----- Forwarded by John J Lavorato/Corp/Enron on 01/22/2001 09:55 PM -----


	Frank Hayden 01/22/2001 01:29 PM 	   To: John J Lavorato/Corp/Enron@Enron  cc:   Subject: 	




01/22 12:52 UPDATE 1-Enron distances itself from Calif. power crisis 

HOUSTON, Jan 22 (Reuters) - Energy powerhouse Enron Corp. <ENE.N> on Monday distanced itself from California's power crisis, saying the turmoil which has brought the state's two largest utilities to the brink of bankruptcy would not impact its bottom line. 

"We do not expect the California situation to have any significant effect on Enron's financial outlook, specifically our ability to hit 2001 targets," Jeff Skilling, the president and chief operating officer of North America's biggest buyer and seller of electricity and natural gas, said in a conference call with analysts. 
Skilling also said there hadn't been any significant impact on fourth quarter earnings, noting that Enron did not own electricity generation assets in California, where rolling electricity blackouts were imposed last week and the state's top two utilities are running out of money as they face soaring wholesale electricity costs. 

Having sold electricity to the state's main utilities, generating companies such as Reliant Energy Inc. <REI.N> and Dynegy Corp. <DYN.N> are now at risk of not receiving payments from Pacific Gas and Electric, a unit of PG&E Corp. <PCG.N>, and Southern California Edison, a unit of Edison International <EIX.N>. 

At the same time, some have claimed that power generators have taken advantage of the crisis by over-charging the state's utilities, which, as part of deregulation, cannot pass on skyrocketing electricity prices to consumers. 

"California is a much smaller percentage of our overall earnings than some of the other energy companies, particularly generators," Skilling said, adding that the company only participates in the merchant business of buying and selling electricity. 

"The bottom line is this: We are not overexposed in California or anywhere else for that matter." 
Shares of Enron rose $2-3/8 to $73-7/16 on the New York Stock Exchange after it reported earnings before nonrecurring items rose 34 percent, to $347 million in the fourth quarter.