USA: New Power adds 20 percent to customer base with two deals.
Reuters English News Service, 07/05/01
GERMANY: German utilities should expand abroad - consultant.
Reuters English News Service, 07/05/01
NewPower Hldgs To Buy AES Corp Unit
Dow Jones News Service, 07/05/01
INDIA: Belgium's Tractabel to divest India stake-paper.
Reuters English News Service, 07/05/01

TransAlta sells power unit: $850M deal: Final step in retreat from regulated 
electricity industry
National Post, 07/05/01
WORLD NEWS - LATIN AMERICA AND THE CARIBBEAN - Brazil plans for emergency 
energy supply.
Financial Times, 07/05/01
In India, Other Firms Feel Enron's Pain --- Some Are Trying to Help Resolve 
the Dispute Over Dabhol Project
The Wall Street Journal, 07/05/01 
Efforts by Enron and Indian State To Revive Dabhol Result in Logjam --- Some 
Foreign Lenders to Electricity Project Strive to Resolve Conflict
The Wall Street Journal Europe, 07/05/01
DENMARK: Enron says may spin off wind power arm this year.
Reuters English News Service, 07/04/01
Guest Host Continued
CNNfn: Market Coverage - Morning, 07/04/01
UK: Enron extends bid deadline in UK gas entry system.
Reuters English News Service, 07/04/01
Enron Extends UK Virtual Gas Capacity Auction Deadline
Dow Jones Energy Service, 07/04/01
JAPAN: Korea Aluminium-Imports seen cheaper than govt stock sales.
Reuters English News Service, 07/04/01
Decision on judicial probe on Enron issue by July 11
Reuters English News Service, 07/04/01
DPC receives one week extension over HC's July 10 deadline
Press Trust of India Limited, 07/04/01
Lenders for splitting DPC assets to cut takeover cost
Business Standard, 07/04/01
Water treatment contract approved
Houston Chronicle, 07/04/01 
Ex-Houston judge to be special counsel / Andell to advise education secretary
Houston Chronicle, 07/04/01 
Gas rates plunging
Lethbridge Herald, 07/04/01
Fimat USA's Kilduff: Oil Prices, OPEC and Stock Picks
Bloomberg, 07/05/01

India Risks Lower Rating If Budget Deficits Grow, S&P Says
Bloomberg, 07/05/01

S&P's Mukherji on Risk of Lower Rating for India: Comment
Bloomberg, 07/05/01

Indian Oil Companies Cut Naphtha Price, Paper Says (Correct)
Bloomberg, 07/05/01

India Risks Lower Rating If Deficits Grow, S&P Says (Update1)
Bloomberg, 07/05/01


USA: New Power adds 20 percent to customer base with two deals.

07/05/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW YORK, July 5 (Reuters) - New Power Co., a national energy provider partly 
owned by powerhouse Enron Corp., on Thursday increased its customer base by 
about 20 percent and its visibility in Pennsylvania and Ohio with two 
separate acquisitions. 
Financial terms were not disclosed.
New Power, a unit of NewPower Holdings Inc. , which was formed to take 
advantage of electricity deregulation, added a total of 121,000 electric and 
natural gas customers to its customer base of about 615,000. 
New Power said it signed an agreement to buy the customer base and related 
assets of AES Direct, the retail marketing subsidiary of independent power 
company AES Corp. , which includes natural gas inventory, supply and 
transportation contracts as well as billing and customer service operations. 
It also bought Ohio-based customers from CoEnergy, a unit of Michigan-based 
DTE Energy , gaining entry into service areas of four additional utilities. 
Shares of New Energy closed at $8.75 on Tuesday, well below its 52-week high 
of $28.69 but above its low of $4.63.

GERMANY: German utilities should expand abroad - consultant.

07/05/2001
Reuters English News Service
(C) Reuters Limited 2001.

COLOGNE, Germany, July 5 (Reuters) - Germany's top utilities lag far behind 
major foreign rivals in the share of revenues derived internationally, which 
could limit future growth, a consultant told an industry conference on 
Thursday. 
"Germany's market leaders lag behind in their market presence in Europe and 
the rest of the world," said Volker Flegel, a European energy expert at 
consultancy A.T. Kearney's Munich office.
"If they don't act fast, the gap will widen....They have to adopt more of a 
pan-European perspective," he said, singling out Spain as the most attractive 
investment target. 
Flegel said revenues generated outside Germany by the country's top four 
utilities ranged between 3.0 percent of turnover at HEW, to 11 percent at 
E.ON, 11.7 percent at RWE. 
By comparison, the shares of foreign sales at U.S. energy groups TXU and 
Enron were 36 percent and 18.6 percent. Foreign sales contributed 18.6 
percent to turnover at French/Belgian group Electrabel and 18.3 percent at 
France's EdF. 
Flegel pointed out that expansive internationalisation, which began in the 
late 1980s, has already had helped some German utilities achieve annual sales 
growth of up to 30 percent. 
Both RWE and E.ON have made forays into the British market, and are currently 
bidding for stakes in Spanish firms, along with EnBW. 
Flegel said the return on electricity sales in the Spanish market was two to 
four times higher than in Germany. Spain's annual consumption growth in 
recent years has reached as much as six percent. 
In addition, Spain could be used as a bridgehead for acquisitions in Latin 
America, where the firms are already involved, he said. 
Apart from Spain, A.T. Kearney identified a list of countries it viewed as 
attractive both in size and market conditions for foreign entrants - 
including France, Italy, Finland, Britain, Poland, Sweden and, outside 
Europe, the United States and Brazil. 
In the dynamic Italian market, newcomers by 2003 should have captured already 
one quarter of the market, Flegel said. 
In central Europe, Swiss companies will be the engines behind sale growth in 
the trading of power, through their hydropower capacities and its 
shareholdings in French power firms. 
The Scandinavian markets are lucrative, although comparably small, because 
their per-capita power usage is three to five times higher than in the rest 
of Europe, Flegel said. This is partly due to ample supply and low prices, 
which encourage consumers to use electric power for home heating. 
The growth potential in eastern Europe comes from projected consumption rises 
of 27.1 percent annually between 1996 and 2005. Prices have not risen so far, 
but Flegel said he expects increases in the medium term.


NewPower Hldgs To Buy AES Corp Unit

07/05/2001
Dow Jones News Service 
(Copyright (c) 2001, Dow Jones & Company, Inc.) 

PURCHASE, N.Y. -(Dow Jones)- NewPower Holdings Inc.'s (NPW) New Power Co. 
unit agreed to acquire the customers and related assets of AES Corp.'s (AES) 
AES Power Direct retail marketing unit. 
In a press release Thursday, NewPower Holdings also said it agreed to acquire 
the customers and natural gas inventory, related to the Columbia Gas of Ohio 
and Dominion East Ohio gas customer choice programs, of CoEnergy Trading Co., 
a unit of DTE Energy Co. (DTE).
Financial terms of both deals weren't disclosed. 
Together, the deals significantly expand NewPower's presence in Ohio, where 
the company will add over 82,000 natural gas and electric customers, and in 
Pennsylvania, where NewPower will add about 38,000 natural gas customers.

INDIA: Belgium's Tractabel to divest India stake-paper.

07/05/2001
Reuters English News Service 
(C) Reuters Limited 2001. 

BOMBAY, July 5 (Reuters) - Yet another foreign power firm is bailing out of 
India, several financial newspapers reported on Thursday. 
Belgian power firm Tractabel plans to sell its stake in a joint venture with 
India's Jindal Vijaynagar Steel Ltd , both The Economic Times and the Times 
of India said.
Tractabel, a subsidiary of the giant French water and power utility company 
Suez Lyonnaise des Eaux SA , will receive 2.35 billion rupees ($49.9 million) 
for its 50 percent stake in Jindal Tractabel Power Company and reimbursement 
of development expenses. 
The Economic Times said lenders to the project would buy a 38 percent stake 
in Jindal Tractabel, while the Jindal group would buy the remaining 12 
percent from Tractabel. 
The Times of India put the sale price at two billion rupees, and provided a 
more detailed description of the terms of the sale to Indian financial 
institutions and O P Jindal Group companies. 
The financial institutions were identified as the Industrial Development Bank 
of India (IDBI) and ICICI Ltd , and the O P Jindal group companies as Saw 
Pipes and Jindal Power. 
A senior offical of the Jindal group, founders of JVSL, declined to comment 
when contacted by Reuters. 
The joint venture owns a 260 MW power plant at Bellary in the southern state 
of Karnataka, and supplies power to a nearby JVSL steel unit. 
Tractabel's exit from India comes at a time when U.S. giant Enron Corp is 
locked in a battle with a utility in India's Maharashtra state, which has 
defaulted on $48 million in power payments. 
Other international power firms have also found the going tough in India due 
to regulatory delays and litigation. 
US firm Cogentrix exited a 1,000-MW project in Karnataka in 1999, Electricite 
de France scrapped plans for a 15 percent stake in a $1.4 billion project in 
Maharashtra last year, and South Korea's Daewoo Corp abandoned a 1,070 MW 
project in central India. 
($1=47.12 Indian rupees).

Financial Post
TransAlta sells power unit: $850M deal: Final step in retreat from regulated 
electricity industry
Carol Howes
Financial Post, with files from The Canadian Press

07/05/2001
National Post 
National
C01 / Front
(c) National Post 2001. All Rights Reserved. 

CALGARY - TransAlta Corp. has struck an $850-million deal to sell its power 
transmission business to a consortium of companies led by SNC-Lavalin Inc. 
and the Ontario Teachers' Pension Plan Board. 
The sale is the final step in TransAlta's program to divest about $2-billion 
in assets during the past two years as it retreated from the regulated power 
industry and focused on electrical generation and marketing.
"It was challenging," said Steve Snyder, TransAlta's president and chief 
executive, yesterday. "This is it, in terms of the core restructuring." 
TransAlta expects to realize earnings from the sale of about $100-million, or 
60 cents per share, which will be put toward the expansion of power 
generation plants in Canada and Mexico. 
The Calgary-based electric company has plans to spend up to $1.5-billion a 
year over the next five years to bulk up on its power generation, nearly 
doubling its 8,000 megawatts of capacity. 
Mr. Snyder said TransAlta will focus on ensuring its generation assets meet 
its target of a 15% return on equity. If they don't, those assets could also 
come under review, he said. 
The sale comes as Enron Corp., the biggest energy trader in North America, 
has begun selling electricity and natural gas to consumers in Alberta. 
The electricity industry opened to competition on Jan. 1. The move prompted 
ATCO Ltd. to follow TransAlta and put its retail electricity and gas units up 
for sale. 
The consortium buying the transmission assets, known as AltaLink, sees the 
potential to expand the system both inside and outside Alberta, said Mr. 
Snyder. 
The group also includes Trans-Elect Inc., a new U.S.-based independent power 
transmission company that is keen to add additional transmission capacity to 
the North American power grid, and Macquarie North America Ltd., an 
Australian-owned investment bank. 
Mr. Snyder said TransAlta's transmission assets attracted interest from U.S. 
and international firms, but he was always hopeful a Canadian buyer could be 
found. 
Under the agreement, the teachers pension fund will assume all the 
transmission business's debt. 
"Infrastructure investments are attractive to us because they will give us 
stable, real return," said Ontario Teachers' Pension Plan spokeswoman Lee 
Fullerton. "They're fairly low-volatility because they're regulated by 
government, so they give us a very stable cash flow and they're linked to 
inflation." 
Teachers' pensions are also indexed to inflation and this made the investment 
-- the pension plan's first large infrastructure deal -- attractive, Ms. 
Fullerton said. 
"This acquisition is a milestone occasion for SNC-Lavalin since it is an 
important investment in Alberta," said Pierre Anctil, an executive 
vice-president at the Montreal company. 
"By combining the strengths of the TransAlta team with our considerable 
financial and technical expertise, we are well-placed to deliver top-quality 
transmission services to Albertans, and meet current and future needs." 
Mr. Snyder said in May at the company's annual meeting that it was looking to 
sell its heavily regulated transmission business, which accounts for about 
half of Alberta's power grid and 10% of the company's assets. It has 250 
employees. 
The company owns and operates more than 11,000 kilometres of high-voltage 
lines in southern Alberta. 
Under the deal, SNC will own 50% of the equity, the Ontario Teachers Pension 
Plan Board about 25% and Macquarie North America, about 15%. 
Trans-Elect will be brought in to operate the transmission lines and will own 
10% of the equity. 
Karen Taylor, an analyst at BMO Nesbitt Burns in Toronto, said the value of 
the assets was in line with what analysts expected. 
"It is at present time a relatively low-return, stable business," she said. 
Nick Majendie , a Vancouver analyst with Canaccord Capital Corp., said 
TransAlta has done a good job executing its plan to restructure and expects 
the latest sale to be well received by investors. 
TransAlta started down the road to becoming a pure play when it sold its 
retail electricity business and local power lines to Kansas City-based 
Utilicorp United Inc. for $860-million. 
UtiliCorp subsequently sold the retail electricity business to Edmonton's 
municipally owned Epcor Utilities Inc. for $110-million. 
SNC-Lavalin is one of the world's biggest engineering and construction 
companies with offices in 30 countries. The Montreal-based company also owns, 
partly owns or manages infrastructure, ranging from the 407 toll highway 
north of Toronto to other projects. 
The Ontario Teachers' Pension Plan, with assets of more than $70-billion, is 
Canada's second biggest pension fund and handles the retirement investments 
of Ontario's 230,000 active and retired teachers.

WORLD NEWS - LATIN AMERICA AND THE CARIBBEAN - Brazil plans for emergency 
energy supply.
By RAYMOND COLITT and GEOFF DYER.

07/05/2001
Financial Times 
(c) 2001 Financial Times Limited . All Rights Reserved 

But the government will still face a delicate decision over when to suspend 
rationing, and lifting restrictions early could backfire. Geoff Dyer and 
Raymond Colitt report. 
Brazil plans to have an emergency supply of around 3,000MW of energy in place 
by April next year from sources such as crushed sugar cane to reduce the risk 
of a new round of rationing next year, according to energy officials.
The spectre of widespread blackouts has faded amid strong public response to 
the enforced rationing measures introduced last month by the government. But 
attention is now turning to medium and long-term solutions to the energy 
crisis. 
Pedro Parente, the minister charged with resolving the energy crisis, said 
the extra power would be in addition to around 3500MW of new gas-fired 
capacity expected to be online by next year and would reduce the pressure on 
the energy system if another drought occurred over the summer months. 
"Rationing next year cannot be completely ruled out but we are working to 
limit the risk as much as possible," Mr Parente said in an interview. 
Having seen its approval ratings plummet because of the energy crisis, the 
government is desperate to avoid another round of rationing this time next 
year, which would fall during the presidential election campaign. 
The emergency supply measures will supplement the longer-term energy strategy 
to be outlined today by President Fernando Henrique Cardoso, which will lean 
heavily on a rapid expansion in gas-fired power stations. 
Mr Parente said that by 2003, there would be sufficient new capacity in place 
so there would be no need for rationing by then. 
The extra energy supply for next year will include alternative energy 
sources, such as generators fuelled by crushed sugar cane and wind power. 
Full details of the programme would be ready by early August, he said. 
Even with these measures and the new gas power stations, however, the outlook 
for next year will still hinge on the level of rainfall during the wet summer 
months from October to March. Around 90 per cent of Brazil's energy comes 
from hydro-electric plants that are powered by water from reservoirs. 
During the last summer, rainfall was 71 per cent of its historic average, a 
level of rain that has been exceeded in all but 14 of the last 70 years. The 
north-east, the worst affected area, had only received such little rain in 
three of the last 70 years. 
According to initial estimates, Mr Parente said that with the expected 
increase in supply from gas-fired plants, there would probably be no need for 
rationing next year if rainfall reached 76 per cent its historic average over 
the summer. If rainfall was below that figure, then the emergency supply 
measures would limit the extent of a new rationing programme. 
Questions remain, however, over how many new gas-fired plants will be in 
place by next year. El Paso and Enron, the US power companies, could put a 
total of 890MW on line by 2002, but say they are waiting to find out more 
about the regulations they will face. 
Regardless, some experts say the need for compulsory rationing next year 
could be reduced as companies and consumers discover the potential for 
permanent energy savings, thereby limiting the rebound in demand if 
restrictions are lifted. 
But even if the government brings on the necessary new capacity and rainfall 
does not disappoint, it will still face a delicate decision over when to 
suspend rationing. "Lifting restrictions prematurely could backfire 
politically and technically," says Mauricio Tolmasquim, an energy expert at 
the Federal University of Rio de Janeiro. 
(c) Copyright Financial Times Ltd. All rights reserved. 
http://www.ft.com.

Politics & Economy
Efforts by Enron and Indian State To Revive Dabhol Result in Logjam --- Some 
Foreign Lenders to Electricity Project Strive to Resolve Conflict
By Daniel Pearl
Staff Reporter

07/05/2001
The Wall Street Journal Europe 
2
(Copyright (c) 2001, Dow Jones & Company, Inc.) 

BOMBAY -- Once touted as a beacon for attracting foreign investment to India, 
Enron Corp.'s $3 billion (3.54 billion euro) Dabhol Power Co. project has 
turned into a nuisance for some foreign companies doing business in the 
country. 
Behind the scenes, some of them are now maneuvering to help resolve a dispute 
between Dabhol and the Indian state of Maharashtra that is at the core of the 
project's problems.
The largest foreign investment ever in India, Dabhol is now mired in 
conflict. The state of Maharashtra, Dabhol's largest customer, has stopped 
purchasing power from the 740-megawatt project, saying that the tariffs are 
too high. Work has stopped on a nearly completed second phase of the project 
slated to generate 1,444 megawatts. Enron, which controls 65% of the project, 
has tried unsuccessfully to scale back its stake, and may be looking to exit 
entirely. 
In an effort to get the project back on track, some of the electricity 
project's foreign lenders -- including ABN Amro, Bank of America and Credit 
Suisse First Boston -- sent representatives to a recent meeting here with 
Maharashtra's electricity board. Dabhol's difficulties are making lenders 
wary about funding other power projects in the country, and could make states 
bolder about seeking new contract terms. 
That has left other power companies increasingly nervous about Dabhol. Some 
have signaled they could be interested in taking over Dabhol if its contract 
problems can be settled. Dabhol participants still aren't sure if the 
interest is sincere, or an attempt to prevent collateral damage to their own 
projects. India's Reliance Industries Ltd., which in partnership with 
Southern Co. of the U.S. is hoping to build a big plant in eastern India, 
doesn't deny media speculation that it is interested in Dabhol. Nor does AES 
Corp., whose generating company has had disputes with customers in India's 
Orissa state. 
Prakash Daryani, managing director for Houston-based El Paso Corp.'s Indian 
power unit, says if the Dabhol contract isn't resolved in a way that makes 
both the utility and its customer happy, "it will have an adverse impact" on 
other investments, and "El Paso will not be an exception." 
He denies reports that El Paso, which helped build a 340-megawatt plant in 
southern India, has expressed interest in buying Dabhol, but adds, "We are 
keeping our eyes and ears open." 
Some companies may be doing more than that. Patrick Sonti, an energy 
consultant in New Delhi, says he helped draft a plan outlining a way out of 
the Dabhol impasse, with price concessions on both sides and financial 
separation of Enron's liquefied-natural-gas terminal from the power plant. 
Mr. Sonti says he studied Dabhol for a client whose name he can't disclose. 
Mr. Sonti also is chairman of an American Chamber of Commerce committee on 
energy, and he acknowledges discussing his Dabhol plan with some of the 
panel's members. He says the chamber wouldn't intervene unless asked by Enron
. 
Last time the project ran into political trouble, Enron executives saved it 
through a intensive lobbying campaign, aided by U.S. officials. Next week, 
the company's chairman, Kenneth Lay, is expected to fly to India, though 
Enron won't comment on whom he intends to visit. 
Even though officials from Enron and Maharashtra have met regularly, their 
dispute has fallen into a slow-motion stalemate, with Enron saying it hasn't 
agreed to renegotiate the contract and the state insisting it has already 
rescinded the contract. Despite warnings that construction delays will 
increase the project's cost by up to $400 million, Vinay Bansal, chairman of 
the electricity board, said Monday that getting the project's second phase 
running is "not a priority for us," since the state can't afford the power. 
The Dabhol contract requires the state to pay for most of the plant's 
generating capacity regardless of how much power it consumes. Maharashtra's 
consumption has been far below projections. 
Mr. Bansal wants India's central government to help buy excess power from 
Dabhol, but "they keep saying no." Other states would be willing to buy power 
if the rates could be lowered to 2.50 rupees (6.3 European cents) a unit, but 
that is still well below Dabhol officials' most optimistic projection. 
Meanwhile, India's regulators and courts are throwing in new twists. The 
Maharashtra Electricity Regulatory Board, set up as an independent body to 
regulate electricity rates, is seeking jurisdiction over the Dabhol dispute, 
even though the board was created after the contract was signed. Enron wants 
an arbitration panel to decide, instead. A Bombay judge last week made a 
ruling that is likely to send the jurisdiction battle to India's Supreme 
Court. 
If Enron loses that battle, it is likely to lose more time. "We'll make the 
process totally transparent," P. Subramanyam, chairman of the Maharashtra 
Electricity Regulatory Board, promised in an interview earlier this year 
But if Dabhol construction doesn't resume by summer's end, Enron's 
liquefied-natural-gas suppliers are likely to get nervous. Dabhol has 20-year 
contracts requiring it to buy liquefied natural gas from Abu Dhabi and from 
Oman starting next year. Royal Dutch/Shell Group, which has a 30% stake in 
Oman LNG, says it "would expect" Dabhol to honor its obligations. An Enron 
spokesman said gas suppliers are "obviously concerned about what's going on," 
but that the issue hasn't yet come to a head. 
Concerned Suppliers 
As for the lenders, Indian banks have more to lose than foreign banks if 
Dabhol, starved of revenue, continues to miss payments. That is because much 
of the foreign debt is guaranteed by the Indian banks, led by 
state-controlled Industrial Development Bank of India. For the project's 
second phase, foreign debt totals nearly $1.1 billion and domestic debt about 
$330 million. Lenders haven't agreed to inject more funds to allow 
construction to resume. 
"I don't think there is any division among lenders at the moment as to what 
should be done," says one international lender involved in the talks. "But 
this is not an easy workout, having so many parties involved in so many parts 
of the world."

International
In India, Other Firms Feel Enron's Pain --- Some Are Trying to Help Resolve 
the Dispute Over Dabhol Project
By Daniel Pearl
Staff Reporter of The Wall Street Journal

07/05/2001
The Wall Street Journal 
A8
(Copyright (c) 2001, Dow Jones & Company, Inc.) 

BOMBAY, India -- Once touted as a beacon for attracting foreign investment to 
India, Enron Corp.'s $3 billion Dabhol Power Co. project has turned into a 
nuisance for some foreign companies doing business in the country. 
Behind the scenes, some of them are now maneuvering to help resolve a dispute 
between Dabhol and the Indian state of Maharashtra that is at the core of the 
project's problems.
The largest foreign investment ever in India, Dabhol is mired in conflict. 
The state of Maharashtra, Dabhol's only customer, has stopped purchasing 
power from the 740-megawatt project, saying its rates are too high. Work has 
stopped on a nearly completed second phase of the project slated to generate 
1,444 megawatts. Enron, which controls 65% of the project, has tried 
unsuccessfully to scale back its stake and may be looking to exit entirely. 
In an effort to get the project back on track, some of the electricity 
project's foreign lenders -- including ABN Amro, Bank of America and Credit 
Suisse First Boston -- sent representatives to a recent meeting here with 
Maharashtra's electricity board. Dabhol's difficulties are making lenders 
wary about funding other power projects in the country, and could make states 
bolder about seeking new contract terms. 
That has left other power companies increasingly nervous about Dabhol. Some 
have signaled they could be interested in taking over Dabhol if its contract 
problems can be settled. Dabhol participants still aren't sure if the 
interest is sincere or is an attempt by the other companies to prevent 
collateral damage to their own projects. India's Reliance Industries Ltd., 
which in partnership with Southern Co. of Atlanta is hoping to build a big 
plant in eastern India, doesn't deny press speculation that it is interested 
in Dabhol. Nor does Arlington, Va.-based AES Corp., whose generating company 
has had disputes with India's Orissa state. 
Prakash Daryani, managing director for Houston-based El Paso Corp.'s Indian 
power unit, says that if the Dabhol contract is not resolved in a way that 
makes both the utility and Maharashtra happy, "it will have an adverse 
impact" on other investments, and "El Paso will not be an exception." He 
denies reports that El Paso, which helped build a 340-megawatt plant in 
Southern India, has expressed interest in buying Dabhol, but adds: "We are 
keeping our eyes and ears open." 
Some companies may be doing more than that. Patrick Sonti, a New Delhi-based 
energy consultant, said he had helped draft a plan outlining a way out of the 
Dabhol impasse, with price concessions on both sides and financial separation 
of Enron's liquefied-natural gas terminal from the power plant. Mr. Sonti 
says he studied Dabhol for a client whose name he can't disclose. Mr. Sonti 
also chairs an American Chamber of Commerce committee on energy, and he 
acknowledges discussing his Dabhol plan with some of the panel's members. He 
says the Chamber wouldn't intervene unless asked by Enron. 
Last time the project ran into political trouble, Enron executives saved it 
through an intensive lobbying campaign, aided by American officials. Next 
week, the company's chairman, Kenneth Lay, is expected to fly to India, 
though Enron won't comment on whom he intends to visit. 
Even though Enron and Maharashtra officials have met regularly, their dispute 
has fallen into a slow-motion stalemate, with Enron saying it hasn't agreed 
to renegotiate the contract and the state insisting it has already rescinded 
the contract. Despite warnings that construction delays will increase the 
project's cost by up to $400 million, Vinay Bansal, chairman of the 
electricity board, said Monday that getting the project's second phase 
running is "not a priority for us," since the state can't afford the power. 
The Dabhol contract requires the state to pay for most of the plant's 
generating capacity regardless of how much power it consumes. Maharashtra's 
consumption has been far below projections. 
Mr. Bansal wants India's central government to help buy excess power from 
Dabhol, but "they keep saying no." Other states would be willing to buy power 
if the rates could be lowered to 2.50 rupees a unit, but that's still well 
below Dabhol officials' most optimistic projection. 
Meanwhile, India's regulators and courts are throwing in new twists. The 
Maharashtra Electricity Regulatory Board, set up as an independent body to 
regulate electricity rates, is seeking jurisdiction over the Dabhol dispute, 
even though the board was created after the Dabhol contract was signed. Enron 
wants an arbitration panel to decide, instead. A Bombay judge issue a ruling 
last week that is likely to send the jurisdiction battle to India's Supreme 
Court. 
If Enron loses that battle, it is likely to lose more time. "We'll make the 
process totally transparent," the chairman of the Maharashtra Electricity 
Regulatory Board, P. Subramanyam, promised in an interview earlier this year. 
But if Dabhol construction doesn't resume by summer's end, Enron's suppliers 
of liquefied natural gas are likely to get nervous. Dabhol has 20-year 
contracts requiring it to buy liquefied natural gas from Abu Dhabi and from 
Oman starting next year. As for the lenders, Indian banks have more to lose 
than foreign banks if Dabhol, starved of revenue, continues to miss payments. 
That is because much of the foreign debt is guaranteed by the Indian banks, 
led by state-controlled Industrial Development Bank of India. For the 
project's second phase, foreign debt totals nearly $1.1 billion, and domestic 
debt about $330 million. Lenders haven't yet agreed to inject more funds to 
allow construction to resume. 
"I don't think there is any division among lenders at the moment as to what 
should be done," says an international lender involved in the talks. "But 
this is not an easy workout, having so many parties involved in so many parts 
of the world."

DENMARK: Enron says may spin off wind power arm this year.

07/04/2001
Reuters English News Service 
(C) Reuters Limited 2001. 

COPENHAGEN, July 4 (Reuters) - U.S. energy firm Enron Corp. may spin off its 
wind power unit Enron Wind as early as this year, Enron Wind managing 
director Andreas Reuter said on Wednesday. 
"Enron has a plan to sell off its assets - not linked to trading - and Enron 
Wind is considered an asset. We might find a solution this year," he said.
"The most likely outcome is for a financial investor to take over the company 
and launch an IPO in two years time," he said on the sidelines of a five-day 
European Wind Energy Conference and exhibition in Copenhagen. 
Earlier this year European private equity company Doughty Hanson & Co bought 
wind-power blade manufacturer Danish LM Glasfiber for an undisclosed sum, 
saying it planned to launch an IPO in five years. 
Enron Wind is focusing expansion plans on the Netherlands, Ireland, France 
and Britain, Reuter said. 
At present Enron Wind has production capacity in Europe's core wind markets 
Germany and Spain and has its eyes on Britain. 
"If the British market starts moving, we would consider manufacturing blades 
over there," he added. 
Enron had a six percent market share of the world market for installed wind 
turbines in 2000, while the world's largest wind turbine maker Danish Vestas 
Wind Systems had a market share of 18 percent. 
Spanish firm Gamesa Group's Gamesa Eolica - in which Vestas holds a 40 
percent stake - and Danish rival NEG Micon each hold 14 percent of the market.

Business
Guest Host Continued
Fred Katayama, Valerie Morris

07/04/2001
CNNfn: Market Coverage - Morning 
(c) Copyright Federal Document Clearing House. All Rights Reserved. 

FRED KATAYAMA, CNNfn ANCHOR, TALKING STOCKS: We`re back TALKING STOCKS. 
VALERIE MORRIS, CNNfn ANCHOR, TALKING STOCKS: And the person we`re speaking 
with is Michael Carty of New Millennium advisors. You can call or e-mail your 
question. The phone number is 1(800)304-fnet. The e-mail address is 
moneygang@cnnfn.com
KATAYAMA: And our first caller, not fist caller but towards the end of our 
show our caller is for this segment the first caller. That honor goes to 
Roseanne in New York. Hi, Roseanne. 
MORRIS: New Mexico I think 
KATAYAMA: Oh, in New Mexico that`s right. 
CALLER: Good afternoon. I would appreciate your near and long term comments 
on Enron (URL: http://.www.enron.com/) . 
CARTY: OK. Now see Enron is a classic example of what I`ve been discussing. 
Enron is a wonderful company. it`s well diversified primarily in natural gas 
area and it`s a very well managed company. It`s high diversified 
geographically here in the United States and it`s a company that should 
benefit enormously by any improvement in the energy policy here in the United 
States. And look at where that price is. I mean we`re talking about the 
market giving that stock away at this point. 
KATAYAMA: Plus Enron had been in that deal with, if I remember correctly, 
Blockbuster (URL: http://www.blockbuster.com/) to deliver video through its 
lines and that deal fell apart. 
CARTY: That`s right. But it really didn`t need it because quite frankly this 
is a diversified energy company that will benefit through any improvement in 
energy policy in this country, any improvement. 
MORRIS: We have a caller from Louisiana joining us now. Jim, hi. What`s your 
question? 
CALLER: Yes. My question is pertaining to alternative energy and particularly 
fuel sale and if you`re not real hot on that you might give us a couple of 
picks concerning any of the drillers or oil services. Thank you. 
CARTY: OK. First off I like the idea of alternative energy. I came into this 
industry in `73, `74 out of school and that was a brutal time when we had our 
oil embargo and our energy crisis and alternative energy was a very big 
option at the time. You could do it through win. You could do it through 
sales. I liked the idea of doing it through sales, but remember plaices like 
Florida have about as much rain fall as Pennsylvania and therefor they have a 
lot of cloudy days and you could only use sales effectively in those states 
where you have an awful lot of sun such as the southwest. So, there are only 
of limited use So, I think that our -- the true measure of our progress in 
coming up with an energy solution is ultimately to go that way, but over the 
short term to do some drilling and those two cases I like KaraMagee (ph) and 
then Adorical (ph) Petroleum. They`re both well placed. They both work in 
drilling area and I think that at these prices they`re - this is a good entry 
point. 
KATAYAMA: Mike our guest in the last hour, Jim Waggoner touched upon this 
stock as one of his favorites, the storage stock EMC (URL: 
http://www.emc.com/) . We have an e-mail and our e-mailer wants to know your 
view on this stock. 
CARTY: As a matter of fact, when Jim was here and was talking - he was 
basically talking about the stocks that I love. EMC despite he look of that 
chart is one of them. EMC is very, very big on storage technology. In fact, 
years ago it was probably one of the least sophisticated in that industry and 
it rapidly overcame storage tech and certainly IBM (URL: http://www.ibm.com/) 
to the point where they had all of these installations. They put them in - 
they were replacing their own, they were rebuilding equipment, computers, 
putting their equipment in substituting it for IBM`s. They have a lot of 
installations. They`re technology - In doing that, their technology grew and 
grew and grew and they finally became one of the most sophisticated and 
certainly the best placed in the industry and at these prices as soon as the 
market, you know, as the market turns around this is a stock that`s really 
going to move. 
MORRIS: We have another caller. Jeff from Illinois, thanks for joining us. 
What`s your question? 
CALLER: Good afternoon. I wanted to know Mike`s comments on Walgreen (URL: 
http://www.walgreens.com/) on the short and long term. Thank you. 
CARTY: Wallgreen is, first of all I always shop there. I love the place. 
And you know, if I were going to listen to most analysts and portfolio 
managers they say if you like the place then you really should be investing 
in it. It happens to be a reasonably well run company. It`s good in terms of 
consumer staples. I mean they`ll probably give - despite the fact that it has 
dropped in price recently it will probably give you a much more stable 
investment than others and as a consequence if I were holding it I`d continue 
to hold it. If it drops any more I`ll certainly consider buying it. 
KATAYAMA: And we`ve got an e-mail question about Compaq (URL: 
http://www.compaq.com/) the PC company as well as the storage company as well 
as the server manufacturer. 
CARTY: I know. We`re holding Compaq, but Compaq is a very, very difficult 
thing to love because of its performance, as you see on the chart. Also 
Compaq is kind of interesting because Dell sells directly to or sells desk 
tops directly to the investor, the user, the ultimate user. Gateway (URL: 
http://www.gateway.com/) was doing the same thing until now Gateway has 
stared to pen these retail stores so that people could go in and demonstrate 
the system. 
Coimpaq, of course, was the leader in desk top sales simply because it was 
able to go into places like CompUSA and they had a massive distribution 
network. Well, the users have become much more sophisticated. Now they like 
to go to places like Dell. They like to go to places like Gateway. As a 
consequence Compaq has suffered somewhat. Also with respect to the servers 
it`s only now that it`s starting to look reasonably good in servers. But if I 
wanted to do a server play, you know, instead of Cisco I`d do Dell because 
Dell equipment is very good. Dell makes a very good server. 
So, while I would continue to hold Compaq because I believe it does represent 
a significant portion of the industry I don`t think that it`s something that 
I would just represent that sector with that one stock. 
MORRIS: Michael, thank you so much for spending part of your 4th of July with 
us. You handled a lot of calls and e-mails too. 
CARTY: It`s been a pleasure. 
MORRIS: OK. And the word is just be cautious. Don`t rush into the market and 
go after those industry leaders. 
CARTY: That`s right. 
MORRIS: Michael Carty from New Millennium Advisors, thank you so much. 
CARTY: You`re quite welcome 
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UK: Enron extends bid deadline in UK gas entry system.

07/04/2001
Reuters English News Service 
(C) Reuters Limited 2001. 

LONDON, July 4 (Reuters) - U.S. utility Enron has extended by nearly a month 
the deadline for bids into a new market for bringing offshore gas onto the UK 
gas pipeline network, the company said on Wednesday in a statement. 
Due to high levels of interest in its EnCap market, Enron has extended the 
deadline for bids to 1200 noon local time on August 7, 2001 from a previous 
deadline of July 9, 2001.
The first start date for contracts remains October 1, 2001. 
EnCap allows companies to supply gas in the UK from offshore without having 
to secure access rights to the national gas pipeline system. 
Using EnCap, companies can supply gas to Enron at beach terminals and receive 
the same quantity of gas at the national balancing point, a notional point in 
the UK gas trading market, without needing to buy entry capacity rights. 
Enron will buy the access rights to bring the gas into the pipeline system. 
EnCap is sold in lots of 10,000 therms with a minimum transaction size of 10 
lots (100,000 therms) a day for five or more consecutive years. 
Britain auctions access rights to the gas pipeline system, owned by Lattice . 
Prices rose sharply in the last series of auctions, especially at the St 
Fergus terminal in Scotland as shippers worried about guaranteeing getting 
enough capacity to bring all their gas ashore.

Enron Extends UK Virtual Gas Capacity Auction Deadline

07/04/2001
Dow Jones Energy Service 
(Copyright (c) 2001, Dow Jones & Company, Inc.) 

LONDON -(Dow Jones)- Energy company Enron Europe Ltd. (U.ENE) said Wednesday 
it has extended the deadline for the virtual U.K. natural gas pipeline entry 
capacity auction on its EnCap system because of the high level of interest. 
Final bids are due by 1100 GMT Aug. 7, with the first start date for the 
services unchanged at Oct. 1, the company said.
The original deadline had been set for July 9. 
EnCap enables Enron customers to reduce the risk associated with obtaining 
entry capacity from the pipeline operator, the company said. 
Customers can choose instead to supply gas at major U.K. beach terminals to 
Enron and receive the same quantity at the National Balancing Point, or NBP, 
the company added. 
The NBP is a notional point on the pipeline network which is widely referred 
to in the bulk of U.K. over the counter spot market trades as a delivery 
point. 
-By Germana Canzi, Dow Jones Newswires; 44 20 78429283; 
germana.canzi@dowjones.com

JAPAN: Korea Aluminium-Imports seen cheaper than govt stock sales.
By Jae Hur

07/04/2001
Reuters English News Service 
(C) Reuters Limited 2001. 

TOKYO, July 4 (Reuters) - South Korean demand for spot aluminium is expected 
to inch up this week as stock sales by the government agency became less 
attractive after recent declines in London metal prices, traders said on 
Wednesday. 
"It might be the first time since the begining of this year that imported 
aluminium prices appear to be lower than those of the government stock 
sales," said a trader with a leading trading house in Seoul.
This would drive domestic endusers to seek more imported metal held by 
trading houses rather than metal held by the Supply Administration (SAROK), 
alleviating domestic aluminium stocks, he said. 
Aluminium stocks in major South Korean ports, excluding inventories held by 
SAROK, were estimated at about 40,000 tonnes, against 50,000 tonnes in 
mid-June, traders said. 
SAROK said early this week its aluminium selling prices in July would remain 
unchanged from June at 2,248,000 won ($1,729) per tonne. 
On Tuesday, traders said SAROK had bought 10,000 tonnes of western primary 
aluminium ingots late last week from Samsung Corp and Enron Corp . 
The government procurement body bought 5,000 tonnes from Enron last Thursday 
at $1,509 a tonne on a cost-insurance-freight (CIF) basis for Pusan and 
another 5,000 tonnes from Samsung at $1,501.89 a tonne, CIF Inchon, said a 
trade source. 
The purchase prices compared to the administration's purchase in late May. 
SAROK had bought 5,000 tonnes from LG International Corp at $1,582 a tonne, 
CIF Pusan, and another 5,000 tonnes from Mitsui & Co Ltd at $1,579 a tonne, 
CIF Inchon, another trade source said. 
Q3 PREMIUMS AT $45-47/T 
South Korean aluminium import premiums were settled last week at $45-$47 a 
tonne over the London Metal Exchange (LME) cash prices, compared with around 
$65-$66 in the second quarter, the traders said. 
The fall in third quarter premiums were attributed to heavy domestic stocks, 
an influx of cheaper metals from China and Russia and soft domestic demand, 
they said. 
"Some domestic buyers were said to have settled the third quarter term 
premiums at about $43-$45 a tonne," said another trading house trader in 
Seoul. 
But it was hard to confirm the deals because there were only a few major 
buyers involved in the term deals with foreign suppliers this time, he said. 
The buyers were able to get the term premiums because spot premiums had 
further fallen to about $42-$43 a tonne after Japanese importers and foreign 
suppliers agreed on the third quarter premiums, he said. 
In Japan, term premiums for the July-September quarter were settled at around 
$45 a tonne on a CIF basis over LME cash prices, plunging from the second 
quarter premiums of $64-$65. 
That was the lowest level since the first quarter of 1999, when the premiums 
for the world's second-largest economy were settled at $37-$38 a tonne. 
Slowing domestic demand and a supply glut has most domestic buyers preferring 
monthly contracts or spot deals rather than quarterly term deals, traders 
said. (US$1=1,300 won) ((Jae Hur, Tokyo Commodities Desk +81-3 3432 7431 
jae.hur@reuters.com)).

Decision on judicial probe on Enron issue by July 11

07/04/2001
Press Trust of India Limited 
(c) 2001 PTI Ltd. 

Mumbai, Jul 4 (PTI) The decision to institute judicial probe into all the 
aspects of agreement with US energy major Enron would be taken by July 11, 
Democratic Front (DF) coordination committee convener Prof N D Patil said on 
Wednesday night. 
The co-ordination committee which is the policy making body of the eight 
party coalition met here Wednesday night at official Sahayadri Guest House in 
Malabar Hill to deliberate over its stance on the controversial Enron
-promoted Dabhol Power Company's (DPC) project in coastal Konkan.
Briefing reporters in the middle of the meeting, Patil said, "we had good 
discussion and heard everybody's view point and a final decision would be 
taken on July 11". 
Barring Congress and Nationalist Congress Party (NCP), all other constituents 
of the DF are pressing for institution of a judicial inquiry into all the 
aspects of the agreement signed with Enron. 
NCP has clarified its stance saying it would support a judicial probe into 
the matter if the Cabinet unanimously takes a decision in this regard. 
However, the Congress is yet to make public its position over the demand for 
a judicial inquiry. 
The smaller constituents like Peasants' and Workers' Party, Janata 
Dal-Secular, Communist Party of India (CPI), Communist Party of India-Marxist 
(CPM) and Samajwadi Party, have already threatened to withdraw from the 
government if their demand for a judicial probe was turned down. 
Meanwhile DPC Wednesday received one week extension from the Mumbai High 
Court, for the June 26 stay order, which allowed the multinational to move 
the Supreme Court till July 10. 
(THROUGH ASIA PULSE) 04-07 2001

DPC receives one week extension over HC's July 10 deadline

07/04/2001
Press Trust of India Limited 
(c) 2001 PTI Ltd. 

Mumbai, Jul 4 (PTI) US energy major Enron-promoted Dabhol Power Company (DPC) 
has received one week extension from the Mumbai High Court, for the June 26 
stay order, which allowed the multinational to move the Supreme Court of 
India till July 10. 
+DPC applied for the extension on Monday on the grounds that it had received 
the court order copy only that very day (July two) and hence prayed for a 
two-week extension+, state government sources told PTI here Wednesday.
They said since a week had already passed from the day of the Court's 
directive, the HC granted a seven-day extension, to the US energy major 
beyond July 10. 
When contacted, state advocate general Goolam Vahanwati confirmed the 
development and said the state and MSEB had consented for the same. 
On June 26, Mumbai High Court had dismissed DPC's petition challenging the 
jurisdiction of Maharashtra electricity regulatory commission (MERC) to 
adjudicate its dispute with MSEB and also directed the regulator to decide 
this issue within six weeks. 
Justice Ajit Shah and Justice Sharad Bobde held that MERC was an expert body 
and competent enough to decide its own jurisidiction. 
The judges had stayed the order till July 10 to enable DPC move the Supreme 
Court in appeal. 
(THROUGH ASIA PULSE) 04-07 2001
Lenders for splitting DPC assets to cut takeover cost
Our Regional Bureau NEW DELHI

07/04/2001
Business Standard 
8
Copyright (c) Business Standard 

Indian lenders to the Enron-prmoted Dabhol Power Company are looking at the 
prospects of splitting the assets of the company before sale. 
While some generation companies, including the US major AES and two others, 
have approached Indian lenders for taking over the operations of the 
generation unit, talks have also been initiated for taking over the liquefied 
natural gas (LNG) terminal of the DPC separately.
"Some companies have sent feelers for taking over the LNG terminal in 
Ratnagiri," a top executive with an Indian lender told Business Standard. He, 
however, refused to divulge the companies' names. 
Indian lenders are, apparently, of the view that splitting the DPC assets 
will help in reduction of tariffs and the cost of taking over the company, 
sources say. 
The assets, include the LNG terminal with a capacity of five million tonne 
per annum (MTPA). The construction of the terminal is nearly 87 per cent 
complete. 
Industrial Development Bank of India (IDBI) chairman S K Chakraborti had said 
here yesterday that this route will be considered only if talks with Enron to 
continue with the project fail to fructify. 
The DPC was to shift to LNG fuel, instead of naphtha being used at present, 
from June 2002. The shift to LNG will considerably reduce power generation 
cost from the project. 
Of the LNG project's total capacity, about 2.1 MTPA is to be used for 
electricity generation by the Dabhol Power Company and the remaining 2.9 MTPA 
is to be sold commercially. 
But, as the entire cost of the LNG facility has been factored into the PPA 
for the Dabhol project, this has pushed up the cost of power generation. 
As LNG is fast emerging as a preferred fuel, due to low cost and easy 
transferability, there will be a lot of interest in the project, sources 
said. 
The Madhav Godbole committee, which recommended renegotiation of tariffs, has 
said that the Dabhol Power Company should renegotiate its LNG contract and 
set up a separate facility for LNG fuel, which will help in reduction of 
costs. 
As part of the Dabhol Power Company's financial restructuring, the committee 
has suggested an increase in the maturity profile of its debt from five to 15 
years with a five-year moratorium. 
It has also suggested an indicative interest rate of 12 per cent on rupee 
loans or six per cent in dollar terms for the project.

NEWS
Water treatment contract approved
MARY FLOOD, RACHEL GRAVES
Staff

07/04/2001
Houston Chronicle 
3 STAR
35
(Copyright 2001) 

The Houston City Council approved a $104 million contract for the Northeast 
Water Purification Plant with Montgomery Watson Constructors of California. 
The contract for the Lake Houston plant needed council approval but will be 
between the construction and engineering firm and the Houston Area Water 
Corp., known as "the Hawk," a citizen board appointed by the mayor.
The contract provides 2 1/2 years to build the 40 million-gallon- a-day plant 
that will treat raw lake water. Montgomery Watson could also be required to 
construct a plant expansion. 
The city of Houston is the initial customer for the water and would repay the 
Hawk the cost of treating the water. The city hopes that the plant will 
eventually provide water to other area entities as well. This plant is part 
of an area plan for the treatment of surface water that could cost about $2 
billion to implement. 
Councilmen Bruce Tatro and Chris Bell voted against the agreement after an 
unsuccessful attempt to delay the vote. Tatro said he objected to the plan to 
issue debt to build the plant when it would be cheaper in the long run to pay 
cash for the first three years of the project. 
Councilman John Castillo disagreed, saying the point in issuing debt is to 
ensure that today's taxpayers are not paying for tomorrow's water 
consumption. 
Bell said the decision about awarding the contract should have been made by 
council, not the Hawk. 
The administration of Mayor Lee Brown was believed to have favored Montgomery 
Watson's chief competitor, Azurix Corp., an arm of local energy giant Enron 
Corp. 
Three recommendations from City Hall staff recommended Azurix. Hawk board 
members said what mattered were Montgomery Watson's lower prices and that 
Azurix plans to sell Azurix North America, the body that would oversee the 
plant. 
But Tuesday, council also unanimously approved a $46 million contract with 
Azurix North American Operations and Maintenance Inc. to operate the existing 
Southeast Water Purification Plant for more than five years. 
That contract underwent the normal bidding process, whereas the Hawk board 
was designed to avoid the bidding process and allow the citizen-run 
corporation to make its own value choice among competitors. "About six weeks 
ago, political pressure began to ease as City Council looked at what work the 
Hawk board had done," Hawk chairman David Berg said.

NEWS
Ex-Houston judge to be special counsel / Andell to advise education secretary
John WILLIAMS, Houston Chronicle Political Writer
Staff

07/04/2001
Houston Chronicle 
3 STAR
22
(Copyright 2001) 

Eric Andell, a former Democratic state appellate judge in Houston who lost 
his re-election bid last year, has accepted a position as special counsel to 
U.S. Education Secretary Rod Paige. 
Paige, former Houston school superintendent, announced Tuesday that Andell 
will provide recommendations and guidance on various legal matters.
The appointment in the Bush administration apparently removes the threat that 
Andell might mount a Democratic bid next year for Harris County judge. 
Andell said he looks forward to working with Paige. 
"I have worked with Paige before on (Houston Independent School District) 
matters and I am excited about the opportunity of working with him again," 
Andell said. 
Andell was a juvenile court judge when then-Gov. Ann Richards appointed him 
to the 1st Court of Appeals in 1993. Known for broad community involvement, 
Andell has been active in various youth and school issues. 
He has served as chairman of the Texas Juvenile Probation Commission, 
chairman of the Aspiring Youth of Houston and as a member of HISD committees. 
Earlier this year, Andell was mentioned as a possible HISD superintendent 
when Paige resigned to accept the cabinet appointment. The HISD job 
eventually went to longtime district administrator Kaye Stripling. 
Since his defeat for the judgeship, Andell has served as a visiting judge. He 
also has performed mediation and arbitration work for the Houston law firm 
Nathan Sommers Lippman Jacobs & Gorman. 
Andell said Tuesday that Paige asked him several months ago to consider the 
job. Since then, Andell has received support from a number of prominent local 
Republicans, including former mayoral candidate Rob Mosbacher, Enron Corp. 
Chairman Ken Lay and attorney Pat Oxford. 
"He brings a good background in the education arena that has been gleaned 
from his experience on the bench and some good sound judgment," said 
Mosbacher, a member of a Greater Houston Partnership committee that deals 
with HISD issues. 
Many Democrats had hoped Andell would seek the county judge position, which 
has been held by Republicans since 1974. 
Andell said he had considered making a run if incumbent Robert Eckels did not 
seek a third term. Eckels is expected to seek re- election. 
"It was bandied about and when I discussed it openly and honestly, I always 
said it was if Eckels chose not to run," Andell said. 
Despite receiving top endorsements and outspending his Republican opponent 
10-1 last fall, Andell lost to former assistant county attorney Terry 
Jennings by a slim margin. 
Jennings' victory left Margaret C. Mirabel as the only Democrat among the 18 
appellate judges in Houston. 
Andell said he will move to Washington this month, hopes to stay in the new 
position at least through the end of Bush's first four- year term and has no 
political aspirations until then.

Front
Gas rates plunging
Dave Mabell

07/04/2001
Lethbridge Herald 
Metro
All material Copyright (c) Bell Globemedia Publishing Inc. and its licensors. 
All rights reserved. 

It's like a "Going Out of Business" sale. 
After charging record high rates through the winter, the natural gas company 
serving southern Alberta homes and businesses is cutting its prices up to 45 
per cent. At the same time, Atco Gas continues to look for another company to 
take over its retail gas business.
Approval of the company's request for rate reductions -- from $9.81 per 
gigajoule to $5.41 for most customers -- was announced Tuesday in Calgary. 
The rate took effect July 1, and is scheduled to remain in effect until next 
Jan. 31. 
Reduced rates reflect softening prices across most of North America for one 
of Alberta's biggest exports and provincial tax revenue generators. 
Jerome Engler, the company's executive vice-president, said the dramatic 
price drop reflects the way the company buys its gas from Alberta producers. 
Unlike newly arrived competitor Epcor, Atco does not hedge its prices by 
buying forward contracts. 
"Customers will quickly get a lower natural gas price because of the methods 
Atco Gas employs to purchase gas that ensures customers pay the least cost 
for gas over the long term," said Engler. "The market price for natural gas 
is sliding down, and we can pass these lower costs on to our customers." 
Although Alberta politicians blamed this province's cost of electricity -- 
highest in Canada -- on last winter's soaring natural gas prices, there's so 
far been no sign homeowners and business people will see any dramatic cuts in 
those bills. 
Atco's lower gas price, however, will still be marginally above the $5.35 
price offered Lethbridge householders when Epcor began offering term 
contracts last winter; more recent Epcor offerings have been higher than $8 
for a one- or three-year term. 
But Atco's rate will remain substantially higher than the $3.26 cost of gas 
in southern Alberta just 18 months ago. 
In approving the rate reductions, the Alberta Energy and Utilities Board once 
again ordered lower rates in northern Alberta than in the south: $4.95 vs. 
$5.40. In a recent board decision that surprised Atco, it denied permission 
to sell the company's large gasfields near Viking (southeast of Edmonton) 
which have historically given a price advantage to consumers in the Edmonton 
area and north. 
At last winter's record-high prices, the board said Atco's surcharges 
resulted in accumulated surpluses in both northern and southern Alberta. 
The company is expected to repay those amounts by Jan. 31, for residential 
customers who opted not to shoulder the full impact of last winter's price 
shock. 
For larger gas customers, using more than 8,000 gigajoules per year, the 
surcharge -- and now the repayment -- was expected to end this Oct. 31. 
For Atco, these rate changes could be the last for which the company will 
apply for permission. While retaining its pipeline network through Alberta, 
Atco has announced plans to sell its retail gas business to another company. 
Atco officials said at the end of April they're looking for a "world calibre" 
company to take over service to homes and businesses across the province. 
Because Atco has been a long-time supplier, operating under the province's 
regulatory authorities, they said Atco is "restricted from providing the full 
range of retail offerings." 
Company president Craighton Twa said attracting a big-league buyer will bring 
increased choice for the province's consumers. 
"The sale will initiate the final stage for the fully deregulated environment 
envisioned by the Alberta government," he said. 
One of the leading contenders, Enron Direct, has refused to comment on 
whether it's negotiating to buy the Atco business. The American company has 
meanwhile announced plans to begin offering southern Alberta businesses their 
choice of contract prices for electricity. 
Engler said Atco is facing further change, whether it sells its retail arm or 
not. At a separate series of energy board hearings, he said the company was 
asked to respond to proposals to change how it buys gas -- on the spot 
market, vs. hedging through contracts -- and how long its prices should run 
before further review. 
The board's decisions are expected to apply to Atco's successor, if it sells. 
"We hope to see a sale completed this summer," Engler said. 
But whoever the buyer, he adds, Alberta consumers will still be offered a 
regulated price as an alternative to signing a fixed contract. With Alberta's 
penchant for deregulation, however, Engler isn't certain how long that option 
will continue. 
With the lower prices, he adds, it may take longer before consumers whose 
bills still show "credit balance," as a result of the provincial government's 
subsidies, start paying for their gas once again. 
Consumers who'd rather receive a cheque in the mail instead of debiting their 
credit balance, Engler said, can call Atco and ask for their refund. 
Any comments or questions? Contact the writer at 
dave.mabell@lethbridgeherald.com

Fimat USA's Kilduff: Oil Prices, OPEC and Stock Picks
2001-07-04 10:18 (New York)

     New York, July 4, 2001 (Bloomberg) -- John Kilduff (right), senior vice
president of energy risk management at Fimat USA Inc., talks with Bloomberg's
Dylan Ratigan about the outlook for oil prices, the Organization of Petroleum
Exporting Countries (OPEC) and some of his stock picks.

02:13 The outlook for OPEC and oil prices
01:18 Impact of OPEC on profitability of integrated companies
00:35 Picks: Enron, EOG Resources and Anadarko Petroleum

     For company information see ENE US, EOG US, APC US <Equity> CN, BQ. For
related news see the following NI codes: US, ADVISE, NRG, OIL, OPEC, UTI, ELC,
GAS, CMD, VENZ, LATAM, REF, ERNLOOK. For more on the Bloomberg Forum see BFM.
For more Bloomberg Multimedia reports see AV. -- Bloomberg Multimedia (609)
279-4455 (VV/BH)


India Risks Lower Rating If Budget Deficits Grow, S&P Says
2001-07-04 22:55 (New York)

India Risks Lower Rating If Budget Deficits Grow, S&P Says

     New York, July 5 (Bloomberg) -- India must cap its federal
and state government budget deficits or risk having its credit
rating lowered, a Standard & Poor's analyst said.
     India's ``BB'' rating, which is two notches below investment
grade, may be cut if the combined deficits widen to more than 10
percent of gross domestic product from 9 percent now, Joydeep
Mukherji, S&P's associate director and India analyst, said in an
interview.
     ``We continue to watch the fiscal problem very closely as
that is the most vulnerable area that could lead to a negative
rating action,'' Mukherji said.
     The warning comes as the government plans to increase
spending to bolster a slowing economy. A lower rating would raise
the cost of borrowing for the government and Indian companies,
already among the highest in Asia. India's benchmark 10-year bond
yield is 9.6 percent, higher than 6.5 percent for comparable
Chinese bonds and 6.8 percent for South Korean bonds -- which both
have an investment grade rating.
     S&P lowered the outlook on India's rating to ``stable'' from
``positive'' in October. The agency cited India's failure to meet
deadlines for sales of state-owned companies. The rating is among
the lowest in the region.
     Last week, an analyst for Moody's Investors Service said
India must step up sales of state assets and trim its budget
deficit to avoid a reduction in the outlook on its debt. Moody's
``Ba2'' rating, also two notches below investment grade, has a
``positive'' outlook, meaning it may be raised.

                         Growing Debt

     Fitch cut India's long-term sovereign rating outlook to
``negative'' from ``stable'' on May 31. Fitch, which rates India
``BB+,'' one notch below investment grade, cited ``concerns about
fiscal policy, privatization and a deterioration in the investment
climate.''
     ``Any downward change in the country's rating or outlook will
adversely impact investments in India,'' said Kalpana Morparia,
executive director of lender ICICI Ltd., which borrowed about $100
million in international markets last year.
     Years of budget deficits have saddled India with 14 trillion
rupees ($297 billion) of debt, equal to about 63 percent of GDP.
Servicing the debt leaves little money to invest in schools,
hospitals or other projects that could improve the well-being of
Indians and raise the rate of economic growth in the world's
second most-populous country.
     The economy expanded 3.8 percent in the quarter ended March
31 from a year earlier, down from 5 percent growth the previous
quarter and the slowest pace in nearly three years, as a two-year
drought pruned rural incomes. In response, Finance Minister
Yashwant Sinha said last week he would step up government spending
to stimulate the economy.

                      Asset Sales Stall

     In the first two months of the fiscal year, the central
government's budget deficit has reached a quarter of the target
for the year as a whole.
     ``Lower growth may mean lower tax revenue and increased
pressure on governments to raise spending that could enlarge the
combined deficits of the central and state governments beyond 10
percent of GDP this year, potentially weakening the rating,''
Mukherji said.
     India's program to sell state assets, reduce tariffs and
otherwise free the economy from government interference hasn't
moved as fast as expected, Mukherji said.
     ``India has had about 3 years' worth of economic reforms
spread out over the last 10 years,'' he said.
     For example, the government said it planned to raise 120
billion rupees by selling stakes in more than 20 state-run
companies in the fiscal year that began April 1. So far this year,
it hasn't sold a single stake.

                         Enron Dispute

     If the government's economic program fails to gather speed,
the country may slip to its pre-1990s growth rate of 3.5 percent a
year from an average of more than 7 percent in the 1990s, Mukherji
said.
     The dispute between the Maharashtra State Electricity Board
and Enron Corp., the country's biggest foreign investor, which
built a $3 billion power plant, is a ``long-term disaster'' and a
``bad, loud and clear signal to potential foreign investors,''
Mukherji said.
     The state electricity board has refused to pay 3 billion
rupees for power supplied by Enron's local unit, Dhabol Power Co.
India hasn't delivered on guarantees to pay for the power. The
dispute is widely seen as a litmus test for foreign investment in
India.
     ``The Indian private sector is used to bad politics and
failed economic policies, such as energy reforms, but the foreign
private sector is not,'' Mukherji said.

--Gautam Chakravorthy in the Mumbai newsroom (91-22) 233-9027 or
at chakravorthy@bloomberg.net, with reporting by Anindya Mukherjee
in New Delhi/clw/pv

Story illustration: Click {CSDR <GO>} for a detailed listing of

sovereign debt ratings. Click on {ENE US <Equity> GP <GO>} to
graph Enron's share prices.


S&P's Mukherji on Risk of Lower Rating for India: Comment
2001-07-04 23:11 (New York)


     Mumbai, July 5 (Bloomberg) -- Joydeep Mukherji, associate
director and India analyst for Standard & Poor's, on the chance of
a lower rating for the country:

     ``We had signaled last year that reform was likely to move
very slowly, if at all, and that is what has been happening. So
far, nothing has happened to further lower the rating, but we
continue to watch the fiscal problem very closely as that is the
most vulnerable area that could lead to a negative rating
action.''
     ``Lower growth may mean lower tax revenue and increased
pressure on governments to raise spending. That could enlarge the
combined deficits of the central and state governments beyond 10%
of GDP this year, potentially weakening the rating.''
     ``S&P changed the outlook on India's `BB' rating to `stable'
from `positive' in October 2000. At the time, we said that the
change was based on the inability of India's political leadership,
cutting across all political parties, to implement reform to the
public sector in a timely manner.''
     ``The disappointment expressed by many commentators in recent
days, especially after the bad GDP growth figures were released,
is consistent with that earlier rating action.''
     India said last week that the economy grew 3.8 percent from a
year earlier in the quarter ended March 31, down from 5 percent in
the previous quarter and the slowest pace in nearly three years.

On India's plans to reduce the state's role in the economy:
     ``India has had about 3 years' worth of economic reform
spread out over the last 10 years.''
     ``Many wonderful measures are announced, sometimes re-
announced, and announced yet again, but very little is ever
implemented.''
     ``The country may well gradually calibrate its way down to
the old Hindu rate of growth, with GDP growth having slumped from
7 percent a few years ago to barely 5 percent this year, unless it
gets its economic act together soon.''
     ``After 54 years of Independence and 10 years of economic
reform, everyone looks to the rain gods to see if economic growth
can pick up once again. Can there be a more damning indictment of
Indian economic policy failure than this?'' A two-year drought has
depressed growth.

     On the refusal of a state electricity board to pay for power
supplied by the Indian unit of Enron Corp.:

     ``The Enron episode has been a bigger long-term disaster for
India than most Indians, including in the media, realize. It has
sent a bad, loud, and clear signal to potential foreign
investors.''
     ``The Indian private sector is used to bad politics and
failed economic policies, such as energy reform, but the foreign
private sector is not.''
     ``Indians compare India today with India in the past and
content themselves with the small progress they have made. Foreign
investors look at things differently.''

     On future foreign investments in India:
     ``India missed the boat on foreign investment in energy and
telecommunications, two very capital intensive sectors where the
country needs lots of investment by foreign and domestic
players.''
     ``Foreign firms have all but abandoned the energy sector and
are not very interested in the telecom sector.''
     ``Foreign investment will continue to trickle into the
country, especially in sectors such as information technology,
services, and other sectors that depend less on government
regulation... However, the amounts are trivial. India is getting
less foreign direct investment per year than China receives per
month.''

--Gautam Chakravorthy in the Mumbai newsroom (91-22) 233-9027 or
at chakravorthy@bloomberg.net /clw

Story illustration: Click {CSDR <GO>} for a detailed listing of
sovereign debt ratings. Click on {ENE US <Equity> GP <GO>} to
graph Enron's share prices.


Indian Oil Companies Cut Naphtha Price, Paper Says (Correct)
2001-07-04 23:46 (New York)


     (Corrects second paragraph to show prices took effect
Sunday.)

     New Delhi, July 5 (Bloomberg) -- India's state-run oil
companies such as Indian Oil Corp. and Hindustan Petroleum Corp.
cut the price of naphtha as international crude prices fell, the
Business Standard reported, without citing sources.
     Naphtha, used by Enron Corp.'s Dabhol power plant to produce
electricity, is now cheaper by 530 rupees for 1000 liters. The
companies also pared prices for furnace oil and heavy petroleum
stock. The new prices took effect Sunday, the paper said.
     The price cut may have been brought about by a recent decline
in international crude oil prices, analysts said. Dated Brent
Crude fell to $25.92 a barrel yesterday from $29.34 on June 11,
and 31 percent below a one-year high of $37.73 last September.
     High naphtha prices during the three months ended March 31
resulted in a 17 percent drop in profit for the quarter at
Reliance Industries Ltd., India's biggest non-state company by
sales, which uses naphtha to make plastics. Still, oil companies
gained. Indian Oil, the country's biggest refiner, said profit for
the year ended March rose 11 percent on higher petroleum product
prices.

(Business Standard, 07/05, Pg.9)

For the paper's Web site, {BSTD <GO>}

--Anindya Mukherjee in the New Delhi newsroom (91-11) 334-8821, or
at amukherjee@bloomberg.net/rv

Story illustration: {IOCL IN <Equity> COM <GO>} to compare Indian
Oil shares against the benchmark Sensex.
{EUCRBRDT <Index> GP <GO>} to graph Brent Crude prices.


India Risks Lower Rating If Deficits Grow, S&P Says (Update1)
2001-07-05 08:08 (New York)

India Risks Lower Rating If Deficits Grow, S&P Says (Update1)

     (Adds money manager's comment starting in 13th paragraph.)

     New York, July 5 (Bloomberg) -- India must cap its federal
and state government budget deficits or risk having its credit
rating lowered, a Standard & Poor's analyst said.
     India's ``BB'' rating, which is two notches below investment
grade, may be cut if the combined deficits widen to more than 10
percent of gross domestic product from nine percent now, Joydeep
Mukherji, S&P's associate director and India analyst, said in an
interview.
     ``We continue to watch the fiscal problem very closely as
that is the most vulnerable area that could lead to a negative
rating action,'' Mukherji said.
     The warning comes as the government plans to increase
spending to bolster a slowing economy. A lower rating would raise
the cost of borrowing for the government and Indian companies,
already among the highest in Asia. India's benchmark 10-year bond
yield is 9.6 percent, higher than 6.5 percent for comparable
Chinese bonds and 6.8 percent for South Korean bonds, both of
which have an investment grade rating.
     S&P lowered the outlook on India's rating to ``stable'' from
``positive'' in October. The agency cited India's failure to meet
deadlines for sales of state-owned companies. The rating is among
the lowest in the region.
     Last week, an analyst for Moody's Investors Service said
India must step up sales of state assets and trim its budget
deficit to avoid a reduction in the outlook on its debt. Moody's
``Ba2'' rating, also two notches below investment grade, has a
``positive'' outlook, meaning it may be raised.

                         Growing Debt

     Fitch cut India's long-term sovereign rating outlook to
``negative'' from ``stable'' on May 31. Fitch, which rates India
``BB+,'' one notch below investment grade, cited ``concerns about
fiscal policy, privatization and a deterioration in the investment
climate.''
     ``Any downward change in the country's rating or outlook will
adversely impact investments in India,'' said Kalpana Morparia,
executive director of lender ICICI Ltd., which borrowed about $100
million in international markets last year.
     Years of budget deficits have saddled India with 14 trillion
rupees ($297 billion) of debt, equal to about 63 percent of GDP.
Servicing the debt leaves little money to invest in schools,
hospitals or other projects that could improve the well-being of
Indians and raise the rate of economic growth in the world's
second most-populous country.

                             Slowdown

     The economy expanded 3.8 percent in the quarter ended March
31 from a year earlier, down from 5 percent growth the previous
quarter and the slowest pace in nearly three years, as a two-year
drought pruned rural incomes. In response, Finance Minister
Yashwant Sinha said last week he would step up government spending
to stimulate the economy.
     ``Lower growth may mean lower tax revenue and increased
pressure on governments to raise spending that could enlarge the
combined deficits of the central and state governments beyond 10
percent of GDP this year, potentially weakening the rating,''
Mukherji said.
     Investors too are getting concerned with the government's
profligacy. In the first two months of the fiscal year, the
central government's budget deficit has reached a quarter of the
target for the year as a whole.
     ``The growing deficit bothers me,'' said Bharat Shah, who
manages 33 billion rupees at Birla Sun Life Asset Management in
Mumbai. ``There's a need for a sharp reduction in expenditure that
will call for political consensus, which I don't think is in
place.''
     Without pruning deficits, the government can't hope to lower
interest rates. Higher interest rates in India damp the
government's plan of attracting more foreign companies to set up
businesses locally.

                        Overseas Investment

     ``The most important thing to do is to get more foreign
direct investment, which is the mother of all solutions,'' Shah
said. Last year, India managed to attract $4.5 billion in foreign
investment, a tenth of what China took in.
     India's program to sell state assets, reduce tariffs and
otherwise free the economy from government interference hasn't
moved as fast as expected, Mukherji said.
     ``India has had about 3 years' worth of economic reforms
spread out over the last 10 years,'' he said.
     For example, the government said it planned to raise 120
billion rupees by selling stakes in more than 20 state-run
companies in the fiscal year that began April 1. So far this year,
it hasn't sold a single stake.
     If the government's economic program fails to gather speed,
the country may slip to its pre-1990s growth rate of 3.5 percent a
year from an average of more than 7 percent in the 1990s, Mukherji
said.

                         Enron Dispute

     The dispute between the Maharashtra State Electricity Board
and Enron Corp., the country's biggest foreign investor, which has
set up a $3 billion power plant, is a ``long-term disaster'' and a
``bad, loud and clear signal to potential foreign investors,''
Mukherji said.
     The state electricity board has refused to pay 3 billion
rupees for power supplied by Enron's local unit, Dabhol Power Co.
India hasn't delivered on guarantees to pay for the power. The
dispute is widely seen as a litmus test for foreign investment in
India.
     ``The Indian private sector is used to bad politics and
failed economic policies, such as energy reforms, but the foreign
private sector is not,'' Mukherji said.

--Gautam Chakravorthy in the Mumbai newsroom (91-22) 233-9027 or
at chakravorthy@bloomberg.net, with reporting by Anindya Mukherjee
and Arijit Ghosh in New Delhi/clw/pv/nmn

Story illustration: Click on {CSDR <GO>} for a detailed listing of
sovereign debt ratings. Click on {ENE US <Equity> GP <GO>} to
graph Enron's share prices