission and 
distribution is expected to open the electric utility network to new 
entrants. This will boost transparency in the fees that electric power 
companies charge for transmitting power on behalf of the operators of power 
generation facilities, Enron says. 
Citing the power shortage in California, however, Japan's electricity sector 
has strongly opposed such spin-offs, stating that generation and distribution 
must be part of a single continuum to ensure a stable supply.






Japan could cut 4 tril. yen a year in energy costs - Enron.


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05/15/2001 
Kyodo News



Copyright Kyodo News International Inc. 2001
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Japanese industries could save 4 trillion yen a year in energy costs if 
electricity charges were lowered to European and U.S. levels, a senior 
executive of U.S. energy firm Enron Corp. said Tuesday. 
At a business gathering in Tokyo, Steven Kean, an executive vice president of 
Enron, said electricity charges are still rising in Japan despite progress in 
cost reductions in Europe and the U.S. 
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Japan needs to remove regulations on power transmission lines and let users 
choose suppliers freely, he said. 
Establishing an independent supervising body for the industry and mapping out 
transparent rules for information disclosure are also necessary, he said. 
Enron is seeking to enter the Japanese energy market on a full-fledged basis 
following Japan's deregulation in March of its retail electric power market. 
In March, it applied for approval from Aomori Prefecture, northern Japan, for 
a plan to build a large thermal power plant in the village of Rokkasho.






JAPAN: Enron says high power rates costing Japan.


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05/15/2001 
Reuters English News Service



(C) Reuters Limited 2001.
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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. 
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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.






Japan Must Speed Up Pwr Sector Dereg To Lower Rates-Indus


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05/15/2001 
Dow Jones Energy Service



(Copyright (c) 2001, Dow Jones & Company, Inc.)
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TOKYO -(Dow Jones)- Japan should accelerate the ongoing electric power sector 
deregulation to fully liberalize the retail market, in order to bring down 
the country's high power rates while ensuring stable power supply, experts 
said at an industry seminar Tuesday. 
The pressure is mounting for Japan's 10 power utilities, which have long 
enjoyed regional monopolies until a year ago, to become cost- effective and 
performance-conscious after the government partially liberalized the retail 
power market in March 2000. 
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However, the current scheme has so far failed to lure a large number of 
potential entrants because of the high transmission fees they must pay to 
conventional power companies. 
"What happened in overseas (power industries) suggest that the liberalization 
in Japan wouldn't only lower power rates but would also contribute to stable 
power supply significantly," said Tatsuo Hatta, professor of economics at the 
University of Tokyo. 
Compared with the U.S., Japanese electricity charges are typically twice as 
much for households and three times higher for industrial users. 
"There is a large discrepancy (in rates), and that is why we should hurriedly 
implement the liberalization," Hatta said. 
He said Japan's steep seasonal peak-load curve - one of the reasons the power 
companies cite as the cause of high power rates in Japan - can be altered 
once the prices are liberalized. "If power rates are set higher during those 
peak hours following the liberalization, users would refrain from using 
electricity." 
Steven Kean, executive vice president of the U.S. energy major, Enron Corp. 
(ENE), told the same seminar that Japan's power costs remain on the upward 
trend despite cost reductions in Europe and the U.S. 
He said Japan could achieve a cost-saving of Y4 trillion a year if its power 
prices fall to levels in Organization for Economic Cooperation and 
Development countries following the liberalization. 
Hatta and Kean were speaking at the seminar called "Reassessing Power 
Deregulation," which was co-sponsored by the Houston-based Enron. 
      

  Hatta of the University of Tokyo said "it's very wise" that Japan has begun
the deregulation with the "bilateral supply, or trade" system under which
suppliers and users clinch deals directly.    

  Under the current reforms, the sector for high-volume, large-lot industrial
and commercial users - which represents only 30% of the Y15 trillion market -
is opened to free competition. The government is to review the partial
deregulation by 2003 for further deregulation.   

  Japan should then introduce spot electricity trading such as futures and
derivatives to alleviate risks of complicated price volatility for power
providers, Hatta said.    

  Hatta and other experts attending the seminar said further deregulation
should destroy the systems that have supported the country's high power rates
- regional monopolies and the fair rate return method, under which all costs
are levied on prices.    

  "There is absolutely no need to set the same (power) prices" nationwide,
Hatta said. Power companies should make the opaque transmission fees
transparent and set them accordingly with regional demand, he said.    

  Yoshinori Omuro, vice president of Takashimaya Co.'s (J.TKA or 8233)
management department, acknowledged the slow progress of the deregulation.    

  Takashimaya, a major department store operator, has shifted to Diamond Power
Corp., a wholly-owned subsidiary of Mitsubishi Corp. (J.MIB or 8058) as its
power supplier at two of its 18 stores, with "strong back-up" from the
Ministry of Economy, Trade and Industry.    

  "Despite the deregulation, the situation isn't where we can negotiate with
power utilities to reduce (electricity costs). We have no choice but select
independent power providers," Omuro said.    

  -By Maki Aoto, Dow Jones Newswires; 813-5255-2929; maki.aoto@dowjones.com