Thanks for the note.
Jim Hughes asked the same question you did.  Here is my (and John's) response.
----- Forwarded by Steven J Kean/NA/Enron on 03/09/2001 02:33 PM -----

	Steven J Kean
	03/07/2001 11:41 AM
		 
		 To: James A Hughes/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 cc: 
		 Subject: Re: Enron Mentions

It looks like we are playing a smaller role than the WSJ article indicates -- 
i.e. a role commensurate with our level of interest.  I have talked with John 
several times about the relative importance of OPIC, ExIm and other funding 
organizations in light of the change in emphasis in our business.  As a 
result of those discussions we cut headcount and expenditures from the 
proposed budget for "01 and John has joined Linda Robertson's organization in 
the DC office (instead of being a stand alone effort).  Having said that, my 
view (based on the work John has been doing) is that we continue to have a 
considerable amount of work for him to do on the project finance front as a 
result of existing projects, projects we continue to pursue, and transfer 
issues associated with the asset sales.  Do you agree?
----- Forwarded by Steven J Kean/NA/Enron on 03/07/2001 11:27 AM -----

	John Hardy@ENRON_DEVELOPMENT
	03/07/2001 10:59 AM
		
		 To: Steven J Kean/NA/Enron@ENRON
		 cc: 
		 Subject: Re: Enron Mentions

Steve
 This is not a battle to fight with OMB, but we have to show the agencies 
that we are supportive of  their programs and their budgets.  We are not 
going to lead the battle and in fact have not particpated in meetings on the 
hill.  But we are in negotiations with both EXIM and OPIC on Electrobolt and 
will need their support on our problem projects.  Also, Rebecca McDonald is 
on EXIM's private sector advisory committee.  If you need more lets talk.  
Thanks John  



	Steven J Kean@ENRON
	03/07/2001 11:43 AM
		 
		 To: John Hardy/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 cc: Linda Robertson/NA/Enron@ENRON
		 Subject: Enron Mentions

How important is this fight to us now (see attached article on ExIm)?
----- Forwarded by Steven J Kean/NA/Enron on 03/07/2001 10:41 AM -----

	Ann M Schmidt
	03/07/2001 08:19 AM
		 
		 To: Ann M Schmidt/Corp/Enron@ENRON
		 cc: (bcc: Steven J Kean/NA/Enron)
		 Subject: Enron Mentions

Exporters Rush to Ex-Im Bank's Defense --- Lobby Campaign to Prevent Budget 
Cuts Seeks Help Of 100,000 Small Firms
The Wall Street Journal, 03/07/01

Plots & Ploys
The Wall Street Journal, 03/07/01

Dutch Gas Competition Grows Despite Sluggish Reforms
Dow Jones Energy Service, 03/07/01

USA: Big U.S. exporters to fight Ex-Im Bank cuts - WSJ.
Reuters English News Service, 03/07/01

Major U.S. Exporters Rush to Export-Import Bank's Defense
Dow Jones Business News, 03/07/01

What's News
United States
The Globe and Mail, 03/07/01

Deal with state could take until 2002 to close
Associated Press Newswires, 03/06/01

Sierra Pacific CEO Doubts SEC OK Of Enron Unit Buy-Report
Dow Jones Energy Service, 03/06/01

Many Power Deals Announced by California Governor Still Not Final
Dow Jones Business News, 03/06/01

US Natural Gas Prices Fall As Demand Slips In Most Areas
Dow Jones Energy Service, 03/06/01



Economy
Exporters Rush to Ex-Im Bank's Defense --- Lobby Campaign to Prevent Budget 
Cuts Seeks Help Of 100,000 Small Firms
By Michael M. Phillips and Laura Heinauer
Staff Reporters of The Wall Street Journal

03/07/2001
The Wall Street Journal
A2
(Copyright (c) 2001, Dow Jones & Company, Inc.)

WASHINGTON -- Angry and confused that a Republican administration has 
targeted one of their favorite programs for big cuts, America's largest 
exporters are appealing for help from lawmakers. 
Boeing Co., Caterpillar Inc., Enron Corp., Halliburton Co. and others are 
launching an aggressive lobbying campaign on Capitol Hill to protect the 
Export-Import Bank from budget reductions; the White House labels the Ex-Im 
Bank as corporate welfare.
"The administration has fired its shot, and now we're firing ours," said 
Edmund B. Rice, president of the Coalition for Employment Through Exports, an 
industry group that is leading the effort. 
Since they got wind of the proposed cuts a few weeks ago, business lobbyists 
have been trying to rally sympathetic lawmakers. And executives at Boeing, 
Caterpillar and other big companies plan to contact some 100,000 smaller 
suppliers that benefit indirectly from the $12.6 billion of export loans, 
guarantees and insurance that Ex-Im Bank provided in the last fiscal year. 
Those small companies, the executives hope, will create a groundswell of 
support in Congress for the Ex-Im Bank. 
"Companies large and small who have similar interests here are banding 
together to provide an educational effort so people understand the impact of 
this," said Chris Hansen, Boeing senior vice president for government 
relations. 
Corporate lobbyists also have dug up a speech that Vice President Dick 
Cheney, while chief executive of Halliburton, gave in 1997 praising the bank 
and scoffing at those who consider it a giveaway to big business. They plan 
to pass Mr. Cheney's comments to influential members of Congress this week. 
"We'll be circulating them very broadly," Mr. Rice said. 
A spokeswoman for Mr. Cheney had no immediate comment. 
Ex-Im Bank officials aren't talking publicly, avoiding the appearance that 
they are battling the White House to overturn the proposed 25% cut in the 
bank's $865 million operating budget for the current fiscal year, which ends 
Sept. 30. But an Ex-Im official said the topic has come up in conversations 
between key lawmakers and Ex-Im Bank Chairman James A. Harmon, who is soon to 
be succeeded by Mel Sembler, a Bush campaign fund-raiser and a 
shopping-center developer. 
At first, business lobbyists assumed administration budgeteers were just 
looking for savings anywhere they could find it. Before President Bush 
released his spending plan last week, companies appealed to Mitchell Daniels, 
head of the White House budget office, in an attempt to keep the Ex-Im Bank 
cuts out of the final proposal. 
The Ex-Im Bank's corporate clients include some of the country's largest 
political contributors. Boeing, the bank's largest user, received $3.3 
billion of financing last year. The Seattle aerospace company and its 
employees contributed $1.8 million to politicians and parties during the 2000 
election cycle, 61% to Republicans, according to federal election data 
assembled by the Center for Responsive Politics. Caterpillar, a Peoria, Ill., 
maker of engines and heavy equipment that secured seven Ex-Im Bank deals last 
year, and its employees contributed more than $500,000 -- 96% to Republicans. 
Company officials deny they wanted to leverage donations to try to secure 
political support for the Ex-Im Bank. 
Many lobbyists have come to the conclusion that administration officials -- 
those of a libertarian persuasion -- oppose Ex-Im Bank as a form of welfare 
for corporations. Indeed, the White House budget plan criticized the bank's 
operations as unjustified public subsidies for companies. "That makes it a 
much more serious issue," Mr. Rice said. "We're concerned that the 
administration seems to be turning its attention in this direction." 
Barring intervention from Mr. Cheney, business groups now have largely given 
up hope of convincing the White House to back down, planning instead to use 
their muscle to convince Congress to restore the Ex-Im Bank's funding. Bank 
officials and U.S. companies argue that, far from being a subsidy, the bank 
simply allows American companies to compete with European and Japanese firms 
that receive assistance from their own governments. 
"In many markets in Asia and Africa, the bank is absolutely critical to our 
ability to sell American-made products," said Bill Lane, Caterpillar's 
Washington director for governmental affairs. 
--- Corporate Beneficiaries

Top 10 recipients of Ex-Im Bank loans, guarantees and insurance for
fiscal year 2000, as measured by amount of financing, in millions

Boeing $3,335
Bechtel Group $1,075
Distributed Processing Systems $388
Willbros Group $387
United Technologies $334
Raytheon $156
General Electric $150
Halliburton $136
Enron $135
LSI Logic $120

Source: Ex-Im Bank

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


The Property Report
Plots & Ploys
By Peter Grant

03/07/2001
The Wall Street Journal
B10
(Copyright (c) 2001, Dow Jones & Company, Inc.)

[What's Brewing in the Real Estate Market] 
No Problem, Houston 
CENTURY DEVELOPMENT is about to announce plans to break ground on downtown 
Houston's third major office development in less than three years. In another 
sign of the strength of the city's energy sector, Century is finalizing a 
headquarters deal with Reliant Resources Inc. to take more than two-thirds of 
the project's 850,000 square feet, says Edwin Murphy, a Century senior vice 
president. 
Two other towers also are underway. In 1999, Hines began building a 1.2 
million square-foot tower for Enron Corp. and late last year Crescent Real 
Estate Equities broke ground on a 27-story tower that will be anchored by 
Ernst & Young. These three projects are the first major downtown office 
projects to get underway since 1986. 
The surge is part of a renaissance of downtown Houston, where new sports 
facilities, hotels, apartment buildings and restaurants have been mushrooming 
in recent years. "The new amenities have kept people from leaving and enticed 
people to come back," says Michael Hassler, of CB Richard Ellis. 

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



Dutch Gas Competition Grows Despite Sluggish Reforms
By Germana Canzi
Of DOW JONES NEWSWIRES

03/07/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

LONDON -(Dow Jones)- The Netherlands is emerging as an important testing 
ground for E.U. gas liberalization, as new trading hubs for competitive, 
short-term gas supplies from the U.K. and Norway emerge on the Belgian and 
German borders. 
However, much remains to be done. A group of large energy users and traders 
is preparing to confront Gasunie Thursday in a hearing organized by the 
regulator. The main issues of contention are the balancing system, which 
Gasunie conducts on an hourly basis, the extent to which transport tariffs 
are cost-focused and third-party access to storage facilities.
The emergence of competition in the Dutch gas sector is mostly due to the 
initiative of new market entrants who, despite a difficult regulatory 
environment, have managed to develop a market for short-term gas virtually 
from scratch. 
If liquidity improves in these emerging hubs, the Netherlands could become an 
important transit country for freely tradeable gas supplies to other 
countries in northwest Europe, as well as being an important market in its 
own right. However, the difficulty of implementing transparent third-party 
access systems in the Netherlands and in neighboring Germany casts a dark 
cloud over recent progress in competition. 
Since December, Enron Europe Ltd. (U.ENE), Duke Energy Corp. (DUK), E.On AG 
(EON), RWE AG (G.RWE) and Electrabel SA (B.ELE) have been actively buying and 
selling gas, sourced in the U.K., the Netherlands and Norway, in a number of 
hubs between Emden in Germany and Emshaven and Oude Statenzijl in the 
Netherlands. 
David Gallagher, head of European gas trading at Enron in London, estimates 
that at least one trade a day of around 100,000 therms for a quarterly 
contract is done at the Oude Statenzijl hub, where the Gasunie pipeline 
system connects to the network of Wingas GmbH. 
An important element kick-starting short-term trading was the sale, in 
December 2000, of a 2 billion cubic meter a year Norwegian gas supply 
contract to five Dutch-based power generators. 
Robert van der Hoeven, head of fuel procurement at Electrabel, the owner of 
Dutch generator EPON, said his company uses most of the gas it imports from 
Norway for its plants in the Netherlands and trades the rest on a short-term 
basis in the Oude-Emden area. This pattern is common to the other Dutch-based 
parties to that contract. 
Trading in Dutch hubs received a further boost when Nederlandse Gasunie NV 
(N.NEG) decided, after months of wrangling with regulator DTe, to lower its 
transport tariffs by 6.5% from January 2001 and to unbundle its combined 
commodity and service tariff, the so-called CSS system, from July 2001. 
Gasunie now claims its pipeline system is fully open and transparent. To 
prove this, it says it has lost 30% of its customers in the eligible market, 
but that figure hasn't changed much since March 2000. Small wonder that 
critics say the switching figure doesn't necessarily indicate an ideal system 
of third-party access. 
According to energy consultants The Brattle Group, around half of the gas 
used by alternative suppliers goes through the 1 bcm/year Zebra pipeline from 
Zelzate to Zeeland, which was built by Dutch utilities a few years ago 
precisely because Gasunie refused to provide access on favorable terms. 
Shippers have complained that the hourly system used by Gasunie to balance 
the pipeline system raises the overall cost of shipping through its network 
significantly. Gasunie imposes a balancing charge which effectively forces 
shippers to pay for the extra gas brought into the system from storage sites, 
in addition to the capacity and transmission price. Critics say Gasunie has 
so far failed to unbundle these charges, although it agreed to do so in 
January. 
According to the Brattle Group, another controversial aspect of Gasunie's 
tariff system is that it is based on theoretical costs of constructing new 
pipelines rather than its actual costs. 
The DTe is also considering ways of reforming the storage system to make it 
competitive. BP PLC (U.BP) and Nederlandse Aardolie Maatschappij NV operate 
storage facilities and lease capacity to Gasunie through long-term contracts. 
The regulator is studying ways of allowing third parties access to storage 
facilities. Gasunie has so far shown little sign of negotiating more 
competitive tariffs with storage operators and passing on the benefits to 
customers, critics say. 
The growth of short-term trading in the Dutch gas market is also inevitably 
linked to its potential as a transit country for gas coming from the 
U.K.-Belgium gas interconnector and going towards the 82bcm-a-year German 
market. 
Market participants say liquidity at the Emden and Oude hubs has grown 
considerably since E.On and RWE started trading there earlier this year. 
However, the obstructive attitude of incumbents toward third-party access 
there has meant that so far most gas traded in the Netherlands has remained 
there. 
-By Germana Canzi, Dow Jones Newswires; +44 20 7842 9283; 
germana.canzi@dowjones.com

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


USA: Big U.S. exporters to fight Ex-Im Bank cuts - WSJ.

03/07/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW YORK, March 7 (Reuters) - America's largest exporters are launching an 
aggressive lobbying campaign on Capitol Hill to protect the Export-Import 
Bank from budget reductions, the Wall Street Journal reported in its online 
edition on Wednesday. 
The exporters, including Boeing Co. , Caterpillar Inc. , Enron Corp. , 
Halliburton Co. and others, are angry and confused that a Republican 
administration has targeted one of their favourite programmes for big cuts, 
the paper reported.
Ex-Im Bank officials were not talking publicly, avoiding the appearance that 
they are battling the White House to overturn the proposed 25 percent cut in 
the bank's $865 million operating budget for the current fiscal year, which 
ends Sept 30, it said. 
The White House labels the Ex-Im Bank as corporate welfare. 
"The administration has fired its shot, and now we're firing ours," Edmund 
Rice, president of the Coalition for Employment Through Exports, an industry 
group that is leading the effort, was quoted as saying by the paper. 
Executives at Boeing, Caterpillar and other big companies plan to contact 
some 100,000 smaller suppliers who benefit indirectly from the $12.6 billion 
of export loans, guarantees and insurance that Ex-Im Bank provided in the 
last fiscal year, the paper said. 
Those small companies, the executives hope, will create a groundswell of 
support in Congress for the Ex-Im Bank, it said. 
New York Newsroom (212) 859-1700.

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


Major U.S. Exporters Rush to Export-Import Bank's Defense

03/07/2001
Dow Jones Business News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

WASHINGTON -- Angry and confused that a Republican administration has 
targeted one of their favorite programs for big cuts, America's largest 
exporters are appealing for help from lawmakers, Wednesday's Wall Street 
Journal reported. 
Boeing Co. (BA), Caterpillar Inc. (CAT), Enron Corp. (ENE), Halliburton Co. 
(HAL) and others are launching an aggressive lobbying campaign on Capitol 
Hill to protect the Export-Import Bank from budget reductions; the White 
House labels the Ex-Im Bank as corporate welfare.
"The administration has fired its shot, and now we're firing ours," said 
Edmund B. Rice, president of the Coalition for Employment Through Exports, an 
industry group that is leading the effort. 
Since they got wind of the proposed cuts a few weeks ago, business lobbyists 
have been trying to rally sympathetic lawmakers. And executives at Boeing, 
Caterpillar and other big companies plan to contact some 100,000 smaller 
suppliers that benefit indirectly from the $12.6 billion of export loans, 
guarantees and insurance that Ex-Im Bank provided in the last fiscal year. 
Those small companies, the executives hope, will create a groundswell of 
support in Congress for the Ex-Im Bank. 
Corporate lobbyists also have dug up a speech that Vice President Dick 
Cheney, while chief executive of Halliburton, gave in 1997 praising the bank 
and scoffing at those who consider it a giveaway to big business. They plan 
to pass Mr. Cheney's comments to influential members of Congress this week. 
A spokeswoman for Mr. Cheney had no immediate comment. 
Ex-Im Bank officials aren't talking publicly, avoiding the appearance that 
they are battling the White House to overturn the proposed 25% cut in the 
bank's $865 million operating budget for the current fiscal year, which ends 
Sept. 30. But an Ex-Im official said the topic has come up in conversations 
between key lawmakers and Ex-Im Bank Chairman James A. Harmon, who is soon to 
be succeeded by Mel Sembler, a Bush campaign fund-raiser and a 
shopping-center developer. 
Copyright (c) 2001 Dow Jones & Company, Inc. 
All Rights Reserved.

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


Report on Business: The Wall Street Journal
What's News
United States
Wall Street Journal

03/07/2001
The Globe and Mail
Metro
B10
"All material Copyright (c) Bell Globemedia Publishing Inc. and its 
licensors. All rights reserved."

Boeing Co., Caterpillar Inc. and Enron Corp. are among the big U.S. exporters 
launching an aggressive lobbying campaign on Capitol Hill to protect the 
Export-Import Bank from budget reductions. The White House labels the Ex-Im 
Bank as corporate welfare. "The administration has fired its shot, and now 
we're firing ours," said Edmund Rice, president of the Coalition for 
Employment Through Exports, an industry group leading the campaign. Since 
they got wind of the proposed cuts a few weeks ago, business lobbyists have 
been trying to rally sympathetic U.S. law makers.

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


Deal with state could take until 2002 to close
By LESLIE GORNSTEIN
AP Business Writer

03/06/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

LOS ANGELES (AP) - A tentative deal aimed at rescuing Southern California 
Edison from insolvency might not close in time to prevent the utility from 
begging creditors for more patience, Edison officials said Tuesday. 
The utility's tentative, $2.7 billion agreement to sell its power lines to 
the state could take until 2002 to be consummated, thanks to complicated 
legal issues and other paperwork, an Edison official told bondholders Tuesday.
Once the deal is signed, Edison will try to borrow against the promised cash, 
but Edison International Chief Financial Officer Ted Craver admitted the 
utility might have to ask creditors to simply wait for their money until it 
has the $2.7 billion in hand. 
Energy suppliers owed money by Edison did not immediately return calls for 
comment Tuesday. 
At least four groups of suppliers have sued Edison for millions in unpaid 
bills going back months. Edison and fellow utility Pacific Gas & Electric 
have said they have lost $13 billion on the open power market thanks to 
soaring prices paired with state-imposed price caps. 
PG&E's parent company was able to recently borrow $1 billion to pay its 
stockholders and its debuts. It did not use any of that money to pay PG&E's 
bills. 
Edison's disclosure, meanwhile, shocked state officials. 
Steve Maviglio, spokesman for Gov. Gray Davis, initially declined to comment 
on the status of the Edison deal, but eventually said, regarding its closure, 
"We're optimistic it will be sooner rather than later." 
The pacing would have nothing to do with whether fellow utilities Sempra 
Energy and PG&E also sell their transmission lines to California, Craver 
said. 
Among the things that could delay the deal's closing is Edison's need to find 
landowners on whose property its lines were built to assure no legal 
agreements are being violated by the sale. Edison would also have to pin down 
exactly what it would be selling to the state - terms that might not be 
decided until after a deal has been inked, Craver said. 
"Trust me," Craver said in a phone call after the conference. "There are a 
lot of legal-type documents - stuff that you and I ... would think of as a 
bloody nightmare." 
The disclosure comes at a time when an increasing number of power suppliers 
are suing the utility for millions in unpaid bills. 
Edison also disclosed Tuesday that two more lawsuits had landed in its lap - 
one by a group of wind-powered generators including Enron Wind, the other by 
two suppliers including New York-based Caithness Energy. 
Both suits were filed during the past five days, Edison Assistant General 
Counsel Barbara Reeves said. It was not immediately clear how much the 
complainants were seeking; neither Enron nor Caithness returned calls for 
comment. 
The two filings bring the total number of suits by renewable-energy suppliers 
against Edison to four, the utility said. The city of Long Beach and 
CalEnergy Operating Group, a geothermal supplier, have also sued for back 
payments. 
CalEnergy alone has said it is owed $45 million in November and December 
payments. 
The line sale, part of a multifaceted, tentative deal with the state that 
could save Edison from insolvency, could take anywhere from several months 
into next year, Craver said. 
The tentative deal, announced by Gov. Gray Davis Feb. 23, calls for the state 
to pay more than twice the book value for Edison's lines. 
It also would require Edison to sell cheap power to the state for a decade 
and for Edison to end its lawsuit against state regulators. The suit asserts 
that price caps imposed by the California Public Utilities Commission are 
illegal under federal law. 
Additionally, Edison's parent would have to return $420 million it collected 
from the utility over the past several years. The money was used to pay debt, 
buy back stock and pay dividends to investors. 
SCE, PG&E and Sempra have complained they are near bankruptcy because of 
soaring prices on the open market combined with the state-imposed price caps 
for consumers. 
Sempra and PG&E have yet to announce similar line-sale deals with the state, 
though they and the governor have said negotiations are ongoing. The total 
cost of the 26,000 miles of lines has been estimated at $4.5 billion to $7 
billion.

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


Sierra Pacific CEO Doubts SEC OK Of Enron Unit Buy-Report

03/06/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

LOS ANGELES -(Dow Jones)- Sierra Pacific Resources (SRP) CEO Walter Higgins 
said in an interview last week that he doubts the company's $3.1 billion 
acquisition of Enron Corp.'s (ENE) utility Portland General Electric will be 
approved by the federal Securities and Exchange Commission, the Las Vegas Sun 
reported Tuesday. 
The SEC must find that Sierra Pacific is in a strong financial position 
before it will approve the deal, but the company is currently weakened by 
having lost millions of dollars in fuel and purchased power costs, Higgins 
said in the report.
A $311 million rate increase to cover those costs began March 1, but Higgins 
said that money would only pay back those expenses and wouldn't improve the 
company's stability to a level the SEC would find adequate, according to the 
report. 
The Public Utilities Commission can halt the rate hike and order refunds if 
it decides the hike isn't necessary. The PUC is holding hearings to determine 
the prudency of the hike, and members of the state's powerful casino and 
mining industries have filed to intervene. 
Sierra Pacific's plan to shore up its financial position through the sale of 
its 10 power plants, worth nearly $2 billion, may also be in jeopardy. The 
state Senate is considering a bill to block the sales, and Nevada Gov. Kenny 
Guinn recently sent a letter to the PUC asking that it reconsider its order 
allowing electric utilities to sell assets. 
Financial analysts have said that not allowing Sierra Pacific's two utilities 
to sell their assets would have a ripple effect on the company's financial 
position. The asset sales are tied to low-priced power contracts, and if the 
sales are canceled, the low-priced power will be gone as well. 
"If the divestiture is stopped...the state may be dealing with a much bigger 
rate increase," Steve Fleishman, Merrill Lynch utility analyst, told Dow 
Jones Newswires recently. 
Sierra Pacific is the parent company of electric utilities Sierra Pacific 
Power Co. and Nevada Power, which serve customers in the state's North and 
South, respectively. 
-By Jessica Berthold, Dow Jones Newswires; 323-658-3872, 
jessica.berthold@dowjones.com -0- 07/03/01 01-04G

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


Many Power Deals Announced by California Governor Still Not Final
By Jason Leopold

03/06/2001
Dow Jones Business News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Dow Jones Newswires 
LOS ANGELES -- Many of the long-term power-supply contracts announced by 
California Gov. Gray Davis this week remain under negotiation or are the 
subject of ongoing lawsuits, power suppliers said Tuesday.
The lack of finality to the deals raises questions about the state's success 
in covering its power needs, particularly going into what is expected to be 
an unusually tight summer. 
Generators said privately they were surprised the governor went ahead with 
his announcement Monday, given that many of the contracts haven't been 
signed. 
David Freeman, general manager of the Los Angeles Department of Water and 
Power, who negotiated the contracts on behalf of the state, conceded that 
details remain to be worked out. "This is not a done deal," Mr. Freeman said, 
adding that credit concerns are keeping generators from signing the deals. 
Gov. Davis announced Monday that California has secured 40 long-term 
contracts that will provide California with about 629 million megawatt hours 
of electricity over 10 years, at a price of more than $40 billion. A megawatt 
hour is roughly the amount of electricity needed to power 1,000 homes. 
Several of those forward deals, however, involve contracts originally held by 
Edison International (EIX) unit Southern California Edison and PG&E Corp. 
(PCG) unit Pacific Gas & Electric at the California Power Exchange, 
previously the state's main power market. 
The governor seized those contracts earlier this year, just before the Power 
Exchange liquidated them to cover hundreds of millions of dollars in power 
bills the utilities had failed to pay. 
The contracts, which total about 1.3 million megawatt hours of electricity 
and have a market value of about $1 billion, according to market sources, 
have yet to be paid for or signed over to the state. Duke Energy Corp. (DUK), 
one of the suppliers that sold the contracts to Pacific Gas and SoCal Ed, has 
sued Gov. Davis for unlawfully commandeering those contracts. 
Although Duke has reached an interim settlement to continue providing power 
to the state Department of Water Resources until April 30, the company and 
the Davis administration still have to "develop a comprehensive long-term 
settlement to pay for the power supply contracts," said Duke spokesman Tom 
Williams. 
The governor went ahead with the announcement, because the California 
Department of Water Resources believes it will be able to finalize and sign 
the contracts over the next several weeks, Davis spokesman Steve Maviglio 
said. 
Separately, several suppliers named in the governor's announcement Monday -- 
including Duke, Reliant Energy Inc. (REI), Mirant Corp. (MIR), Sempra Energy, 
Enron Corp. (ENE) and Avista Corp. (AVA) -- said they have yet to sign final 
agreements with the state, although negotiations were ongoing. 
"We are working in good faith with the DWR toward a long-term contract," said 
Art Larson, spokesman for Sempra Energy Resources, a unit of Sempra. Mr. 
Larson said Sempra signed a terms of agreement with the water-resources 
department and expects to reach a final agreement over the next several 
weeks. 
Reliant said it has only signed a short-term contract with the state that 
expires in about two weeks. The company will only sign a long-term contract 
once it's paid more than $400 million owed by Pacific Gas and SoCal Ed, 
spokesman Richard Wheatley said. 
Mirant said it also won't sign contracts with the state until it's paid. 
Enron said it's reached agreement on terms with the state, but has some 
credit-related details to hammer out. "Everything's been agreed to except for 
some credit technicalities," Enron spokesman Mark Palmer said. 
Meanwhile, small, independent power plants in California that are capable of 
generating 1,800 megawatts of power are shut down because their owners 
haven't been paid by the state's two main utilities, the California 
Independent System Operator said Tuesday. 
The decline in small-plant output has contributed to the state's power-supply 
problems the past two months. Partnerships involving El Paso Corp. (EPG), for 
example, shut down 350 megawatts of generation last weekend due to 
nonpayment, the company said Tuesday. 
SoCal Ed hasn't paid the owners of the smaller generators, known as 
"qualifying facilities," since early December, which means the generators are 
still owed for electric production in October, while PG&E has paid only a 
small percentage of its qualifying facility bills since its last full payment 
in early January. 
The plants, one-third of which are powered by renewable sources like wind and 
solar power, meet almost 30% of California's electricity needs. Almost all of 
the closed generators are fueled by natural gas, and many haven't been able 
to pay their gas suppliers and have been cut off from their gas supply. 
The California Senate Energy Committee plans to vote on legislation to create 
a new pricing system for all qualifying facilities this week. The proposed 
bill would cut the prices to qualifying facilities from about 17 cents a 
kilowatt-hour the past eight months to about eight cents, depending on the 
price of five-year natural-gas contracts the generators can sign. The plants 
that run on renewable resources would be paid 5.4 cents a kilowatt-hour. 
-- Mark Golden contributed to this article. 
Write to Jason Leopold at jason.leopold@dowjones.com 
Copyright (c) 2001 Dow Jones & Company, Inc. 
All Rights Reserved

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


US Natural Gas Prices Fall As Demand Slips In Most Areas

03/06/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

HOUSTON -(Dow Jones)- U.S. natural gas physical prices fell Tuesday as demand 
eased, except in the Northeast and Southeast areas of the country, traders 
said. 
Heavy snowstorms in the upper Northeast supported some pricing, as did cooler 
weather in Georgia, the Carolinas and the Florida panhandle.
Some storage buying occurred in Texas "if they could make it work," a trader 
said. 
"It was a pretty uneventful day," a Gulf Coast trader said late Tuesday. 
Also, because of the snowstorm in the Northeast, traders had purchased gas 
ahead of time to make up for needed load, he said. 
A scheduled work outage on Enron's Transwestern San Juan lateral in New 
Mexico was completed, and the return of a power plant in California 
alleviated demand in the West, traders said. 
At the Arizona-California border hub, buyers paid around $13-$33 a million 
British thermal units, West Coast traders said, down as much as $15 from 
Monday. 
At PG&E Citygate, prices were mixed, with buyers paying $9.75-$10.65/MMBtu, 
down 25 cents on the bid, up 15 cents on the offer. 
In the Midwest, Chicago Citygate prices fell 7 cents-8 cents to a range of 
$5.42-$5.53/MMBtu. Alliance Pipeline into Chicago traded around 
$5.47-$5.52/MMBtu, down 4 cents to 9 cents from Monday. 
The Nymex April natural gas futures contract settled at $5.315/MMBtu, down 
2.1 cents in a tight, range-bound, uneventful session that started late due 
to bad weather. 
Physical gas prices at the benchmark Henry Hub in south Louisiana ended in a 
range of $5.25-$5.30/MMBtu, down 2 cents-6 cents from Monday. 
Transcontinental Gas Pipe Line at Station 65 deals were made in a similar 
range of $5.26-$5.35/MMBtu, down 2 cents on the bid, unchanged on the offer. 
At Katy in East Texas, buyers paid $5.21-$5.30/MMBtu, down 5 cents-6 cents. 
At Waha, prices fell 9 cents-12 cents to a range of $5.15-$5.30/MMBtu. 
-By John Edmiston, Dow Jones Newswires; 713-547-9209; 
john.edmiston@dowjones.com

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