California and the West Panel OKs Bills on State Purchase of Power Grid Energy
Los Angeles Times, 02/14/2001

California Legislature's Power Advisers Exert an Interest in Outcome
Knight-Ridder, 02/14/2001

NewPower posts quarterly loss 
Reuters, 02/14/2001

GERMANY: INTERVIEW-Enron lauds Germany's open power market resolve.
Reuters English News Service, 02/14/2001

GERMANY: German gas market regulation inevitable-Aquila.
Reuters English News Service, 02/14/2001

UK: Goldman, Morgan Stanley top energy derivative trade.
Reuters English News Service, 02/14/2001

Italy's ENI signs MoU to build power plant in Nigeria 
Agence France-Presse, 02/14/2001

Qatar, UAE Dolphin Gas Proj Deal Expected In Mar - Enron
Dow Jones Energy Service, 02/14/2001

Dallas-Based Blockbuster's Net Loss Widens in Quarter
Knight-Ridder, 02/14/2001

DEMAND A DEAL Blockbuster pacts for PPV, VOD rights to U pix
Daily Variety, 02/14/2001
 
Mirant of US plans power plant bid.
Business Times (Singapore), 02/14/2001
 
FEDERAL POWER MIN GIVES PRESENTATION TO INDIAN CABINET
Asia Pulse, 02/14/2001
 
ASIA-PACIFIC: No let-up for Indian electricity 
Financial Times, 02/14/2001

Cabinet okays Navy land transfer to Andamans
The Times of India, 02/14/2001
 
Equity dilution, not divestment in Maruti
The Times of India, 02/14/2001

Power reforms and regulations
Business Standard, 02/14/2001
 
DPC not to invoke central guarantee
Business Standard, 02/14/2001

Enron saga: Powered by govt generosity
The Times of India, 02/14/2001

Centre signs power sector reforms MoU with Haryana
Business Standard, 02/14/2001

India: Enron review panel to begin sittings today
The Hindu, 02/14/2001

Macerich Announces Year-End Results
PR Newswire, 02/14/2001

Racing friend of the Queen to be US ambassador
The Daily Telegraph, 02/14/2001
 
USA: INTERVIEW - Enron business model almost limitless-Skilling.
Reuters English News Service, 02/13/2001

Contracts save electricity costs, but college natural gas bills soar
Associated Press Newswires, 02/13/2001

Edison Says Banks Mulling Request to Delay Remedies (Update1)
Bloomberg News, 02/13/2001

Acegas listed on February 28 and aims for telecoms market 
Il Sole 24 Ore - Italy, 02/13/2001

------------------------------------------------------------------------------
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Metro Desk
California and the West Panel OKs Bills on State Purchase of Power Grid 
Energy: Senate measures would authorize takeover of transmission lines and 
construction of generating plants. Backers say the plan is not a bailout of 
utilities.
CARL INGRAM MITCHELL LANDSBERG; JENIFER WARREN
TIMES STAFF WRITERS

02/14/2001
Los Angeles Times 
Home Edition
A-3
Copyright 2001 / The Times Mirror Company 

SACRAMENTO -- Nudging government toward an expanded role in the energy 
business, a Senate committee Tuesday approved two far-reaching bills paving 
the way for the state to buy California's sprawling electrical transmission 
grid and build and operate its own power plants. 

The legislation aims to protect California from the crisis it faces today, a 
nightmare of supply shortages and sky-high power prices, said the bills' 
author, Senate leader John L. Burton (D-San Francisco).

"What we're trying to do here is give the state some influence and control 
over its own destiny," Burton said. "The idea is to provide affordable, 
reliable energy at times we need it most." 

One of the bills authorizes Gov. Gray Davis to negotiate with California's 
beleaguered utilities about a state takeover of the transmission system, a 
transaction that could help them avoid bankruptcy. By paying anywhere from $3 
billion to $9 billion for the 32,000 miles of electric wires, the state would 
provide the utilities with cash to help relieve their mushrooming debt. 

"Some would call it a bailout," Burton said. "I would prefer to call it an 
infusion of capital." 

Davis prefers the term buyout and said any state takeover of the grid "should 
be a moneymaker." Talking with reporters after a speech in Los Angeles, Davis 
said he hopes to announce a proposal Friday under which the state would 
receive the transmission system, a financial stake in the utility companies 
and some other asset--possibly some of the utilities' hydroelectric 
facilities--in exchange for billions of dollars in state cash. 

"We will insist upon receiving commensurate, equivalent value for any value 
we confer on the utilities," Davis said. 

The governor added that the utilities' parent companies--which have received, 
among other assets, billions of dollars in tax overpayments from Southern 
California Edison and Pacific Gas & Electric--should help bring the utilities 
back to fiscal health. 

Tuesday marked the 29th straight day in which California endured a Stage 3 
power alert, with energy reserves critically low on the grid serving most of 
of the state. Grid operators came closer than usual to triggering rotating 
blackouts, but by the evening hours of peak demand, officials at the 
California Independent System Operator were optimistic that conservation and 
power purchases would help them dodge outages. 

Cal-ISO spokesman Patrick Dorinson blamed the power shortfall on a cold snap 
that boosted electricity consumption and on the shutdown of power plants 
capable of generating one-third of the state's winter peak demand. 

Four years after electric utilities were partially deregulated in California, 
the state is caught in a tangle of skyrocketing energy prices, booming demand 
and short supplies. Battered by debt, the state's largest investor-owned 
utilities lack the cash and credit to buy power themselves, forcing the state 
to step into the electricity market. 

For more than three weeks, the state Department of Water Resources has spent 
an average of $45 million a day purchasing power, as negotiators work to nail 
down long-term power contracts under a $10-billion program authorized by the 
Legislature. 

Davis maintains that in recent weeks the state has made major progress toward 
solving the electricity crisis. Officials have signed four "very good 
contracts" with electricity providers, begun an $800-million conservation 
program and embarked upon an aggressive drive to get power plants built, he 
said. 

In other developments Tuesday, the precarious financial condition of Edison 
and PG&E remained a top concern of utility-watchers as a grace period granted 
by banks that are owed money by Edison expired. 

"We are now on a daily involuntary-bankruptcy filing watch," said Steven 
Fleishman, a utility analyst with Merrill Lynch & Co. "We believe that 
creditors will wait to see what plan the [governor] proposes, but time is 
short." 

Edison formally asked a group of 23 banks for an extension of a 30-day period 
of forbearance on a $230-million default, Ted Craver, Edison International's 
chief financial officer, said in a conference call with debt holders. The 
banks had not yet responded, he said. 

Several electricity generators have said they are willing to wait for the 
utility debt-relief plan that Davis and legislators have promised in the 
coming days, the governor's spokesman, Steve Maviglio, said Tuesday. "They 
have signaled to us that they have patience," he said. 

Most of the action in the Capitol on Tuesday centered on Burton's two bills, 
both of which cleared the Senate Energy Committee and will go next to the 
Appropriations Committee. A third measure, SB 5X by Sen. Byron Sher 
(D-Stanford), which would provide $1.2 billion in taxpayer subsidies to 
consumers, government entities and businesses to help pay for conservation 
measures, also passed. 

Burton said his bill paving the way for the purchase of the transmission 
grid, SB 33X, is based on the concept of "willing buyer, willing seller" and 
would not lead to any unilateral seizure of utility assets. 

Although it attracted support from consumer groups, skeptics say that the 
system is overburdened and needs an estimated $1 billion in repairs and 
expansion--and that it costs several million dollars annually to maintain. 

As lawmakers debated the bill, a private company quietly pressed its own bid 
to buy the system. 

Trans-Elect Inc. has offered to pay $5.25 billion for the grid. Company Vice 
President Bob Mitchell was in the Capitol to pitch the idea to lawmakers, 
most of whom are indifferent to the notion. 

"We're not convinced that a single, for-profit, monopoly owner of the grid 
gains the people a lot," said Assemblyman Bill Leonard, (R-San Bernardino). 

But others said they were open to proposal: "We certainly prefer to keep the 
transmission grid in the private sector where it belongs," said Jamie Fisfis, 
spokesman for Republican Assembly leader Bill Campbell (R-Villa Park). 

The other Burton bill approved Tuesday, SB 6X, seeks to create a California 
consumer power and conservation financing authority that would build, finance 
and run power plants alone or in partnership with private generators. 

The new agency would be financed by the sale of up to $5 billion in bonds, 
which would be repaid by revenues from power sales. The bill also would 
empower the state to take over private plants by condemnation. 

Several other states, including New York, operate public generation and 
transmission facilities, Burton said, adding that they provide electricity at 
favorable rates. 

Burton insisted that the agency would "supplement" but not take over the 
electricity business that traditionally has been a private-sector enterprise 
in California. He predicted that the state would involve itself mostly in 
"peaking" generators--portable generators about the size of big-rig 
trucks--whose energy would be tapped during periods of short supply but high 
demand, such as hot summers and cold winters. 

But GOP Sens. Charles Poochigian of Fresno and William Morrow of Oceanside 
voiced fears that the public energy agency would be too dominant and could 
disadvantage private generators with its power of condemnation. 

"This bill is pretty much sending a large, bright red flag," Morrow told 
Burton. 

Lobbyists for the power generators, testifying before the committee, agreed 
that a public power authority could scare off private investors reluctant to 
compete with the state. 

"That type of uncertainty, about the state's role in this system . . . can 
have the role of discouraging private capital," said Mike Day, a lobbyist for 
Enron Corp. 

In another development Tuesday, state officials working to fire up new power 
plants to add 5,000 megawatts of electricity by this summer raised the 
possibility that the new generators might not be adequate to meet demand. 

Winston Hicox, director of the California Environmental Protection Agency, 
said the gap between supply and demand could be greater than 5,000 megawatts 
this summer, given that other Western states probably won't be sending as 
much electricity to California, and that the state's own production of 
hydroelectric power might be low. 

Calling conservation steps "incredibly important," Hicox said the state needs 
to cut use by at least 7% to avoid blackouts. 

Meanwhile, the California Republican Party said it will begin airing a second 
radio ad today blasting Davis, a Democrat, for his handling of the energy 
crisis. Unlike the first ad, which ran in smaller markets on conservative 
radio stations, the new ad will run in Los Angeles and San Francisco on 
mainstream stations, said a party spokesman. 

On the federal level, President Bush said Tuesday that he intends to discuss 
California's power needs and other energy policy issues in his talks Friday 
with President Vicente Fox of Mexico. 

They will talk "about improving the power plants to be able to help 
additional power get into the Western grid," Bush told reporters aboard Air 
Force One on a flight back to Washington after visiting the Norfolk, Va., 
Naval Base. 

Bush said he also intends to discuss the flow of natural gas between the two 
countries, specifically the issue of California natural gas flowing to 
Mexican power plants. 

"It's conceivable that that gas will be interrupted, and it will create, 
obviously, a problem for our neighbors to the south," Bush said. "But gas can 
flow both ways. And any gas down in Mexico that improves the Mexican 
situation will help America." 
* 
Ingram and Warren reported from Sacramento and Landsberg from Los Angeles. 
Times staff writers Miguel Bustillo, Dan Morain, Rone Tempest and Nancy Vogel 
contributed from Sacramento. Nancy Rivera Brooks contributed from Los Angeles 
and James Gerstenzang from Washington. 


California Legislature's Power Advisers Exert an Interest in Outcome

02/14/2001
KRTBN Knight-Ridder Tribune Business News: The Orange County Register - 
California 
Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World 
Reporter (TM) 

Gov. Gray Davis and top lawmakers have enlisted a small circle of energy 
insiders to help craft electricity bills and policies that could indirectly 
affect their financial interests. 

Key parts of the $10 billion financial plan that launched the state into the 
power buying business were written by investment bankers for Credit Suisse 
First Boston, which also works for a Texas power generator.

Other advisers include a former Southern California Edison executive who 
owned stock in three independent power companies while advising the governor. 
A third is a New York banker whose company prepared the sale of $1.4 billion 
in securities last week for two power generators who sell electricity in 
California. These power companies earned record profits last year selling 
electricity into California's troubled market. State utilities were pushed to 
the brink of insolvency by power prices because their billing rates were 
still frozen by 1996 rules that deregulated the market. Now some lawmakers, 
consumer advocates and legal scholars worry that the businessmen who have 
come to Sacramento to help sort out the mess are too closely tied to these 
same power companies, and won't be able to place the interests of the state 
and its small electricity users first. 

"They've let the fox into the hen house," said Peter Navarro, a University of 
California, Irvine business professor and author of "The Dimming of America" 
which predicted a national deregulation fallout. "The (deregulation) bill was 
drafted in large part by utility lobbyists. If we've learned anything from 
this it should be that people with a vested interest shouldn't draft 
legislation." No one denies that industry insiders are playing a critical 
role inside the Statehouse. But Davis administration officials and Assembly 
Speaker Robert Hertzberg say they needed industry experts to help solve the 
state's energy crisis. 

"I said give me the best possible experts in the investment banking world," 
Hertzberg said. "Everyone who is an expert has conflicts all over the place." 
The outcome of these energy initiatives could prove beneficial to some of the 
state's advisers or their companies: Southern California Edison vice 
president Larry Hamlin joined the Davis team last Thursday as the project 
manager for the governor's new plan to speed construction of power plants 
statewide. Hamlin has taken a two-month leave from Edison, where he was vice 
president of power production and operations. A faster construction cycle 
could directly benefit the utility's operations and generating divisions. 

Former Treasury Secretary Robert E. Rubin, chairman of the executive 
committee at Citigroup Inc., was appointed in January to advise Davis on bond 
financing, long-term power contracts, and ownership of power plants. 

SEC filings show that Citigroup's Salomon Smith Barney subsidiary works as an 
investment banker for several private power companies that sell electricity 
in California. Salomon prepared for sale last week $1.15 billion in 
securities offered by Calpine Corp and $300 million in securities by AES 
Corp. In addition Citigroup owned or managed $2.5 billion in independent 
power company stocks as of September, 2000. A Citigroup spokeswoman said 
neither Rubin nor the company would have any comment on his role. 

Michael R. Peevey, a former president of Southern California Edison Co., 
began advising the governor last June. Peevey left Edison in 1993 and formed 
New Energy Ventures Inc., a non-utility energy service provider, which he 
sold to AES Corp. in 1999 for $100 million. He now sits on the board of 
Excelergy, a Lexington, Mass. provider of technology to energy companies. A 
sworn disclosure signed by his wife, Assemblywoman Carol Liu, D-La Canada 
Flintridge, shows that the couple owned between $20,000 and $210,000 of stock 
in AES, Enron and Unisource, all independent power companies, last year. The 
UniSource stock, was purchased one month after Peevey began his advisory 
role. 

Liu said in an interview that Peevey has sold all his energy stocks since she 
made that disclosure Dec. 15. 

Davis spokesman Steve Maviglio said he was unaware that Peevey had continued 
to hold power company stocks after the appointment. 

Neither Peevey, Hamlin nor Rubin responded to requests for an interview, but 
Maviglio said the governor has chosen the best people and is reviewing 
suggestions to make sure the best interests of Californians are being 
protected. 

"It seems natural to tap people who are the best at this and can get the job 
done for California," said Maviglio. "They know that they need to separate 
their past and their future when it comes to helping the state." 

Many experts applaud these choices. 

If you're in a bind and California clearly is who better to enlist than the 
insiders? "Is it a potential conflict? Yes. Is it a big one? Not likely," 
said UCLA Finance Professor William M. Cockrum, a specialist in business 
ethics and a former investment banker himself. Cockrum said such 
relationships are routine on Wall Street and investment bankers are trained 
to handle them. 

"What you want is a bunch of smart people who are used to dealing with 
economic realities," Cockrum said. 

Not everyone agrees. 

"It is a different matter when public dollars are at stake and matters of 
public policy of this order of magnitude are being decided," said Harvard Law 
professor Elizabeth Warren. "The Legislature needs to be clear when they are 
getting independent advice and when they are getting lobbied. 

Just because this is how business is always done, doesn't mean it's right." 
Lawmakers have raised similar concerns, saying there hasn't been enough 
disclosure of potential conflicts. 

"I'm uncomfortable with someone who represents a stakeholder, like power 
generators, providing independent advice on which direction we should go," 
said Sen. Joe Dunn, D-Santa Ana. "These are folks out of the financial 
markets, whose businesses may very well have a lot at stake in terms of the 
outcome of this crisis. I don't think we can consider that to be independent 
advice." 

Dunn was talking specifically about the role of Credit Suisse First Boston, 
which worked to restructure El Paso Electric Co. which went bankrupt in 1992. 
Today, the investment firm is preparing a public stock offering for a new 
subsidiary of Reliant Energy of Houston, called Reliant Energy Resources, 
Securities and Exchange Commission documents show. As of September 1999, the 
company also held or managed $35 million worth of stock in AES Corp., which 
owns power plants in Orange County. Investment bankers usually earn between 1 
percent and 25 percent of the amount underwritten; the exact amount is not 
disclosed. 

Credit Suisse First Boston declined comment, other than to say Hertzberg 
asked its investment bankers to help and they are working for free. Some of 
Davis' appointments have been applauded. For instance, he tapped Los Angeles 
Department of Water and Power head David Freeman to lead the state's 
negotiations for long-term contracts with power suppliers. Freeman has been 
praised for his role at the DWP because he fought against those who wanted to 
sell the public utility's own generators. "There is no one I would rather 
have negotiating for the state of California," said Assemblywoman Jackie 
Goldberg, D-Los Angeles. "He has never worked for anything other than the 
public. This man lives and breaths and thinks about what is in the best 
interest of ratepayers." Others sought by the governor decided on their own 
they had too many conflicts. 

In January, consultants from investment banker Goldman, Sachs met with Davis' 
Finance Director Tim Gage to discuss advising the governor. 

Goldman, Sachs owns J. Aron, a Singapore-based energy trader that supplies 10 
percent of Pacific Gas and Electric's natural gas needs. According to SEC 
records, Goldman also held or managed more than $1.5 billion in power company 
stocks as of September of 1999; and is listed as another lead underwriter, 
with Credit Suisse, on the Reliant public offering. 

Consumer advocates immediately began criticizing Goldman for its conflicts. 
Goldman decided shortly thereafter that its competing business interests 
posed a conflict Critics worried about the role of the investment bankers 
said their concerns mounted when they learned that Credit Suisse was doing 
more than offering advice. Hertzberg asked the company to craft a financing 
plan for the state's power purchases. 

AB1X, the landmark bill, which put California into the long-term energy 
buying business, included a revenue bond financing plan written by Credit 
Suisse. Another part of Credit Suisse' plan, which would use the bonds to pay 
off utilities past debts, has stalled in committee and may die there. 

Some lawmakers say the experts have helped protect Californians. For example, 
AB1X has a provision that came from a panel of bankruptcy attorneys who are 
advising the governor and the legislature. The state was going to buy energy 
and then sell it to the utilities, but this would have made the state an 
automatic party in any bankruptcy lawsuit. As a result of advice from 
experts, the state is making sure the energy gets delivered to customers, but 
the ownership of the electricity never shifts to the utilities. 

"We learned that if we are going to go out and buy power there are very 
specific things we must do to protect ourselves," Hertzberg said. "For 
example, that if there was a bankruptcy we would have been is an unsecured 
creditor. Their advice has been very valuable." And Hertzberg said when it 
comes to advisors with serious conflicts the Legislature is smart enough to 
take the advice of experts and recognize any bias. But Dunn, the Santa Ana 
senator, thinks the issue is too complex. 

"With all due respect, that's nonsense," Dunn said. "No one in this building 
can rise to the sophistication of the players in this market. 

Their entire professional life is dedicated to make sure they understand how 
this works in all its subtletiesIn fact, the advisers may believe they can 
step aside and provide independent, unbiased advise, but I don't think they 
can. If you have lived your life in this arena, you have a certain point of 
view." 

--By Chris Knap, Kimberly Kindy and Mark Katches 
--Register staff writer Kate Berry contributed to this report.



NewPower posts quarterly loss 

    PURCHASE, N.Y., Feb 14 (Reuters) - NewPower Holdings Inc.
(NPW.N), parent of New Power Co., a national provider of
electricity and natural gas to residential and small commercial
customers in the United States, reported a bigger-than-expected
fourth-quarter loss.

    The Purchase, N.Y.-based company reported a net loss of
$57.5 million, or $1.02 per share for the quarter. Analysts
expected a loss of 99 cents, according to First Call/Thomson
Financial.

    NewPower Holdings, formed by Houston-based Enron Corp
(ENE.N) in 1999 to take advantage of utility deregulation in
U.S. energy markets, said it expected to reach 1.2 million
customers in 2001, and that net revenues would be between $530
million and $540 million.

    Customer count reached 368,000, ahead of the 340,000 the
company had projected in an earlier plan.

    NewPower's shares added 20 cents to $8.40 on Wednesday on
the New York Stock Exchange. Shares are off 52-week highs of
$28.69, and above 52-week lows of $4.63.



GERMANY: INTERVIEW-Enron lauds Germany's open power market resolve.

02/14/2001
Reuters English News Service 
(C) Reuters Limited 2001. 

ESSEN, Germany, Feb 14 (Reuters) - Germany's cartel office and economics 
ministry have shown an encouraging commitment to clamping down on energy 
network owners who blocked access for newcomers, U.S. energy giant Enron said 
on Wednesday. 

"The cartel office last week charged E.dis Nord over excessive grid access 
tariffs," said Paul Hennemeyer, who specialises in government and regulatory 
affairs at Enron's office in Frankfurt.

"This will begin to send a signal to the market that these sorts of games 
have to stop and of course there's increasing pressure coming out of the 
ministry," he told Reuters during the E-world of energy conference and 
exhibition. 

E.dis, a subsidiary of major utility E.ON , has until March 8 to respond to 
charges its fees are more than 50 percent above the national market average. 

Hennemeyer said the cartel office was doing a good job, given it was badly 
resourced and with its role reduced to rule whether certain tariffs were 
anti-competitive on a case by case basis. 

The office cannot actually set tariff levels. 

Hennemeyer said a state regulator would be better placed to ensure 
competition, but the preferred reliance on voluntary agreements had created 
reasonable conditions for wholesale power markets since their liberalisation 
in April 1998. 

"If the German associations can extend these agreements to the retail market, 
they might be able to avoid regulation," he said. 

The situation was different in gas, which was deregulated in October 2000, 
but where market participants were dragging their feet over access terms, 
forcing the government to start working on its own network access decree. 

"I've made my bets that regulation in gas will come, hopefully in the right 
way," Hennemeyer said. 

"The networks are natural monopolies and the regulator should make sure the 
system is properly run, the commodity part is different and there should be 
competition, it should be up to supply and demand." 

"Either by design or by default, I see these things mixed up a lot when they 
are really two separate topics."



GERMANY: German gas market regulation inevitable-Aquila.
By Vera Eckert

02/14/2001
Reuters English News Service 
(C) Reuters Limited 2001. 

ESSEN, Germany, Feb 14 (Reuters) - A leading German energy trader said on 
Tuesday failure of German gas distributors and consumers to work out terms 
for market deregulation means political intervention is inevitable. 

"It's not a question of if, but when, the economics ministry will impose 
measures to force the market open," Joerg Spicker, managing director of 
Aquila Energy GmbH told Reuters during the E-world of energy conference and 
exhibition.

"The experiment with negotiated, instead of regulated, market access in 
Germany, has failed. I think the customers are beginning to realise that they 
would fare better with a regulated system." 

Negotiations among the four associations for a new network agreement to come 
into force by the end of September 2001 (VV2) are still non-conclusive ahead 
of a top level meeting of the associations' presidents on February 21. 

The two sides, which maintain that Germany's fragmented market nature and 
consensual political tradition makes voluntary negotiations the best option, 
failed to agree on access terms to networks and storage and the priorities at 
times of bottlenecks. 

These would be the minimum requirements to start free competition. 

To date only a few short-term delivery contracts for industrial clients have 
been secured by independent, international traders such as Aquila, Enron and 
local firm Trianel, but these often have to be enforced by court orders or 
interference by the cartel authorities. 

"That's maybe the beginnings of a market, but you would not call it true 
competition," Spicker said. 

Aquila, which had won new business in southern Germany in the first few weeks 
of this year, was finding negotiations over point-to-point access with 
sometimes up to four pipeline owners challenging, given they had to be done 
within a short time period. 

QUIBBLING OVER PIPELINE VALUES 
Spicker, who attended closed-door meetings last week through Aquila's 
membership of the European Federation of Energy Traders (EFET), said, it was 
highly doubtful that a solution could be found on February 21 that would pass 
governmental and EU scrutiny. 

One of the most controversial points was that pipeline operators wanted to 
base charges on renewal costs of their facilities when many installations had 
long been written off, Spicker said. 

"We refuse to help pay for pipelines that have already enabled the incumbents 
to reap profits for many decades," he said. 

The economics ministry in his view was already drawing up terms for cost 
structures and for the obligation to publish rates and capacity 
utilitisation. 

Aquila is a subsidiary of the Aquila U.K. group which belongs to U.S. company 
Utiliticorp.


UK: Goldman, Morgan Stanley top energy derivative trade.

02/14/2001
Reuters English News Service 
(C) Reuters Limited 2001. 

LONDON, Feb 14 (Reuters) - Investment banks Goldman Sachs and Morgan Stanley 
Dean Witter continued to dominate global oil derivatives trade last year, 
while U.S. energy companies were tops on power and gas products, an industry 
survey found. 

The survey was conducted by industry publications Energy & Power Risk 
Management and Risk of more than 1,000 banks, brokers, end-users and traders 
worldwide.

Goldman Sachs took the lead in 10 categories, including Brent swaps and 
options as well as European jet fuel and gas oil swaps and options, the 
survey found. 

Morgan Stanley Dean Witter claimed its dominance mainly outside Europe, with 
the top spot for West Texas Intermediate (WTI) crude swaps and Dubai swaps 
and options, plus U.S. jet fuel swaps and options and gasoline swaps. 

The two banks also held another 13 second and third places in the survey, all 
in oil or oil products. 
Among brokerages for oil products, UK-based Intercapital Commodity Swaps led 
with seven top spots, including Brent crude swaps and options, followed by 
Starsupply and Prebon Energy, which both claimed four top places among the 
brokerages. 

On the power side, Enron Corp took pole position in eight categories versus 
six in last year's survey. They included NYMEX look-alike swaps and options, 
basis swaps and options and UK electricity swaps and options. 

El Paso Energy, which recently acquired Coastal, swept the North American 
electricity trading groups, including swaps and options for the West, Centre 
and East. 

Koch Energy Trading was deemed best for North American weather derivative 
swaps and options, the survey found. 

The polling took place between late November and mid-January. Self-nominating 
and anonymous responses were discounted and respondents were asked to comment 
only on products with which they had direct experience. 

Categories with an insufficient number of votes were excluded.


 
Italy's ENI signs MoU to build power plant in Nigeria 

02/14/2001
Agence France-Presse 
(Copyright 2001) 

LAGOS, Feb 14 (AFP) - The Nigerian subsidiary of Italian oil group ENI has 
signed a memorandum of understanding to build a 400 megawatt power plant in 
southern Nigeria, a spokesman said Wednesday. 

The multi-million dollar agreement was signed Tuesday by Nigeria's Power and 
Steel Minister Olusegun Agagu for the government and Antonio Viera, the 
managing director of Nigerian Agip Oil Company, company spokesman Tajudeen 
Adigun said.

Viera told reporters at the ceremony he expected the two sides to finalise an 
agreement on the purchase by the national power company NEPA of the power 
produced by the plant within two weeks. 

The gas-fired plant, to be built in Kwale in Delta State and expected to cost 
around 350 million dollars to build, would be expected to come on stream by 
December 2003, Viera said. 

The power minister, Agagu, told reporters he was delighted that the two sides 
had reached this stage and said he was confident a final deal would be signed 
soon. 

"It will not take long before a power purchase agreement that is acceptable 
to all parties could come to be because most of what could constitute 
stumbling blocks have actually been addressed," he said. 

He praised ENI's subsidiary for moving ahead with the project where other 
companies - including US group Enron, Anglo-Dutch oil company Royal 
Dutch/Shell and US group ExxonMobil were still in talks on proposals. 

"Finally, we are on our way to actualising the first major independent power 
production through AGIP," he said. 

Agagu said the government was very concerned to build up power generation and 
improve transmission and distribution. 

"The federal government has put a lot of emphasis on the power sector being 
the driving force behind the economy," he said. 

Nigeria's state-run power company NEPA has under-performed for many years and 
is incapable of providing constant power throughout the country. 

President Olusegun Obasanjo has pledged an overhaul of the sector and 
promised to increase average power generated to 4,000 megawatts by the end of 
this year. 

The memorandum signed on Tuesday followed the signing of a memorandum in 
April last year to study the feasibility of the project. 
pcj/jlr



Qatar, UAE Dolphin Gas Proj Deal Expected In Mar - Enron

02/14/2001
Dow Jones Energy Service 
(Copyright (c) 2001, Dow Jones & Company, Inc.) 

DUBAI -(Dow Jones)- Qatar and the United Arab Emirates Offsets Group, or UOG, 
plan to sign a final agreement for the Dolphin gas project in mid-March, U.S. 
Enron Corp. Middle East General Manager Mac McClelland said Wednesday. 

Two years ago, UOG and Qatar's General Petroleum Corp. signed a statement of 
principle for the $10 billion Dolphin project, under which natural gas from 
Qatar's offshore North Field will be piped by sea to Abu Dhabi for onward 
delivery to Dubai and Oman.

Last year, Offsets sold 49% of the project to TotalFinaElf SA (TOT) and Enron 
(ENE), which have been commissioned to implement the initial phase of the 
project, estimated at a cost of about $4 billion. 

McClelland said Enron is responsible for midstream and marketing while 
Totalfina will be in charge of upstream operations. 

The 365-kilometer pipeline from the Qatari capital Doha to Abu Dhabi is 
estimated to cost about $1.2 billion, $750 million-$800 million of which will 
be on the subsea pipeline, he added. 

McClelland said currently, it's economically feasible to pipe 2 billion cubic 
feet a day of gas through the pipeline but the long term plan is to send 3.2 
bcf a day from Qatar to the UAE and Oman. 

He added that Enron will retain equity in pipeline. 

U.S. Exxon Mobil Corp. (XOM), which has a concession in the North Field, 
might get involved in supplying the additional amounts of gas in the future, 
he added. 

Qatar's Oil Minister Abdullah bin Hamad Al-Attiyah said earlier this week 
that a final agreement between Qatar and the UAE would be signed within weeks 
and that previous disagreements on the transfer price of the gas between the 
two sides had now been resolved. 

McClelland said Wednesday that marketing the gas in the region wouldn't be a 
problem. 

Also in the long term plans are possibilities to take the gas further east to 
India and Pakistan. Enron is already involved in a project which supplies gas 
from Abu Dhabi and Oman to an Indian power plant. 

First gas from Dolphin is targetted to reach Abu Dhabi by late 2004 or early 
2005. About 1 billion to 1.5 billion cubic feet per day of Qatari gas would 
be consumed by utilities in Abu Dhabi and the remainder would be supplied to 
Dubai. 

Enron's McClelland said the Dolphin project and a natural gas venture in 
Saudi Arabia are two priority projects for the company in the Middle East. 

Enron is involved jointly with Canada's Occidental, in making investment 
proposals for Saudi Arabia's natural gas sector, a process which kicked off 
last year. 

He said Enron is looking into several new ventures in the region, such as a 
power swap between Syria and Turkey, gas distribution in the Omani capital, 
Muscat, and other opportunities in Jordan and Egypt. 

Enron is currently building a powerplant in Gaza in the Palestinian 
territories but the project has been on hold since October 2000, McClelland 
said. 

-By Dyala Sabbagh, Dow Jones Newswires; 9714 3314260; 
dyala.sabbagh@dowjones.com


Dallas-Based Blockbuster's Net Loss Widens in Quarter
Maria Halkias

02/14/2001
KRTBN Knight-Ridder Tribune Business News: The Dallas Morning News - Texas 
Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World 
Reporter (TM) 

Blockbuster Inc., the world's largest video store chain, posted stronger 
results from operations and continued to gain market share last year, while 
its fourth-quarter loss widened. 

The Dallas-based company's net loss was $24.6 million, or 14 cents a share, 
in the period ended Dec. 31, compared with a net loss of $6.8 million, or 4 
cents, last year, the company said Tuesday.

Excluding goodwill amortization, earnings of 22 cents a share were up 10 
percent from last year and exceeded estimates. 

Wall Street analysts had expected cash earnings of 20 cents a share, 
according to a survey by First Call/Thomson Financial. 

The amortization of almost $6 billion in good will was left over on 
Blockbuster's balance sheet from 1994, when Viacom bought the company. 
Blockbuster is a publicly traded subsidiary of entertainment giant Viacom 
Inc., which owns 80 percent of the chain. 

John Antioco, Blockbuster's chairman and chief executive officer, said the 
company's market share increased last year to 36 percent of U.S. video 
rentals, up from 32 percent in 1999. The company is poised to end this year 
at 40 percent, he said. 

Total revenue was up 12.1 percent to $1.34 billion in the fourth quarter from 
$1.20 billion last year. Same-store sales increased 7 percent. 
Blockbuster also said it has sold more than 100,000 DirecTV Systems since 
September. In June, Blockbuster will begin co-branding DirecTV's pay-per-view 
service, Mr. Antioco said. 

The company also said that Blockbuster's video on demand tests are under way 
with an Enron Corp. subsidiary in Seattle, Portland, New York and a Salt Lake 
City suburb. 

This year, Blockbuster said, it plans to open 200 to 250 company-owned 
stores, about half the number of stores it opened last year. 

It plans fewer stores because competitors have slowed store growth. 
Blockbuster operates 7,700 stores throughout the United States, Europe, Asia 
and Australia. 

The company's stock price gained 4 cents a share to close at $11.72 on the 
New York Stock Exchange.



NEWS
DEMAND A DEAL Blockbuster pacts for PPV, VOD rights to U pix
PAUL SWEETING

02/14/2001
Daily Variety 
6
Copyright 2001 Variety, Inc. 

WASHINGTON --- Blockbuster Entertainment is close to a deal with Vivendi 
Universal that would give the retailer its first agreement with a major 
studio for pay-per-view and video-on-demand rights to movies. 

Blockbuster threatened to withhold two of this week's new Universal releases 
from its store shelves Tuesday if Vivendi Universal didn't agree to the PPV 
terms.

In a conference call with analysts Tuesday, the same day its favorable 
earnings report was released, Blockbuster chairman John Antioco said the 
vidtailer had reached a verbal agreement with Vivendi U late Monday, covering 
homevideo, pay-per-view and video-on-demand rights to Universal films. 

The vidtailer has been seeking those additional rights for several months, as 
it struggles to expand beyond its video rental base. Company recently 
launched a video-on-demand system in conjunction with Enron in four cities 
but up until now had been unable to offer its 700 subscribers any new 
releases from the major studios. Instead, Blockbuster had to rely on a few 
hundred indie films it owns. 

The vidtailer is also slated to launch a 42-channel pay-per-view service with 
DirecTV in June. 

Recently, however, Antioco signaled Blockbuster's new get-tough attitude with 
the studios, saying that the chain would not renew any of its video 
revenue-sharing deals with the studios unless those deals also covered PPV 
and VOD rights. 

Those deals have proved highly beneficial for the studios, and, along with 
Blockbuster's 40% share of the U.S. video rental market, gives the vidtailer 
considerable leverage. 

Blockbuster and Universal have been operating without a formal 
revenue-sharing agreement since October, when their previous deal expired. 

"As late as yesterday afternoon, we had no deal" with Universal, Antioco said 
Tuesday. "As a result, we had decided that we would only purchase Universal's 
retail (i.e., sell-through) priced product, which, by the way, includes all 
of their major hits. We also decided we would not stock the titles 'Bring It 
On' and 'Rocky & Bullwinkle,' which have a street date of today." 

At that point, Antioco said, the companies reached a verbal agreement to 
renew their revenue-sharing agreement and to grant Blockbuster the additional 
rights it sought. The chain will also now stock the two titles in all its 
stores. 

Blockbuster officials declined to disclose whether the new deal covers all 
Universal product or when the new rights would take effect. If the deal 
parallels the companies' rev-sharing agreement, however, it would likely 
cover all new U releases. 

Blockbuster would gain access to the PPV and VOD rights during the existing 
windows for those delivery systems, generally 30-90 days after homevideo 
release. 

Universal execs had no comment. 

Profits up for Blockbuster 
Word of the U deal comes on the heels of a strong fourth quarter for 
Blockbuster. Cash earnings for the video segment grew 31.6% for the quarter 
to $49.6 million, on the strength of a 7% increase in worldwide same-store 
sales. 

Overall revenue for the quarter was up 12.1% to $1.34 billion, paced by a 
12.5% increase in rental revenue. 

For the year, cash earnings from the video segment (excluding new media) grew 
55.9%, to $154.5 million. Full-year cash flow (earnings before interest, 
taxes, depreciation and amortization) for the video segment grew 13.0% to 
$588.2 million. For the quarter, cash flow grew 15.2% to $168.3 million. 

Antioco said that Blockbuster is exploring a store-within-store concept to 
focus on a broader range of home entertainment products. 

The retailer said it sold more than 100,000 DirecTV systems in its 3,800 
stores in 2000. For each DirecTV system it sells, the vidtailer receives a 
portion of the customer's subscription fees to the satcaster, plus a cut of 
all PPV revenue from that subscriber.


Mirant of US plans power plant bid.

02/14/2001
Business Times (Singapore) 
(c) 2001 Singapore Press Holdings Limited 

It's open-minded about going it alone or with partners 

SINGAPORE'S long-awaited Big Bang for the power industry is reviving foreign 
interest in the industry, which had waned in the wake of the Asian financial 
crisis.

One company displaying strong interest is Atlanta-based Mirant Corporation. 

Frederick Kuester, Mirant's managing director for Asia-Pacific, said Mirant 
wants to bid for one of the three power plants the Singapore government wants 
to privatise later this year. 

The three power plants are: PowerSeraya (2,800 MW), PowerSenoko (2,500 MW) 
and the newest Tuas Power which has a capacity of 1,900 megawatts. 

Other foreign companies which have indicated interest in the power plants 
include Mission Energy and Enron International, which have lined up local 
heavyweights to work on the bids. 

In an interview with BT yesterday, Mr Kuester said Mirant has been studying 
Singapore's privatisation programme and will take part in the bidding when 
the invitations are issued. 

"We know the rules will be fair and transparent. We have been talking with 
the authorities and also with potential partners," he said. 

An added attraction for foreign investors is the likelihood the government 
would allow them to own 100 per cent of the power plant, giving them a freer 
hand. 

Mr Kuester indicated that Mirant has been sounding out potential local 
partners and is still open-minded on whether it would go it alone or with 
partners. 

According to him, Singapore's installed capacity exceeds demand by 50 per 
cent, giving operators a margin to hedge in the futures market, unlike in 
California. 

Mirant, listed on the NYSE in September 2000, reported net income of US$359 
million (S$627 million) last year.



FEDERAL POWER MIN GIVES PRESENTATION TO INDIAN CABINET

02/14/2001
Asia Pulse 
(c) Copyright 2001 Asia Pulse PTE Ltd. 

NEW DELHI, Feb 14 Asia Pulse - Indian Cabinet today discussed in detail the 
power situation in the country and the reforms in the sector. 

The discussion took place after the federal power minister Suresh Prabhu gave 
a presentation on the power sector reforms.

While refusing to divulge any details of the presentation, the federal 
parliamentary affairs minister Pramod Mahajan said it focussed on the power 
situation. 

To a query whether the Enron Issue also came up for discussion, the minister 
said it was only a small part of the overall discussions. 
(PTI) 14-02 1309


ASIA-PACIFIC: No let-up for Indian electricity 
Financial Times; Feb 14, 2001
By KHOZEM MERCHANT

Enron, the US power company, has received Rs740m (Dollars 16m) from India's 
Maharashtra State Electricity Board to settle an electricity bill whose 
non-payment forced Enron last week to call in a central government guarantee. 

But the pressure on the Bombay-based utility continued as a deadline on a 
state guarantee exercised by Enron lapsed last night without the payment of a 
further Rs1.54bn in overdue bills incurred in December. 

Enron may now invoke a guarantee from New Delhi for the second time in two 
weeks. Enron officials indicated privately that the company would not be 
pressing the central government unless the situation worsened. 

For Enron, this means two months of unpaid bills - which "exceeds our comfort 
level by one month", one official said. That threshold may be breached on 
February 25, the deadline for the payment of January's bill of Rs1.12bn. 

Maharashtra State Electricity Board was assisted in its payment of the 
outstanding Rs740m November bill (and an interim payment of Rs50m) by the 
state of Maharashtra. Both MSEB and the local government, buoyed by the anger 
of local politicians at what they regard as high tariffs, have delayed 
payments for power generated at Enron's Dabhol plant near Bombay for more 
than a year. 

Enron believes - and MSEB privately accepts - that the situation would 
improve if the utility were able to improve collection of its own bills. 

Copyright: The Financial Times Limited


Cabinet okays Navy land transfer to Andamans
The Times of India News Service

02/14/2001
The Times of India 
Copyright (C) 2001 The Times of India; Source: World Reporter (TM) 

NEW DELHI: The Cabinet on Tuesday approved the transfer of 200 acres of land 
being held by the Indian Navy at Hutbay, Little Andaman, to the Andaman and 
Nicobar administration free of cost. The land is part of the 410 acres held 
by the Navy in the area, parliamentary affairs minister Pramod Mahajan said 
after the Cabinet meeting. 

The land will be used by the Andaman and Nicobar administration to re-settle 
tribals from Car-Nicobar, Mahajan said. The transfer of the land is subject 
to the condition that the Andaman and Nicobar administration acquire 70 acres 
of private land co-located with the Port Blair air field for expansion of the 
run-way and transfer it to the Navy on a no-profit, no-loss basis.

The 410 acres of land was given to the Indian Navy by the Andaman and Nicobar 
Islands free of cost and part of it at Hutbay was being used for a high 
frequency direction finder (hf/df) station and radar station. 

The Cabinet also approved the signing of an aviation safety promotion 
agreement with Russia, under which both sides would conduct technical 
assessments to understand their standards and systems in areas such as 
air-worthiness, environmental testing, maintenance facilities, approval of 
flight operations and approval of aviation training establishments. 

Mahajan said if the assessment by the two sides led to the sense that 
standards, systems, rules, procedures and practices were compatible, then 
each side would agree to accept a certification of the other on a reciprocal 
basis. 

The agreement was a follow-up of the setting up of Indo-Russian Working Group 
for promoting cooperation in civil aviation finalised during the meeting of 
the Indo-Russian Commission on trade, economic, scientific and cultural 
cooperation held here in January last year. 

While these two decisions as well as the one extending the life of the 
commission examining the Constitution took just 15 minutes, the rest of the 
meeting was spent in discussing in detail the power situation in the country 
and the reforms in the sector. The discussion took place after power minister 
Suresh Prabhu gave a presentation on the power sector reforms. 

The slide-presentation and the paper on the power scenario in the country 
provides an insight into the various mechnanisms being put in place for 
augmenting power supply. To a query whether the Enron issue also came up for 
discussion, Mahajan said it was only a small part of the overall discussions.



Equity dilution, not divestment in Maruti
The Times of India News Service

02/14/2001
The Times of India 
Copyright (C) 2001 The Times of India; Source: World Reporter (TM) 

NEW DELHI: The government on Tuesday decided to dilute its half-ownership of 
Maruti Udyog Ltd through a new equity-rights issue, to which it will waive 
its right to subscribe, in favour of financial institutions (FIs). 

According to a Cabinet Committee on Disinvestment (CCD) decision, once this 
is done, the FIs may do what they will with their new share -sell it to the 
other half-owner, Japan's Suzuki Motors, sell it in the market, or keep it. 
All this is contingent on the prior, written consent of Suzuki; a 1992 
agreement between the two partners compels each to take the other's prior 
permission before doing anything about equity ownership.

``We aim to do everything (only) in full agreement with Suzuki,'' said 
Disinvestment Minister Arun Shourie; he stressed the point more than once. 
Suzuki will, the plan presumes, fully exercise its proportionate right to the 
new equity issue. 

``If they (Suzuki) agree, we expect the entire process to be completed by 
September,'' Shourie said. The invitation to Suzuki to start negotiating 
details will be issued in a couple of days. 

All the details - the quantum of the rights issue, the valuation and 
everything else - will be settled through negotiation between Suzuki and the 
government. The CCD decided that the valuation, if Suzuki agrees, should be 
done by three bankers of international repute -- one to be decided by it, one 
by Suzuki and the third by mutual consent. ``The entire basis for valuation, 
indeed, the entire process at each stage will be made completely 
transparent,'' Shourie said. 

This decision was one of the five options before the CCD, the outcome of a 
series of discussions between a panel of Union government secretaries and 
Suzuki. In addition, on Monday, the secretaries had another detailed 
discussion with financial institutions, on what would be needed if the rights 
issue was cleared. 

``Suzuki's main concern (in the talks already held) was to ensure we don't 
disinvest our share in favour of one of their competitors,'' Shourie said, 
adding it was a legitimate wish. 

The CCD, he said, had decided on doing it this way to ensure two things. One, 
to ensure Maruti retains its competitive strength. Two, to ensure maximum 
valuation of the government's present equity in it. The CCD decision aims at 
ensuring both, he said. 

In another development, the Union Cabinet discussed the power situation in 
the country and the reforms in the sector. 

The discussion took place after power minister Suresh Prabhu gave a 
presentation on the power sector reforms. The slide presentation and the 
paper on the power scenario in the country provide an insight into the 
various mechanisms being put in place for augmenting power supply. 

While refusing to divulge any details of the presentation, Parliamentary 
Affairs Minister Pramod Mahajan said it focussed on the power situation. 

To a query whether the Enron issue also came up for discussion, the minister 
said it was only a small part of the overall discussions. 


Power reforms and regulations
Kirit Parikh

02/14/2001
Business Standard 
11
Copyright (c) Business Standard 

Power shortages, scheduled power cuts and unscheduled brownouts have plagued 
the country for many years. The process of privatisation and reforms was 
begun in 1992 to solve these problems. Yet eight years later the situation 
is, if anything, worse than before. Why is it? What have we done? Why has not 
it worked? What should we do? 

It is obvious that power shortages imply lack of capacity to generate power. 
In turn, this reflects inadequate investment in building power plants, 
transmission and distribution network, or fuel production and transport 
capacity. It could also reflect poor operation of existing capacities. In 
mid-eighties when Rajiv Gandhi became the Prime Minister, he concentrated on 
the latter and emphasised improving load factor of thermal plants. This 
worked for some time but the slack was more or less exhausted by early 
nineties. Today, the average load factor on thermal plants has reached 68 per 
cent, which is very good. Since then despite some progress in further raising 
load factor, lack of adequate investment has been the main reason for power 
shortages. Over the last decade, installed generating capacity has grown by 
50 per cent, whereas power generation has grown by 130 per cent.

Inadequate investment was mainly the result of the inability of state 
electricity boards (SEBs) to generate financial surpluses. The main reasons 
for the financial sickness of SEBs are poor pricing of electricity and 
pilferage. Most SEBs subsidise highly agricultural consumers and some also 
domestic consumers. All have high losses due to pilferage of power disguised 
as transmission and distributions (T&D) losses and also as agricultural 
consumption. This is the fundamental reason for power shortages. 
Unfortunately, instead of tackling this main problem, successive governments 
have tried to skirt around it. Their efforts at reforms have more or less 
failed. What have they done and why have they failed? 

The first attempt was to attract private investors to set up generating 
plants. The power sector was opened up for private, both domestic and 
foreign, power generators in 1992. Despite massive interest of private 
investors the progress has been miniscule. The private generators were 
required to sell only to the SEBs. When one's only customer is financially 
sick, one would think twice before getting into the business. The 
difficulties Maharashtra SEB is facing in meeting Enron's bills would make 
private producers think even more before they invest. In fact, unless the 
financial sickness of the SEBs is taken care of, private power generators are 
even less likely to come now. 

Once the reluctance of private generators was perceived, the government 
thought of mega-projects. There were and are to be large projects, which 
would supply power relatively cheaply. To reduce the price of power, the 
government offered concessions such as no customs duty and longer tax 
holiday. 

Thus, the government provides the subsidy up front. But here also the 
unreliability of SEBs as customers which may not honour bills is a problem. 
To get around this, a new public corporation called Power Trading Corporation 
(PTC) is envisaged. This will buy all the power from a mega-project, pay the 
bill (how?), and in turn sell the power to different SEBs. How would the PTC 
collect its dues from SEBs? If it cannot, presumably the central government 
will foot the bill. The sick SEBs would have an even greater incentive to 
default on payment to a public corporation than to a private generator. This 
is obvious as today the various SEBs together owe public sector corporations 
such as NTPC, Coal India, NHPC, etc Rs 27,000 crore. 

Pricing and pilferage reforms are inescapable. If we delay these reforms, 
even good firms like NTPC would be dragged down by the sick SEBs. The chief 
ministers agree in New Delhi to raise tariff for agricultural consumers, but 
as soon as they return to state capitals, they develop cold feet. Only a 
handful of chief ministers have made some progress here. To force state 
governments to raise the price of power, the idea of state electricity 
regulatory commission (SERC) was thought of. SERCs are to be independent 
statutory bodies and are to prescribe power tariffs. If a state government 
wants so subsidise any particular set of consumers, it has to give direct 
budgetary support to the SEB. This roundabout way has not yet produced 
substantial result and progress is understandably slow as the SERCs are 
appointed by state governments. Only three state SERCs had issued tariff 
orders by the end of June 2000. 

To deal with pilferage, i.e. theft of power, should be easy. Unfortunately, 
it is not, as some of the large staff of SEBs collude in this theft. Thus, it 
was felt that if distribution is privatised, the problem of pilferage can be 
solved. Naturally, the SEB unions oppose such moves. The progress has been 
miniscule. Only Orissa has fully privatised distribution. Some states have 
privatised small parts of their system. 
The few cases, where distribution is privatised, customers have not been 
happy as they are asked to pay higher price. They pay it but do not see any 
improvement in the reliability of quality of supply. 

If reforms are done properly, consumers who are not subsidised at present 
should benefit from them. Reforms should improve the efficiency of the 
system, reduce costs and hence price for such consumers. How should we carry 
out reforms, which have such effects? Privatisation of distribution is the 
necessary first step. However, it should be done in a way that does not turn 
the consumers away from reforms. For this, we should set up a process which 
ensures that consumers are not required to pay any more for the inefficiency 
of the system. This requires the following: 

First of all we should work out the minimum cost at which an efficiently 
working power system, without pilferage, would supply power to different 
consumers. Consumers should be informed about it and made to accept that they 
have to pay such a price. 

Next, SERCs should not permit anyone to charge a price higher than the 
optimal price or the present price, whichever is higher. If the present price 
is higher, it should be brought down to optimal level in a time bound 
schedule over two or three years. 

The private distribution company should be given a plan of eliminating 
pilferage over a period of two years as per an agreed schedule. The state 
should compensate the private distributor for pilfered power only as per the 
agreed schedule. If the private firm eliminates pilferage at a faster pace, 
it would make extra profit. If it delays, it loses money. That is its 
incentive. Such a scheme makes privatisation of distribution acceptable to 
consumers who should see better, cheaper power with higher efficiency. So 
deal with the main problem first.



DPC not to invoke central guarantee
Our Corporate Bureau Mumbai

02/14/2001
Business Standard 
1
Copyright (c) Business Standard 

The Enron -promoted Dabhol Power Company (DPC) has decided not to invoke the 
Central government counter-guarantee for now, although the Maharashtra 
government failed to pay the Rs 152 crore bill for December, 2000 on Tuesday. 
DPC had invoked the state government guarantee last week when the Maharashtra 
State Electricity Board failed to pay the bill. The last date for paying the 
bill as per the terms of the state government guarantee was Tuesday. 

"This is not a double default situation. They have already paid the November 
bill and only the December bill is pending. Consequently, we have decided not 
to invoke the counter-guarantee for the moment," said Neil McGregor, CEO and 
president of DPC. When queried further, he clarified that this did not mean 
that the counter-guarantee would not be invoked at all. "The next key date is 
February 25, when the January 2001 bill becomes due," he added.

It is also learnt that DPC does not want to embarrass the state government at 
a time when negotiations are due to be held with the Godbole panel. The 
Maharashtra government last week announced the formation of a panel under 
former Union home secretary Madhav Godbole to 
review the controversial power project. 

Meanwhile, DPC has said in a press statement that it has received the 
outstanding amount of Rs 74 crore towards the November bill. "The receipt of 
this payment as well as the formation of the review committee are very 
positive signals".



Enron saga: Powered by govt generosity
Rajesh Ramachandran

02/14/2001
The Times of India 
Copyright (C) 2001 The Times of India; Source: World Reporter (TM) 

NEW DELHI: The tariff structure of Enron's Dabhol power project was conceived 
in such a manner that it was inevitable that the company would invoke its 
counter-guarantee against the Maharashtra and Union governments. 

The Shiv Sena-BJP combine came to power in Maharashtra in 1995 on the slogan 
of throwing Enron into the Arabian Sea. Soon after, it cancelled the project. 
Later, it renegotiated the deal with Enron and even gave an assurance for the 
second phase. Meanwhile, the 13-day Vajpayee government approved the 
extension of the government of India's counter-guarantee on May 27, 1996.

The first counter-guarantee, given on September 15, 1994, was for Phase-I of 
the Dabhol project with a capacity of 695 mw. After the SS-BJP government 
cancelled the project, the then finance secretary Montek Singh Ahluwalia told 
the parliamentary sub-committee on fast-track projects that ``as of today, if 
the power purchase agreement (PPA) is being revised, that means the 
counter-guarantee is not effective''. When Ahluwalia said this in 1995, the 
project was being cancelled only to be re-negotiated again after Enron's 
Rebecca Mark visited Bal Thackeray. But, Ahluwalia had held that if the PPA 
is revised, the earlier counter-guarantee would not hold good. 

Yet, the Union power minister told Parliament in May 1996 that the counter- 
guarantee held good. Thus, a member of the standing committee gave a breach 
of privilege notice against Ahluwalia for misleading the House. 

The finance ministry, on behalf of Ahluwalia, replied to Parliament thus: 
``While the government of Maharashtra had announced its decision for 
cancellation of the Dabhol power project, the PPA between MSEB and the 
company was not terminated.'' That is, despite the project being cancelled, 
the agreement to purchase power from the cancelled project is valid and hence 
the counter-guarantee stands. 

It was then pointed out by the member who had moved the breach of privilege 
notice that the contract was repudiated by the Maharashtra government. After 
re-negotiation, the project itself was revised. There was a change in the 
capacity of the project, the fuel to be used, the capital cost, tariff and 
change in scope after inclusion of phase II of the project which was not 
included earlier. 

In reply, Ahluwalia submitted that the counter-guarantee had provided for 
amendments to be made to the PPA, subject to prior written approval by the 
Central government. Thus, if Jaswant Singh as finance minister had not 
approved the extension of the earlier counter-guarantee, it would not have 
been valid insofar as the amendments to the PPA were concerned. 

So the onus of the counter-guarantee rests with the 13-day BJP government, 
which did not wait for a review before it approved the extension of the 
earlier counter-guarantee. All this was done within 13 days when the 
government had not even won a vote of confidence in Parliament. Again it was 
not a fresh counter-guarantee but the extension of the earlier one despite 
the Maharashtra government's repudiation, its renegotiation with Enron and 
the changed physical parameters of the project. 

It is interesting to note what Jaswant Singh as chairman of the committee had 
said about the counter-guarantee a year before his government gave the 
approval for extension: ``Counter-guaranteeing for any project is uncalled 
for since several independent power producers are ready to implement projects 
without any counter-guarantee. Also, there appears to be no justification for 
giving counter-guarantee only to selective fast-track projects.'' 

Tomorrow: The way forward

 

Centre signs power sector reforms MoU with Haryana
Our Regional Bureau New Delhi

02/14/2001
Business Standard 
3
Copyright (c) Business Standard 

The Centre today signed a Memorandum of Understand-ing on power reforms with 
Haryana which involves hundred per cent metering of all consumers by the end 
of this year, while a special Cabinet meeting discussed the power situation 
and the possible reforms in the sector. 

In his presentation to the Cabinet, power minister Suresh Prabhu said the 
demand for power would touch 100,000 mw by the end of the 10th Plan. It could 
be met only with an equal investment each by the public and the private 
sector, he remarked.

The meeting was held in the backdrop of the messy Enron affair. Prabhu's 
paper on the power scenario gives an insight into power supply augmenting 
mechanisms. 

The MoU was signed by the Haryana chief secretary L M Goyal and Union 
secretary power A K Basu in the presence of the Prime Minister A B Vajpayee, 
Prabhu and the Haryana Chief Minister O P Chautala. 

It is based on the state achieving specific reforms milestones including 
compulsory metering of electricity supply and reducing transmission losses 
from 40 per cent to 20 per cent by 2006. The state will also undertake energy 
audit to reduce system losses. 

The milestones achieved, Prabhu said, would entitle the states to 
modernisation funds from the accelerated power development programme and 
another programme, soon to be announced, to improve transmission systems. 

The Center will also take up the 436 mw Faridabad gas-based power station for 
early completion. Though MoU did not mean network privatisation, Chautala 
said he was willing to raise power tariffs, even for farmers.


India: Enron review panel to begin sittings today
Our Special Correspondent

02/14/2001
The Hindu 
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire 

MUMBAI, FEB. 13. Following the payment of the November 2000 bill to Enron's 
Dabhol Power Company by the Maharashtra State Electricity Board yesterday, a 
review panel - headed by Mr. Madhav Godbole, former State official who was 
later a Union Home Secretary - has been set up to look at all aspects of the 
high- tariff imbroglio. 

The panel will start its sittings from tomorrow. It is expected to submit its 
findings within a month, as stipulated by the Government.

The Dabhol Power Company (DPC), while confirming the receipt of the November 
dues, has said it would like to "enter into a dialogue with the committee" 
after having earlier shown its willingness to consider a third party buyer 
for its power, which the MSEB did pick up. 

A solution to the issue the Government here expects is one in which the 
Centre or its undertakings in the energy sector would pick up the power 
entirely from the DPC. This was stated by the Chief Minister, Mr. Vilasrao 
Deshmukh, in a recent letter to the Prime Minister, Mr. Atal Behari Vajpayee. 

The State Government is aware that the Centre is averse to such 
counter-guarantees being uncashed, as it would send adverse signals on the 
capacity of the country to absorb foreign direct investments. 

The MSEB, cash-starved as ever, made the November payment on the basis of an 
improved momentary liquidity enabled by the Government which paid about the 
same quantum of money as was needed, but under the guise of provisioning for 
what was set out in the annual plan and under a budgetary provision. A senior 
official conceded that both the sum and the timing of its routing to the MSEB 
was a "coincidence".


Macerich Announces Year-End Results

02/14/2001
PR Newswire 
(Copyright (c) 2001, PR Newswire) 

SANTA MONICA, Calif., Feb. 14 /PRNewswire/ -- The Macerich Company (NYSE: 
MAC) today announced results of operations for the year and quarter ended 
December 31, 2000 which included the following: -- Funds from operations 
("FFO") per share - diluted increased to 
$.91 from $.87 for the fourth quarter of 1999 on a comparable basis. 

For the year, FFO per share - diluted increased to $2.82 from $2.70 in 
1999. 

-- Total tenant sales increased by 2.4% for the quarter and 3.3% for the 
year compared to comparable periods ended December 31, 1999. Annual 
tenant sales per square foot increased to $349. 

-- During the year, Macerich signed new leases at average initial rents 
of $32.95 per square foot, substantially in excess of average 
portfolio minimum rents of $27.09. First year rents on mall and 
freestanding store leases signed during the year were 20% higher than 
expiring rents on a comparable space basis. 

-- Portfolio occupancy increased to 93.3% compared to 92.8% at 
December 31, 1999. 

-- The Company entered into a 10-year energy management contract with 
Enron Energy Services. Enron will manage the supply of electricity 
and natural gas and provide energy management services to the majority 
of the Company's malls. 

-- During the fourth quarter, the Company implemented a 3.4 million share 
stock repurchase program. Under that program, during the fourth 
quarter, the Company repurchased 564,000 shares of its common stock. 

Commenting on results for the quarter, Arthur Coppola, President and Chief 
Executive Officer of Macerich stated, "The quarter was highlighted by very 
strong leasing activity and high occupancy levels. During the quarter, 
releasing spreads, on a comparable space basis, were up 26%. We also entered 
into a long-term energy management contract, which will help manage the 
volatile energy costs associated with deregulated markets, such as 
California. Furthermore, during the quarter we began to execute our 
previously announced 3.4 million share stock repurchase program. In this 
market, we view the repurchase of our stock as a very attractive opportunity 
that we can pursue to deliver stockholder value. Our long-term view of our 
prospects for growth in our portfolio remains positive." 

/CONTACT: Arthur Coppola, President and Chief Executive Officer, or Thomas E. 
O'Hern, Executive Vice President and Chief Financial Officer, both of The 
Macerich Company, 310-394-6000/ 06:45 EST 



Racing friend of the Queen to be US ambassador
Ben Fenton in Washington

02/14/2001
The Daily Telegraph 
Copyright (C) 2001 The Daily Telegraph; Source: World Reporter (TM) 

THE MAN who emerged yesterday as a racing certainty to be America's next 
ambassador to Britain will need no introduction when arriving at Buckingham 
Palace to present his credentials. 

William S Farish III, a multi-millionaire racehorse breeder, is already a 
good friend of the Queen. She has been a guest four times at his renowned 
stables in Kentucky, where he trains at least two of her horses.

According to sources in Washington, President Bush will appoint Mr Farish, an 
old and close friend of his father, to be his man at the Court of St James. 

Mr Farish, 61, was coy yesterday about the appointment, which has not yet 
been confirmed by the White House and is subject to Senate approval. 

Speaking from his home near Lexington yesterday, Mr Farish said: "I've had a 
meeting with the President, some time ago, and he asked if I would serve in 
the administration in some capacity." 

He confirmed that he had been offered a specific job but told the Lexington 
Herald-Leader: "At this point, it would be impossible to say any more." 

Mr Farish, known as Will, seems to have beaten off several other contenders 
for America's plum diplomatic job. 

Others who have been mentioned include Bob Dole, the former Senate leader and 
Republican presidential candidate, whose wife, Elizabeth, is in the running 
to be America's ambassador to the United Nations. 

George Schultz, Secretary of State under Ronald Reagan, and James Baker, who 
held the same job under George Bush Snr, had been mentioned, as had Brent 
Scowcroft, a former Bush national security adviser, and Kennety Lay, chairman 
of Enron, the Texas energy company. 

But Mr Farish, whose family made a fortune from Texas oil, could hardly be 
better connected for the job. 

Apart from a friendship with the Queen which stretches back at least to 1984, 
when she first stayed at Lane's End Farm, near Lexington, Mr Farish is an old 
and firm friend of the Bush family. 

Coming from one of the oldest oil families in Houston, he has known the 
former president for almost 50 years and they have a long-standing tradition 
of hunting quail at Mr Farish's Lazy F ranch near Beeville, Texas. 

As an investment manager in Houston, he managed the blind trust that Mr Bush 
had to set up when he became vice-president in 1980. 



USA: INTERVIEW - Enron business model almost limitless-Skilling.
By C. Bryson Hull

02/13/2001
Reuters English News Service 
(C) Reuters Limited 2001. 

HOUSTON, Feb 13 (Reuters) - The ink on newly-minted Enron Corp. chief Jeff 
Skilling's business cards was hardly dry on Tuesday before he outlined his 
intention to transform Enron into an even bigger global market-maker. 

"The new vision is going to be 'From the world's leading energy company to 
the world's leading company,' because we believe markets are critical to 
every commodity," Skilling told Reuters in his first interview since assuming 
duties as president and chief executive officer.

Skilling, 47, and Chairman Ken Lay over the past 11 years transformed Enron 
from a gas and power company into a trading powerhouse with interests outside 
the energy sector on their belief that many products can be sold like 
commodities. 

That business model, Skilling said, helped Enron outgrow its old vision of 
becoming "the world's leading energy company." 

"The application is almost limitless because every single business has, at 
its heart, markets," he said. "So if we've got a better market model, we can 
participate in a whole lot of different businesses." 

And so Enron has, as its forays into the marketing of broadband capacity, 
data storage, steel and pulp and paper have shown. 

Skilling said Enron's success in the gas and power businesses is proof his 
company has the wherewithal to take on the biggest companies in 
well-entrenched industries. 

"Enron is an incumbent player's worst nightmare," Skilling "Do you think 
Amoco liked that we were out talking to their customers about buying gas from 
us that we were packaging from other people? No." 
He expects similar reactions from the giants in the paper and steel 
industries. 

"STEADY AS SHE GOES" 
Skilling promises things will be "steady as she goes" during his stewardship, 
which began Tuesday, two months after Lay named his heir apparent CEO and 
decided to stay on as chairman. 

But steady only means Enron's constant flow of innovation will continue, 
Skilling said. 

Enron has quickly become able to remove the complex and costly infrastructure 
around many commodities because of EnronOnline, its Internet trading site 
which has logged more than $400 million in notional trades since starting 16 
months ago. 

"The real advantage of EnronOnline and a whole web-based system is that we 
can create additional scale and options without buying another piece of pipe, 
another generating facility, because we have liquidity," Skilling said. 

"We can create deeper, more reliable, predictable markets than someone that 
doesn't have that capability," he said. 

WHITHER THE PHYSICAL STOCK EXCHANGE? 
Skilling sees EnronOnline, and other competing electronic commodity exchanges 
like smaller rival Dynegy Inc.'s Dynegy Direct, as challengers to the 
hegemony of traditional American markets, where traders still physically work 
on the floor. 

"In every commodity, whether its interest rates, equities, securities, there 
is a battle between exchanges," Skilling said. "The American futures 
exchanges are battling for market share with these new electronic 
approaches." 

Electronic exchanges have the advantage of lower personnel costs and 
flexibility, and Skilling said the succes of all-electronic trading in 
European markets is a harbinger of the U.S.'s trading future. 

"I think its really going to be a function of who can create the most 
liquidity at the lowest price, and that's going to be the market system that 
will win," Skilling said. "We think we have the best."


Contracts save electricity costs, but college natural gas bills soar
By JENNIFER KERR
Associated Press Writer

02/13/2001
Associated Press Newswires 
Copyright 2001. The Associated Press. All Rights Reserved. 

SACRAMENTO (AP) - California's energy crisis could cause higher dormitory 
bills, fewer night and weekend classes and sweltering summer classrooms at 
the state's public colleges, lawmakers learned Tuesday. 

Officials from the state's three college and university systems urged the 
Legislature to provide them with extra money in the 2001-2002 state budget to 
keep their higher energy prices, particularly for natural gas, from hurting 
education.

"It's impacting students, it's impacting learning, it's impacting budgets and 
it's impacting planning," said Ray Giles of the Community College League. 

The University of California paid $26 million for natural gas last year and 
is expecting to pay at least $60 million this year, said Mike Bocchicchio, UC 
assistant vice president for facilities. 

UC has not decided whether to raise dormitory rates to reflect the higher 
cost of heating and cooling dorm rooms, he said. The UC dormitory system is 
designed to be self-supporting, he added. 

"I don't think it's fair to say we're just going to pass the costs along to 
the dorm residents," said Assemblywoman Elaine Alquist, D-Santa Clara, chair 
of the committee. 

California State University's natural gas prices are expected to jump from 
$8.7 million last year to $27.6 million this year, said Assistant Vice 
Chancellor Patrick Drohan. 

Fred Harris of the community colleges' chancellor's office, chancellor's 
office estimated community colleges' costs for electricity and natural gas 
will increase from $68 million last year to $96 million this year. 

Giles said the effect on community college campuses has included a decreased 
number of evening and weekend classes and closing of libraries and other 
resources. 

Assemblywoman Gloria Negrete McLeod, D-Chino, wondered how colleges located 
in the sweltering desert or Central Valley areas could afford air 
conditioning for spring, summer and fall classes without additional state 
support. 

"They can't change nature," she said. 

The Assembly Higher Education Committee held a hearing Tuesday to learn how 
the energy crisis is affecting higher education. The committee took no 
action. Lawmakers are continuing to debate how the state should respond to 
the crisis, and the budget won't be written until next June. 

Most of California's public colleges and universities currently have 
relatively low electricity rates because of long-term contracts signed with 
Enron Energy Services. 

The nine University of California campuses get 58 percent of their 
electricity from Enron through a contract tied to 1998 rates and lasting 
until 2002. 

UC gets the rest of its power from federal or municipal power agencies or 
from cogeneration plants at six campus locations, said Bocchicchio 

California State University also has an Enron contract for its 23 campuses, 
said Drohan. 

The Community College League, a nonprofit corporation that represents 
community college districts, enrolled 36 districts with 49 colleges in a 
similar Enron contract that lasts through 2003, said Giles. 

Statewide, there are 72 locally run community college districts with 108 
campuses. 

Some colleges and universities have been hit by higher electricity bills or 
power outages because they signed up years ago for the utilities' 
"interruptible" programs, which gave them lower rates in exchange for cutting 
power usage during serious shortages. 

There have been at least 14 such shortages since Jan. 1. 

Four CSU campuses and 19 community college districts were part of those 
programs. In some cases they chose not to cut back on power use and face 
fines instead, officials said. 

The interruptible programs were suspended last month by the state Public 
Utilities Commission. 
--- 
On the Net: UC is at http://www.ucop.edu 
CSU is at http://www.calstate.edu 
The community college chancellor's office is at http://www.cccco.edu


Edison Says Banks Mulling Request to Delay Remedies (Update1)
Bloomberg News 2/13/1 18:54 (New York)

Edison Says Banks Mulling Request to Delay Remedies (Update1)

     (Adds more comments after sixth paragraph. For more on the
California electricity crisis, see {EXTRA <GO>}

     Rosemead, California, Feb. 13 (Bloomberg) -- Southern
California Edison Co.'s banks are considering a request to delay
taking action against the utility for defaulting on lines of
credit, an executive of its parent company said.

     ``We have asked the banks to extend the forbearance
agreements that we have with them'' Ted Craver, Edison
International's chief financial officer, said in a conference call
with investors. The banks, led by J.P. Morgan Chase & Co.,
previously provided forbearance through today.

     Craver said the utility and its parent don't have ``any
indication from them yet'' on whether the banks will grant more
time.

     The group of 23 banks have the right to demand accelerated
payments or seek other remedies after Southern California Edison,
California's second-largest utility, failed to make $230 million
of payments on maturing notes last month. That produced a ``cross-
default'' on its lines of credit with the banks.

     ``My view of the relationship with the banks is that it's
strong and that they are generally looking for ways to be
cooperative,'' Craver said. He added he couldn't predict how they
will respond. ``Suffice it to say'' the utility and its parent
asked for a period of forbearance similar to the past one, Craver
said, which lasted almost a month.

     Both the utility and PG&E Corp.'s Pacific Gas & Electric also
defaulted last month on commercial paper, a type of money-market
security.

                        Patience Wearing Thin

     The utilities ran up about $12 billion in debt last year
buying power at higher wholesale prices than they could charge
customers under state laws. The state is buying power on the
utilities' behalf and looking at other ways to deal with the past
debt to keep them from going bankrupt.

     Investors on the call asked about the timetable for proposals
to address the utilities' past debts.

     ``We're not betting the farm (on) getting something'' by
this Friday, Craver said. The utility had about $1.4 billion in
cash at the end of last week, according to Craver.

     Investors on the conference call asked Craver about a comment
by a spokesman for California Governor Gray Davis, who said today
that power generators will be ``patient'' while they await a debt-
repayment plan.

     ``I guess I would have to agree that the generators and
creditors have been very patient,'' Craver said. Still,
``everybody's patience gets thinner as we move forward each
week.''

     No one has petitioned the utility to push it into involuntary
bankruptcy, Craver said, and he called for continuing patience
while acknowledging the pace ``is frustrating'' for everybody
affected by the utility's payment suspension.

                          Financing Unlikely

     ``We're trying to encourage people to stand still and give us
time to work this thing out,'' Craver said. ``It is certainly not
our hope nor our intent'' to go into bankruptcy, which would only
complicate attempts to arrive at solutions, he added.

     In response to a question about when the utility might be
able to get financing again, Edison officials on the call said
issues surrounding the implementation of legislation still need
addressing.

     ``I don't think financing is likely to be available,'' while
there is so much uncertainty, Craver said.

     Uncertainty has arisen, for example, over whether the state
Department of Water Resources will be paying for all the power
purchases for the utilities, or whether some spot purchases still
might be passed along to the utilities in future bills.

     Duke Energy Corp. sued over this issue yesterday, claiming
the California Independent System Operator, which runs about 75
percent of the state's utility grid, continues to deliver
electricity to the utilities without an assurance suppliers will
get paid.

                           Tax-Exempts Paid

     Generators have been willing to sell power on the assumption
``the state's credit was on the hook for those purchases,''
Stephen Pickett, general counsel of Southern California Edison,
said during the teleconference. Edison is seeking clarification on
the matter with the California Public Utilities Commission because
it also believes the ``legislative intent'' was to have the state
covering all the purchases.

     Investors also asked several questions about a decision by
the utility to make recent payments on tax-exempt pollution
control bonds.

     The payments were relatively small and missing them would
have ``immediately'' caused a broader default on all the utility's
first mortgage bonds, said Ken Stewart, an assistant general
counsel for the utility. That would raise the risk of having about
$2 billion of first mortgage bonds subject to acceleration,
Stewart said. By contrast, defaults on certain other utility debt
includes various grace periods and doesn't trigger a default on
other series of bonds, he added.

--Dennis Walters in Ojai, California, at (805) 646-1475, or
dwalters@bloomberg.net, and Mark Lake in New York through the New
York newsroom (212) 318-2300/jm

-0- (BN ) Feb/13/2001 23:54 GMT


Acegas listed on February 28 and aims for telecoms market (Acegas va in Borsa 
il 28 e punta alle tlc) 
Il Sole 24 Ore - Italy; Feb 13, 2001

Acegas SpA, the former municipal utility of Trieste, will be listed on 
Milan's stock market on February 28. The offer will be for 14,889,400 
ordinary shares, equal to 47 per cent of the company's capital. Acegas is 
looking to expand into the energy supply market in neighbouring Slovenia and 
Croatia and may also enter the competition to buy one of the gencos put on 
the market by Italian electricity group Enel SpA. It aims to diversify as 
much as possible in order to become a multi-utility, with its eye on 
Estenergy, the consortium of utilities of Udine, Trieste, Gorizia and Enron 
Corp of the US, and in particular, Italian regional telephone company Estel. 

Acegas generated a net profit of L17bn in 1999, and forecasts a slight 
increase for the year 2000. Over the next three years, it will aim for a 12 
per cent growth in its gross operating margin and 9 per cent of ROI. 

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