25 Leaders for a Dangerous Time
Business Week, 05/14/01
USA: El Paso opens bids to expand Calif. natgas lines.
Reuters English News Service, 05/11/01

Software Promises Bandwidth Broker In A Box
Dow Jones Energy Service, 05/11/01

Sierra Pacific Resources Posts 1st-Quarter Loss, Blames Western Power Crisis
Dow Jones Business News, 05/11/01

India Must Split Power Industry to End Debt Crisis (Update1)
Bloomberg, 05/11/01

Interview: Enron Chairman Ken Lay
Bloomberg TV, 05/10/01


BusinessWeek e.biz: Cover Story: The e.biz 25
25 Leaders for a Dangerous Time

05/14/2001
Business Week
EB24
(Copyright 2001 McGraw-Hill, Inc.)

The Internet forced a revolution in the way companies are managed. For the 
CEOs of upstarts and Old Economy players alike, the focus has been on making 
decisions in a heartbeat, innovating fast, and looking for ways to tap the 
Net to reach new customers and streamline operations. Now we're in the midst 
of what experts say could be the biggest tech slowdown in 15 years. With the 
pressure on to cut costs and meet quarterly earnings expectations, what's a 
CEO to do? 
Ask our e.biz 25. These are the most influential people in 
e-business--everybody from empire builders like AOL Time Warner Chairman 
Steve Case to Monica Luechtefeld, executive vice-president of e-commerce at 
retailer Office Depot. Those two have wisely built bridges between the worlds 
of bricks and clicks. Their advice is bold: Don't just hunker down and try to 
wait it out. Invest, build, develop new products, and prepare for the 
upswing. Technology and the Internet may not be growing licketysplit, but 
they aren't going away. Says Jeffrey K. Skilling, CEO of Enron Corp., one of 
our 25: ``A lot of people will pull back. They will be missing tremendous 
opportunities. Those with capital and talent should push forward and widen 
the lead.''
Doing this in the face of a trigger-happy Wall Street will require dynamic 
leadership and cast-iron stomachs. We've got that on our e.biz 25. These are 
the pioneers, the people with the new ideas, the out-of-box thinkers, and the 
survivors--especially the survivors--who will shape e-business for years to 
come. 
Some of our 25 have been on the list before. Michael Dell, CEO of Dell 
Computer Corp., for one. He's a pioneer who has used the Net to reach 
customers and revamp his supply chain. Now, in the midst of the downturn, 
Dell is turning up the heat on competitors by slashing prices ruthlessly. 
Thanks to his foundation of Net technologies, Dell can do this and still make 
a profit. The result could be a massive restructuring of the PC industry, 
with some of Dell's competitors losing market share at a gallop. 
Others land on the list because of their potential for shaking up the status 
quo. Example: Rick Belluzzo, Microsoft Corp.'s president. Microsoft has been 
ho-hum on the Net--until now. Belluzzo has turned Microsoft's MSN into the 
No. 2 portal on the Web, and now the company is committed to spending $2 
billion this year on research & development for its .Net strategy for 
supercharging the Web. It may well make the Net more useful--and easier to 
use. And Microsoft could leapfrog from laggard to leader. 
Then there are the folks whose future is very much in doubt--and that makes 
them even more important to watch. Squarely on the e.biz hot seat sits Jeff 
Bezos of e-tailer Amazon.com Inc. With the online superstore's revenue growth 
slowing and its $15 stock off its peak by 85%, the man who scared the bejesus 
out of the nation's traditional retailers isn't so terrifying now. But he's 
still the trailblazer of e-tailing. Whether he fails miserably or triumphs in 
the end, how he fares will tell us much about the next episode in the 
Internet saga. ``This is a good time to learn, to explore, to get ready,'' 
says Rosabeth M. Kanter, professor at Harvard Business School. 
Indeed, economic slumps have been launchpads for companies who know how to 
take advantage of them. The outfits that are likely to pick up momentum in 
this downturn are the companies that create or adopt new technology, 
experiment with new business models, and expand aggressively. That's 
certainly been true in the past. During the 1990-91 recession, EMC Corp. 
focused on high-end storage technologies and innovated its way through hard 
times. Chrysler retooled its design process and began farming out component 
manufacturing to partners--and was the only one of the Big Three to post a 
profit in 1992. Arrow Electronics bought smaller competitors and expanded in 
Europe, emerging as the No. 1 electronics distributor in the world. 
``Slowdowns can be a great opportunity for companies that are prepared. It's 
time for the strong to get stronger, and for the relatively weak to get 
stronger, too,'' says Orit Gadiesh, Chairman of consulting firm Bain & Co. 
The Internet's early winners focused on boosting sales. But during a 
downturn, that's not nearly enough. The Net can be used to supercharge every 
aspect of a company's operations, from market research and customer service 
to engineering collaboration and linking up suppliers. Consider e.biz 25 
member Pradeep Sindhu, co-founder of Juniper Networks Inc. He used this 
wall-to-wall approach to make his four-year-old upstart the leader in 
high-end network routers. It was built from the ground up to capitalize on 
the Net. The company takes orders over the Web and automatically passes them 
to contract manufacturers who make and ship the products. This frees Juniper 
to concentrate on designing products that trounce the competition. The 
payoff: Juniper's operating margin hovers around 30%, nearly double the 
average in the hardware business. 
The most successful e-businesses don't just chase the latest hot idea. They 
figure out which technologies are really right for them. Gary M. Reiner, 
chief information officer at General Electric Co., one of our e.biz 25, 
turned up his nose when many industrial companies joined consortiums that set 
up public e-marketplaces. GE has instant economies of scale with its 11 
different businesses, so it can reap huge savings by combining all their 
buying into the company's own private e-marketplace. GE expects to save $600 
million on procurement over the Web in 2001. 
Many established companies rapidly spun off independent Internet divisions, 
and for some--NBC, for example--that turned out to be a mistake. The latest 
thinking is that companies like retailer Office Depot got it right. It set up 
an independent organization, run by Luechtefeld, but its bricks and clicks 
are cemented together. For instance, customers who need something immediately 
can check online to see if the item is in stock at their local Office Depot. 
The company logged $850 million in online sales last year, making it the No. 
2 online retailer after Amazon.com 
In a downturn, charismatic leadership is more important than ever. With 
revenues sinking and stock options underwater, workers need reasons to 
believe. ``You have to persuade people to stay with you for the ride,'' says 
Haim Mendelson, a professor at the Stanford Graduate School of Business. 
While most companies are laying off, some, like Sun Microsystems Inc., pledge 
to do so only as a last resort. CEO Scott McNealy, one of our e.biz 25, 
believes layoffs break a social contract with employees. By holding back, 
``we're protecting the long-term shareholder value,'' he says. 
For CEOs who have been the company's visionaries during the Net's go-go 
years, now is the time to buckle down and pay attention to operations. It's 
advice that Amazon's Bezos takes to heart. The company's goal is to post an 
operating profit--excluding special charges--in the fourth quarter. He's 
concentrating on operating efficiencies. And he's using Net technology to get 
there. Right now, Amazon is installing a system that will automatically route 
e-mails from customers to the appropriate service representative, saving time 
and money. 
Bean-counting may be back, but so is fear. And leaders who let themselves be 
ruled by fear won't be able to handle the balancing act that's required of 
them in these difficult times. ``Some people pay lip service to the 
principles of leadership, but they flush it away when they're running 
scared,'' says Raymond Miles, professor emeritus at the Haas School of 
Business at the University of California at Berkeley. These 25 show no sign 
of turning tail. 
Who is making money online? And how are they doing it? Watch TechTV on your 
cable system Monday, May 7, for an update on the state of e-business and 
insights from the e.biz 25. All day long, TechTV and techtv.com will feature 
insider reports, forecasts, products, services, and the people who are 
shaping the future. 
The List 
28 EMPIRE BUILDERS Monica Luechtefeld, Office Depot Stuart Wolff, 
Homestore.com Meg Whitman, eBay Thomas Middelhoff, Bertelsmann Steve Case, 
AOL Time Warner 
36 ARCHITECTS Rick Belluzzo, Microsoft Bill Coleman, BEA Systems Scott 
McNealy, Sun Microsystems Tony Ball, BSkyB Michael Powell, FCC Chairman Pekka 
Ala-Pietila, Nokia 
44 VISIONAIRES LawrenceLessig,Stanford Hal Varian, U.C. Berkeley 
46 INNOVATORS Ray Ozzie, Groove Networks Courtney Love, Hole Paul Bourke, 
Altra Energy Takeshi Natsuno, NTT DoCoMo 
52 WEBSMART Michael Dell, Dell Pradeep Sindhu, Juniper Networks Jeffrey 
Skilling, Enron Gary Reiner, General Electric Steve Sanger, General Mills 
58 ON THE HOT SEAT Jeff Bezos, Amazon.com Marty Wygod, WebMD Masayoshi Son, 
Softbank

JEFFREY SKILLING 
Enron Corp., President and CEO 
CONTRIBUTION: Thanks to the Net, he transformed Enron into North America's 
largest energy marketer. He's trading everything from paper to metals online 
to the tune of $162 billion in the first quarter. 
CHALLENGE: Get new broadband Internet trading unit on solid footing by 
proving bandwidth can be traded like a commodity. 
Enron Corp. Chief Executive Officer Jeffrey K. Skilling likes to say that the 
nation's leading energy merchant was ready for the Internet long before there 
was anything.com. Enron's business of buying and selling commodities such as 
electricity and natural gas--by phone or fax--was a natural fit for the Web. 
Over the past year, Enron has taken online trading to a new level, harnessing 
the Web to bring Enron's risk-management prowess to everything from metals to 
high-speed communications. ``Our volumes are way up,'' says Skilling. 
Try through the roof. EnronOnline handles 5,000 transactions per day. The 
company posts prices on more than 1,500 products that it stands ready to buy 
or sell to utilities, municipalities, and other big wholesale customers. 
Since November, 1999, EnronOnline has traded more than $525 billion worth of 
commodities, making it the Web's biggest and most successful 
business-to-business site. 
Skilling's most challenging move: high-speed communications bandwidth. In the 
past year, Enron has spent $436 million to create its own 15,000-mile 
fiber-optic network to provide real-time bandwidth to customers. Because of a 
supply glut and falling prices, bandwidth trading is struggling. In March, 
Enron suffered a major blow with the abrupt cancellation of its 
video-on-demand pact with Blockbuster Inc. Skilling says the deal was called 
off because Blockbuster wasn't getting movies from Hollywood studios fast 
enough. 
Such setbacks don't faze Skilling, a former McKinsey & Co. consultant who 
graduated in the top 5% of his Harvard Business School class. He sees almost 
no limit to what Enron can trade--even ad space is a possibility. ``The Net 
allows you to touch lots of customers inexpensively,'' he says. Not bad for 
mere commodities. 


USA: El Paso opens bids to expand Calif. natgas lines.

05/11/2001
Reuters English News Service
(C) Reuters Limited 2001.

HOUSTON, May 11 (Reuters) - El Paso Corp. said Friday two of its units are to 
test the market's appetite to expand capacity on two natural gas lines into 
energy-starved California, where gas prices are the highest in the nation. 
El Paso unit El Paso Natural Gas Company started taking open bids May 1 and 
will close its so-called open season on May 25 for new capacity on a proposed 
two-way line between Daggett, Calif. and Ehrenberg, Ariz., El Paso said in a 
statement.
El Paso unit Mojave Pipeline Co. is also holding an open season from May 10 
to May 31 for its Sacramento Valley project, which would add capacity along 
an expanded Mojave pipeline system from Topock, Ariz., to Antioch and 
Sacramento in Northern California. 
No estimates were immediately available as to how much capacity El Paso, the 
largest supplier of natural gas to California, was considering adding to each 
system, an El Paso spokeswoman said. 
El Paso currently delivers more than 3 trillion cubic feet of gas a day, or 
about 45 percent, to California through four receiving points at the 
California-Arizona border. 
The El Paso open seasons are the latest in a flurry of market activity to 
expand or build new natural gas pipelines California, where demand for 
natural gas is expected to surge to meet demand from a growing number of 
gas-fired power plants being built or scheduled for construction. 
Natural gas is already used to generate about a third of California's 
electrcity. 
Since April 1999, the state has approved 13 major gas-fired power plant 
projects with a combined generation capacity of more than 8,900 megawatts. 
Nine gas-fired power plants, with a total generation capacity of more than 
6,000 megawatts, are under construction. 
Over the past two months plans to build or expand gas lines serving 
California have been announced by Enron unit Transwestern, Sempra Energy unit 
Southern California Gas Co, Williams Cos' Kern River Transmission, Pacific 
Gas & Electric Corp. unit National Energy Group, Questar Corp. , Calpine 
Corp. , and Kinder Morgan .

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


Software Promises Bandwidth Broker In A Box
By Erwin Seba
Of DOW JONES NEWSWIRES

05/11/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

HOUSTON -(Dow Jones)- Call it a bandwidth broker in a box. 
That's perhaps the easiest way to describe the promise of Invisible Hand 
Networks Inc.'s Merkato software system.
Merkato, which the Burlington, Mass., company is planning to roll out in the 
coming months, assesses the amount of bandwidth being used on a network and 
then electronically offers the unneeded portion to others for sale. 
Like existing online bandwidth trading platforms, Merkato, named for the 
Italian word for marketplace, can be operated manually by the network 
operator. Unlike other online services it can operate automatically. 
"Bandwidth traders are trading circuits and they're trading circuits between 
carriers," said Invisible Hand Chief Executive Glenn Ricketts. "True 
liquidity is not going to be created by carriers trading circuits." 
Bandwidth traders and industry analysts are skeptical about Merkato living up 
to its promise for real-time, scalable bandwidth provisioning. 
"It's a solution in search of problem," said a bandwidth brokerage founder. 
"Algorithms shouldn't clear trades, people should - with algorithms 
supporting and advising their potential decisions." 
Software Built On Algorithms 
Algorithms are at the heart of Merkato's operation. The algorithms were 
developed by Nemo Semret, one of the company's founders, while pursuing his 
Ph.D. in electrical engineering from Columbia University. 
Semret developed what's essentially a mathematical model using game theory 
and market economics for auctioning bandwidth, an instantly perishable 
commodity, Ricketts said. 
Merkato contacts other Merkato users to see if they are buying or selling 
bandwidth. It will then execute the trade automatically or it will come back 
to ask approval to execute the trade or seek more guidance if some of the 
conditions set for the trade aren't met. 
Software platforms like Enron Online or those provided by brokers require a 
person to set prices and execute the trade. 
"It'll be great if it works," said William Bandt, an analyst with Arthur 
Andersen L.L.P. "The devil is in the details. This dynamic allocation could 
be a big deal." 
One early user of Merkato, Thin Portals Network in New York, has been testing 
the software for three months. The company is a managed hosting and 
colocation facility. 
"It's a way to create an auction, a new market, very easily," said David 
Simon, head of Thin Portals. "It's an exchange in a box. All you need is the 
product and the connectivity. It's just that easy." 
Simon declined to say exactly how he plans to use Merkato. 
Invisible Hand hopes to license the Merkato software to carriers and 
bandwidth providers who want to sell excess capacity to their clients. 
-By Erwin Seba, Dow Jones Newswires, 713-547-9214 erwin.seba@dowjones.com

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


Sierra Pacific Resources Posts 1st-Quarter Loss, Blames Western Power Crisis

05/11/2001
Dow Jones Business News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

LAS VEGAS, Nev. -- Sierra Pacific Resources posted a first-quarter loss, 
citing the effects of the Western power crisis on its utility operations, as 
well as deregulation and the aborted plan to acquire Portland General 
Electric. 
The holding company on Friday reported a loss of $83.5 million, or $1.06 a 
share, compared with net income of $18.2 million, or 23 cents a share, a year 
earlier.
Revenue jumped 88% to $737.9 million from $392.6 million. 
Operating revenue for Nevada Power, one of the company's utility operations, 
rose 83% to $359 million on higher sales and new customers in fast-growing 
Las Vegas. However, the revenue gains were more than offset by increases in 
wholesale power and fuel costs and a write-down of uncollected accounts from 
power sales to California last year. 
Revenue for Sierra Pacific Power, its other utility operation, nearly 
doubled, to $376.3 million, but those gains were also largely offset by 
soaring wholesale power costs. 
Sierra Pacific (SRP) said it had to deal with "unprecedented" increases in 
the cost of wholesale fuel and power purchased under an old rate structure 
that limited its ability to recover the full costs through rates. Since then, 
new legislation has been passed and signed by the governor that allows Nevada 
Power and Sierra Pacific Power to recover the full amount of those costs 
through rates. 
Also contributing to the first-quarter loss were one-time expenses related to 
Nevada's decision to repeal deregulation, and expenses from the termination 
of the company's planned acquisition of Portland General Electric. In a 
decision that was widely expected, Sierra Pacific and Enron Corp. (ENE) said 
late last month that they had ended their $2 billion agreement for Sierra to 
buy Portland General, an Enron subsidiary. Enron's president and chief 
executive had warned in March that the transaction would be difficult to 
complete in the regulatory and legislative environment in California and 
Nevada. 
"These losses are significant and profound evidence of just how serious the 
energy crisis is in the West and the threat it could have posed to Nevada," 
Chairman and Chief Executive Walt Higgins said in a written statement Friday. 
"However, the actions by the governor, the legislature and continued focus by 
our public utilities commission on actions that ensure reliable energy supply 
can and will be a major factor in putting this dark chapter behind us and 
distinguishing Nevada as a favorable environment for needed energy 
investment," he said. 
"With these solutions now in place, we look forward to restoring earnings 
performance that reflects the true underlying strength of our operations in a 
growing market," Mr. Wiggins added. 
Copyright (c) 2001 Dow Jones & Company, Inc. 
All Rights Reserved

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


India Must Split Power Industry to End Debt Crisis (Update1)
2001-05-11 10:48 (New York)

India Must Split Power Industry to End Debt Crisis (Update1)

     (Adds comment from a minister in the seventh paragraph.)

     New Delhi, May 11 (Bloomberg) -- India must separate
subsidized rural power sales from urban electricity supplies to
curb mounting debts at state utilities that can't pay for
purchases from generators, a government panel said.
     Subsidies and theft caused debts to producers at the state-
run electricity boards of the country's 28 provinces and two
central territories to reach 406 billion rupees ($8.7 billion) in
February.
     Utilities must be allowed to sell bonds to raise money to
clear those debts, according to a 28-page report by the Montek
Singh Ahluwalia Expert Group.
     Forced to sell subsidized power to farmers and hurt by power
thefts estimated by the World Bank at 18 percent, India's state-
run electricity boards are unable to pay for electricity from
generators.
     Dabhol Power Co., 65 percent-owned by Enron Corp., is in
talks with India's Maharashtra state over 3 billion rupees in
unpaid bills.
     Rising debts have dragged down utilities' credit ratings and
discouraged power producers from investing in new power stations.
Power failures lasting several hours are common in most parts of
the country.
     ``If they don't recover their dues, how can they (power
companies) survive in the business of generation,'' India's
minister for power, Suresh Prabhu, said at conference called to
unveil the report.

                            Bottleneck

     If utilities cleared their debts to state-run producer
National Thermal Power Corp., which accounts for a fourth of
India's power generation, at least 8,000 megawatts of additional
capacity may be built, narrowing the gap between demand and
supply, the Ahluwalia panel report said.
     The panel, headed by Ahluwalia, until recently a member of
India's Planning Commission and now selected to head the
International Monetary Fund's evaluation office, was formed in
March after Prime Minister Atal Bihari Vajpayee met chief
ministers of all states and obtained their consensus to try to
tackle the state boards' debts.
     The report -- titled ``On Settlement of Outstanding Dues &
Capital Restructuring of the State Electricity Boards'' -- says
private investors would be interested in taking a stake in the
state-run business of power distribution only if provincial
governments take the responsibility of selling subsidized power to
farmers through a separate distribution unit.
     Separating urban and rural sales will also make it easier to
stamp out power thefts, which are ``currently camouflaged as
subsidized sales'' to farmers, the report said.

--Ravil Shirodkar in the Mumbai newsroom (91-22) 233-9029, or at
rshirodkar@bloomberg.net/ with Anindya Mukherjee in the New Delhi
newsroom, or at amukherjee@bloomberg.net /am /rhj





  Interview: Enron Chairman Ken Lay
  Date      May 10, 2001
  Time      06:00 AM - 06:30 AM
  Station   Bloomberg Information TV
  Location  Network
  Program   Bloomberg News


              Prue Lewarne, co-anchor:

              Well, right across the board at the political level, the
              corporate level, and the market level, energy is a hot
              story at the moment.

              Dean Shepherd, co-anchor:

              And Enron is, of course, a major player in that sector, and
              our Dylan Ratigan had a chance to catch up with the CEO of
              Enron at the CEO Summit in West Virginia.

              Good morning, Dylan.

              Dylan Ratigan reporting:

              Well, good morning to you.  Major player, indeed.  The
              world's largest energy trader.  Ken Lay is the chairman of
              the firm and he did speak with us last night after the
              news conference, not only about Enron but also about the
              developing crisis in California as we move into the summer.
              I asked him how long it would take to get this thing turned
              around and how bad it'll get in California before it gets
              better.

              Kenneth Lay (Enron Corp):  The higher rates, which have now
              finally been approved, which will go into effect in
              California this month, appear to be just about right
              in--for--in order to get the utilities, at least the--what
              util--SoCal Edison back on its feet and maybe PG&E out of
              bankruptcy.  But--but then again, there are so many other
              pieces to that from the standpoint of--of restructuring the
              market where, in fact, you do have direct access, consumers
              can, in fact, pick other suppliers.  And maybe, over
              time--eighteen months, two years--even the large,
              commercial industrial customers do their electricity the
              same way they do their gas.  They buy it directly and buy
              from competitors, and, of course, buy it from people other
              than the utilities or other than the state.  But I think,
              at the same token, we need to pu--be pushing very hard on
              peak pricing, much higher price during the peak periods
              this summer even, and much lower during the non-peak
              periods.  A more aggressive demand buy-down program where,
              in fact--

              Ratigan:  What about more power generation?  I mean,
              to--to offset the--the--the h--the extraordinarily high
              prices relative to any measure of history.

              Lay:  They absolutely need more generation.  I was going
              to come to that next.  And that--and that is to streamline
              the process so, in fact, you can site and build power
              plants a lot quicker.  And as you well know, through the
              whole decade of the 90s, there were no major new power
              plants built in California.  Matter of fact, their power
              generation capacity went down somewhat at the same time
              the economy's growing fast.  They've got to start building
              power plants in the state of California.

              Ratigan:  Taking this to the purely business side of--of
              power and what Enron is, to what extent has Enron benefited
              from the--the--the demand and relative shortage of power
              generation, and to what extent will Enr--Enron
              (unintelligible) continue to benefit from th--this reality
              from a power generation standpoint?  And to what extent?

              Lay:  Well, now, f--first of all, we don't have any
              generation in the state of--of California, but we are a
              major supplier, one of--one of the major suppliers to
              California, both suppliers of natural gas and electricity.
              And--and obviously, there's been a lot of volatility in
              that market, and s--it's been a very strong market.  So
              it--it has been of some benefit to Enron.  But we're not
              well-served by--by a market that's that volatile and that
              unstable.  And that's the reason we've been working very
              hard to see if we can come together with other people to
              find a way to solve it.  And again, the--the--

              Ratigan:  But you do benefit in the short term, however,
              by virtue of the higher pricing that you're able to
              gay--get for the--what you're delivering to the state, no?

              Lay:  We have--we have benefited somewhat, but keep in
              mind, we've got to buy supplies before we sell supplies
              since we don't have generation in the state, or even in the
              West, except for P--Portland General.  So, in fact, we have
              to pay high prices to buy it, and then, of course, we sell
              it at high prices.  So, again, we're getting the--we're
              getting the margin on that, a spread.  The main thing
              that's happened to Enron over the last twelve months or so
              has not been California.  It's been our EnronOnline
              activity, which has become the largest e-commerce platform
              in the world.  We're doing ever three billion dollars
              of--of business a day on it.  And, in fact, it's greatly
              increased our volume, like sixty, seventy percent
              worldwide.  And--and--and that's the main--that's the main
              thing propelling Enron's wholesale growth and profitability
              right now.

              Ratigan:  Is that why--is that why you were able to raise
              your forecast after the most recent quarter?  Is--is that
              the--is that the--the reason?

              Lay:  Yes.  No, b--but--but that was certainly a big
              factor in it because we continue to see very, very strong
              growth and volumes and, of course, even stronger growth on
              a relative basis in Europe than in--in North America.
              But--but--but--

              Ratigan:  Y--are we going to see more of it?  In other
              words, is this g--is the growth--is it coming m--still
              coming?

              Lay:  Our b--our growth in EnronOnline continues
              to--continues to occur.  And so it--it--it just continues
              to be a more powerful tool from the standpoint of--of the
              liquidity in the marketplace and allowing us to do a lot
              more transactions, letting our people to be a lot more
              productive.  I mean, over the last year, in--our
              commercial people have--have been--done five times as
              much--many transactions as they did before EnronOnline.
              So that's just substantially increasing the overall
              business and profitability business.

              Ratigan:  Last question back to California.  To what
              extent are you concerned about legal liabilities
              associated with lawsuits coming out of California to those
              that are in the business of both delivering and generating
              power to that state right now?

              Lay:  We, in fact, believe that there's absolutely nothing
              that we've done that is illegal or incorrect, and--and I
              would guess that's true of the other suppliers and the
              other generators.  I mean, this, I think, is largely a
              matter, again, of trying to demagog the issue, trying to
              distract attention from not putting in place a very
              comprehensive package to solve the problem.  And
              that--thath's what's needed right now.

              Ratigan:  And again, just late last night, Governor Gray
              Davis out in California saying that he thinks that the
              power generators should be willing to accept thirty percent
              less than they are owed.  He thinks that that will be
              necessary, he says, to keep Edison International solvent.
              Of course, Pacific Gas and Electric, a subsidiary of PG&E,
              having filed for bankruptcy just a few weeks back.

              Guys.

              Lewarne:  Dylan, thank you.

                        # # #