INDIA PRESS:DPC,Govt Fail To Reach Stake Sale Pact At Mtg
Dow Jones International News, 09/26/01
US EXPRESSES CONCERN OVER US COS NON-PAYMENT OF DUES IN INDIA
Asia Pulse, 09/26/01
Give us our dues in full: Enron
The Times of India, 09/26/01
Minority Business Council gives small outfits practical assistance
Houston Chronicle, 09/26/01
USA: UPDATE 2-FERC judge sets March deadline in Calif power case.
Reuters English News Service, 09/25/01
Energy independents make pitches for 'merchant' electric plants
Associated Press Newswires, 09/25/01
Govt for stay on DPC arbitration
The Times of India, 09/25/01
Judge Delays California Refund Report Until March 8 (Update3)
Bloomberg, 09/25/01




INDIA PRESS:DPC,Govt Fail To Reach Stake Sale Pact At Mtg

09/26/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI -(Dow Jones)- Enron Corp.'s (ENE) unit, Dabhol Power Co., and India's federal government have failed to reach an agreement on selling DPC's stake in the Dabhol power project, reports the Business Standard. 
After the two-day meeting, DPC refused to accept the government's offer to sell its stake in the $2.9 billion power project at a 20% discount, the report says, quoting unnamed government sources. 
"At the meeting, the two sides remained stuck to their respective positions and haven't made any progress so far," the newspaper quoted one of its sources as saying.
According to the report, the government won't take a stake in the 2,184 megawatt Dabhol project located in the western Indian state of Maharashtra. The government won't even allow any state-owned company to buy a stake in Dabhol, the report added. 
As reported, Enron, which holds a 65% stake in Dabhol Power Co., threatened to pull out of the project following payment disputes with its sole buyer, the Maharashtra State Electricity Board, and the failure of India's federal government to honor its payment guarantee for the project. 
Dabhol is the single largest foreign investment in India to date. 
Newspaper Web site: www.business-standard.com 

-By Himendra Kumar, Dow Jones Newswires; 91-11-461-9426; himendra.kumar@dowjones.com

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


US EXPRESSES CONCERN OVER US COS NON-PAYMENT OF DUES IN INDIA

09/26/2001
Asia Pulse
(c) Copyright 2001 Asia Pulse PTE Ltd.

NEW DELHI, Sept 26 Asia Pulse - The United States today expressed serious concern over non-payment of dues of American companies by state utilities saying it was effecting foreign investment climate in the country. 
"Investment climate in the country has been seriously affected by non-payment of dues to some of the companies in Orissa, Maharashtra and Tamil Nadu. This was effecting fresh foreign investment in the country," David L Pumphrey, Deputy Assistant Secretary for International Energy Cooperation in the US Department of Energy, said in a video conference from Washington.
Without naming the payment problems engulfing US$2.9 billion Dabhol Power project promoted by Enron and AES Corp promoted transmission company in Orissa, Pumphrey said such problems did not help India's cause for more FDI. 
Pumphrey, who was speaking at the conference, organised by Embassay of the USA, hoped that the govenment would do the needful to find an amicable solution soon. 
"What we understand is that there are political differences over the Enron issue. But fundamentally there is a desire to find a solution," he said. 
The Deputy Assistant Secretary said US was willing to cooperate with India in sectors like natural gas, coal and compressed natural gas (CNG) for public transport vehicles. 
(PTI) 26-09 1707

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

Give us our dues in full: Enron
Pradipta Bagchi

09/26/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)

MUMBAI: Enron Corp chairman Kenneth Lay has raised the stakes further. In a letter to Prime Minister Atal Behari Vajpayee, the Enron chairman has warned that the Indian government's failure to respond to his proposal --that the government or its agencies buy-out the equity in DPC for the actual cost of $1.2 billion--will have severely adverse consequences for the Indian economy. 
A copy of the letter, written just three days after the attacks on New York and Washington, is available with The Times of India.
``Since we have not received any response, we are left with no option other than to vigorously pursue our legal claims.'' The letter states that Enron's cumulative claims will top $4 billion or Rs 20,000 crore in an arbitration. 
Reacting to the proposal by financial institutions like IDBI to buy out the equity at a discounted price of $400 million, Lay says that this is unacceptable. ``I believe receiving anything less than our full investment to be an act of expropriation by the GOI.'' 
He added that any attempt by the financial institutions to foreclose assets would be seen as expropriation. As per US laws, any government which is found to have expropriated the property of US firms automatically faces sanctions from that country. 
In an implicit threat that India's foreign investment may take a direct hit, Lay's letter states that contract-breaking by the government authorities has become a tactical device used as per the dictates of commercial and political circumstances. 
``Any other foreign investor or lender is going to ask himself why his contract is any more likely to be honoured than ours has been. Following a protracted and highly publicised litigation, I do not believe that the GOI will ever be able to answer that question,'' he adds.

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

Sept. 26, 2001
Houston Chronicle
Minority Business Council gives small outfits practical assistance 
Reaching out 
By DAVID KAPLAN 
Copyright 2001 Houston Chronicle 
In 1983, Rick Cortez was a field technician for Southwestern Bell. It was a year after the breakup of AT&T, and Cortez and his co-workers could see that layoffs were imminent. 
Before Cortez could get a pink slip, he quit. He decided to start his own business. 
It was hard convincing his wife, Marcia Cortez, who was nine months pregnant with their first child, that he was making the right decision. 
These days his idea to start MCA Communications looks very good. MCA is projecting revenues of $13 million for 2001, and Cortez has 180 employees. 
MCA's success is in part a result of help it received from the Houston Minority Business Council, a 28-year-old nonprofit group that assists local minority businesses by networking them with corporations and providing them with educational opportunities. 
Today, HMBC will hold its annual Houston Minority Business Expo at the George R. Brown Convention Center. For years Cortez has networked at the Expo. This will be MCA's first year to exhibit. 
Over the years, Cortez said, HMBC has helped him build relationships and alliances with other minority businesses and corporations. Soon after MCA was established, HMBC gave Cortez a scholarship to study management training at the Kellogg Graduate School of Management at Northwestern University. HMBC also made it possible for him to receive mentoring from officials at Exxon. 
MCA Communications specializes in the installation and maintenance of voice data and fiber-optic network equipment. Its clients include Exxon, Enron and Reliant Stadium. 
Cortez said that his company is constantly seeking new markets. Its most recent strategy, in light of terrorism threats, is "disaster deterrent projects." 
MCA plans to install security cameras in remote areas of water and chemical plants, using fiber-optic cable. Art Sanchez, MCA's fiber-optic division manager, is spearheading the project. 
MCA also responded to a recent local crisis. When Tropical Storm Allison hit Houston, MCA sent more than 100 of its people, including Cortez, to the Texas Medical Center to help restore communications. Its main focus was Memorial Hermann Hospital, Methodist Hospital and the VA Medical Center. 
Most of MCA's employees got paid for that work, but, Cortez said, "they didn't care what they were making. The object was to get communications up and running." 
"MCA Communications is a clear example of how minority business development benefits us all," said Richard Huebner, executive director of HMBC. 
"Rick and his staff have utilized many of the resources available through HMBC to become a leader in quality, innovation, responsiveness to marketplace trends, and customer service," Huebner said. 
"You will find Rick Cortez and MCA Communications active in the community and always willing to lend a hand to other entrepreneurs." 
Gary Stumpf, a design engineer with MCA, joined the company four months ago and said he likes his new boss's attitude. 
"I like people that get on fire," Stumpf said. "Rick is, `Let's go after the business.' He's got the drive." 
Cortez said he is excited to have the Reliant Stadium account, which he obtained in an alliance with Siemens. MCA has also partnered with MCI to provide phone repair service across Texas. 
Part of Cortez's business philosophy is to give professional opportunities to his employees. 
"We believe in promoting from within," operations manager Gus Lopez said. "I started out as a technician." 
Sally Martin, MCA's manager of public relations, began as a company receptionist. 
Cortez said other employees have come to MCA with minimal experience and are now in positions as high as vice president. 
"A lot of young employees come in and eventually move to large corporations," Cortez said. "A lot of them are now our customers. Some have come back to MCA." 
Cortez said he believes that "if a business is run like a family it will take care of itself." 
That's why MCA offers 100 percent employer-provided medical insurance and a 401(k) plan. 
MCA has paid for employee injuries even if they are not work-related, according to Martin. 
Another part of his business strategy, Cortez said, is to "deliver services at a good price to our customers. It's cheaper to keep an account than track down new ones every day." 
Before establishing MCA, Cortez worked as a Southwestern Bell field technician beginning in 1975. After AT&T's breakup, he said he saw an opportunity for small businesses to cater to larger companies. 
With two other former Southwestern Bell employees he started MCA in 1983. The other two partners left during the first year. "They didn't have enough faith," Cortez said. 
He acknowledged that the first years were extremely difficult. "It was a new industry we were going after -- trying to convince large companies to use us for outsourcing given the fact that they were cutting back on manpower." 
Cortez began taking advantage of HMBC a year after MCA started. 
He said he wants to take his company "to the next level," but doesn't want to become a behemoth. 
"We want to be small enough to care and large enough to do the projects," Cortez said. "Too large and we'd lose control of our customers and employees." 
One way MCA plans to get to its next level, Sally Martin said, is by continuing to invest lots of time with HMBC and volunteering with organizations that support it. 
"It opens doors," she said. 

USA: UPDATE 2-FERC judge sets March deadline in Calif power case.
By Chris Baltimore

09/25/2001
Reuters English News Service
(C) Reuters Limited 2001.

WASHINGTON, Sept 25 (Reuters) - A Federal Energy Regulatory Commission judge on Tuesday postponed until March a key report on whether California is entitled to refunds of nearly $9 billion for wholesale power purchases when prices soared in the past year. 
California, the nation's richest and most populous state, claims that electricity suppliers deliberately inflated prices last winter. A ten-fold increase in wholesale prices triggered blackouts and the bankruptcy of PG&E Corp.'s Pacific Gas & Electric Co., the state's biggest utility.
Power suppliers - which include Enron Corp., Reliant Energy Inc. and Williams Cos Inc. - say the jump in prices simply reflected market conditions. 
FERC Administrative Law Judge Bruce Birchman set March 8, 2002, as "the outer-most deadline" to submit a final report to FERC commissioners on his findings, abandoning his earlier plan to issue a final report in November. 
"That's what has got to happen. You can't go beyond that," Birchman told reporters. 
The judge agreed to delay the case to allow more time for the California Independent System Operator (ISO) and the now-defunct California Power Exchange (PX) to complete hundreds of thousands of price calculations for the disputed refund period of October 2000 through January 2001. 
The California ISO runs the state's electric power grid. The California PX, which managed a computer-run statewide power auction, filed for bankruptcy in March. 
Birchman's recommendations in March will be considered by FERC commissioners for further action. 
PACFIC NW CASE HAS DIFFERENT ISSUES 
Birchman shrugged off a report issued on Tuesday in the separate but similar FERC proceeding on refunds sought by Pacific Northwest buyers. 
FERC Judge Carmen Cintron recommended that agency commissioners deny demands by Pacific Northwest utilities and wholesale buyers for $1.9 billion in refunds. 
"Her issues - they're discrete from mine. They're quite different. I don't believe what was done there is related here," Birchman said. 
In July, FERC commissioners ordered two separate 45-day mediation periods for California and the Pacific Northwest for power suppliers and state officials to fashion a compromise. Birchman oversees the California case. 
Under the new timetable in the California refund case, the California ISO must supply crucial wholesale price and market data by Dec. 7, which will start the 45-day settlement clock running, the judge said. 
The ISO has repeatedly pleaded for more time to complete a sophisticated computer model to analyze the amount of wholesale power bought and sold over the refund period. 
The price data is "the moving target" in the case, Birchman said. "Once we complete the database everything else falls into place," he said. 
CALIFORNIA PX SOON GONE? 
Lawyers in the case raised the possibility that the California PX would no longer exist by the time FERC reached a finding next spring. 
"We cannot guarantee our existence beyond January 1. We are working with a diminishing pool of resources," a California PX lawyer said. The non-profit exchange, which was once a key component of the state's deregulation plan, halted trading last January after a federal ruling that utilities could buy power elsewhere. 
Once the California ISO determines purchase quantities, the California PX will apply its own formulas to calculate potential refunds or offsets. 
"It all hinges on when we get the data," said Lynn Miller, a California PX executive. 
At least one power supplier accused of overcharging expressed disappointment with the delay. 
"We would rather it progressed more quickly. Sooner is better than later," said Elisha Odowichuk, spokeswoman for BC Hydro, the state-owned utility in the Canadian province of British Columbia. 
BC Hydro, which sells electricity to the U.S. via its Powerex trading unit, has denied it overcharged any customers in California. 
Many of California's problems have been blamed on the state's failed deregulation law that barred utilities from passing through higher costs to consumers.

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

Energy independents make pitches for 'merchant' electric plants
By CHARLES WOLFE
Associated Press Writer

09/25/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

FRANKFORT, Ky. (AP) - Some of the biggest names in unregulated power production got a chance Tuesday to pitch free-market electric plants to Gov. Paul Patton and his board of energy advisers. 
The companies, which include Enron Corp., Dynegy and Duke Power North America, have plans pending for about two dozen "merchant" electric plants around the state.
The plants would be unregulated and relatively small. Most would sell electricity on long-term contracts to selected customers in other states. Many would be gas-fired, but some plan to burn coal or coal waste. Some would operate only during periods of peak demand. 
Though not subject to regulation by the Public Service Commission, all need air-quality permits from the state. Patton has imposed a moratorium on further permit applications while his energy policy board and the commission study how merchant plants would likely affect existing electric systems. 
Questions include: Who would pay for new transmission lines that would be needed? How deeply would merchant plants eat into Kentucky's "environmental credits" - federal allowances for air pollution? 
Merchant plants, which can be built more quickly and less expensively than regulated generators, are uniquely suited to satisfy sudden power demands, proponents say. 
"As far as we're concerned, utilities need to get out of the generating business," said Samantha Slater, manager of state and regional affairs for the Electric Power Supply Association, a trade group for unregulated power companies. 
"Let us" do the generating, Slater said, and let regulated utilities handle distribution. 
Patton sprang to the defense of a regulated market, which he said is not without problems but also not prone to wildly fluctuating energy prices. 
If even a third of all proposed merchant plants were built, electricity would become "cheaper than dirt," and some power companies would not survive, Patton said. "Then all of a sudden, people wake up one morning, and it's like California" - wracked by outages as utility companies fell into financial turmoil. 
Patton also said Kentucky ratepayers should not be billed for the cost of new transmission lines merchant plants would require - a position held by Kentucky's regulated utilities. 
Slater said her association agrees that users of the electricity should pay for new lines. So did representatives of some of the potential developers, including Frank Brayton of DPL Energy, an unregulated affiliate of Dayton Power & Light in Ohio, and Doug Colbeck of Duke Energy. 
DPL Energy has proposed to build a gas-fired plant near a Texas Gas transmission line in Breckinridge County. Duke Energy is developing a site in Marshall County and considering a second site in Metcalfe County. 
All the companies said the same thing about locating in Kentucky: The state has a multitude of sites that are near gas pipelines and electrical transmission stations. "We try to find sweet spots," Colbeck said. 
The debate is to continue in at least two more hearings before the energy policy board and one before the PSC. 
"We want to make sure Kentucky is served first," Martin Huelsmann, chairman of the Public Service Commission, said in an interview. 
If a major independent wants to sell electricity to New York or Florida, "that's fine as long as the native load is served, and the lights come on in Kentucky."

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

Govt for stay on DPC arbitration
Vidyadhar Date

09/25/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)

MUMBAI: The Maharashtra government has decided to file a civil suit in the Mumbai high court seeking a stay of the three arbitration cases instituted against the state of Maharashtra by Dabhol Power Company (DPC) of Enron. 
However, differences have cropped up on the arguments in the suit. State government counsel S.G. Aney said a strong case would have to be made against Enron by showing that the company had committed a fraud and had acted against the public interest. Mr Aney argued that it was not sufficient to get a stay; the plea should be that the power purchase agreement (PPA) itself was void.
Top ranking government officials felt that the arguments were too strong and would not be supported by facts. They also feared that the issue would reflect on the functioning of the bureaucracy. The case was discussed at a meeting held recently by chief secretary V. Ranganathan. Mr Aney has subsequently withdrawn from the case. The government has decided to use the services of Rafique Dada and some other senior lawyers. 
Mr Aney has argued that the government suit should be broad-based, it should not merely seek temporary relief. The suit should pray that the high court declare the three contracts with Dabhol as unenforceable and void. The three agreements are agreement of guarantee, agreement of state support and agreement of supplementary state support. 
The agreements have been entered into by the state as a consequence of the power purchase agreement. They seek to protect the rights of DPC under the PPA and more particularly in the event of the failure of the Maharashtra state electricity board (MSEB) to meet its obligations. 
Mr Aney said the argument should be that the agreements are void because of various factors. 
DPC made material misrepresentation to MSEB about the plant's capabilities. The state relied on similar misrepresentations and executed the agreements. 
The frauds, he argued, relate to two areas. DPC, he said, should not have invoked the guarantee of the state for seeking payment of dues from MSEB since the plant had defaulted. Secondly, the amount claimed by the government was based on false and incorrect inputs. 
The three agreements which commit the state exchequer to unbearable finance burden can only be met by a major diversion of funds. However, a serious challenge to the agreements can be made on the ground that the agreements are contrary to public interest and thus void. 
Mr Aney argued that the agreements were restrictive of freedom of speech and expression as these prohibited elected representatives from publicly discussing the concerned issues. The state is not empowered to enter into the three agreements without the authority of law permitting it to do so. They could not be entered into as mere executive actions. They would require specific legislative empowerment, Mr Aney argued. 
Government sources said Mr Aney has not specifically shown how a fraud had been committed by Enron. The Nationalist Congress Party (NCP) is also upset over the allegation of fraud as it implies that the fraud had been committed in collaboration with the powers-that-be in the state government when the agreement was reached during the chief ministership of Sharad Pawar. 
Pradyumna Kaul, energy activist and management professional said a strong case could be made out against Enron in the light of the Godbole Committee report and other additional information which is now available. Even during the Sena-BJP administration, a case of fraud against Dabhol had been made out by the noted lawyer Fali Nariman, he said. 
Besides, he said Enron's image had taken a beating in the United States in the past few months. There was a growing credibility gap between the company and Wall Street. Enron's stock is trading under a cloud, investor confidence was not high and questions were being raised about the company's accounting practices. Enron sources said they were aware of investors' concerns and they were looking at ways to give more information to investors.

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

Judge Delays California Refund Report Until March 8 (Update3)
2001-09-25 21:30 (New York)

Judge Delays California Refund Report Until March 8 (Update3)

     (Adds comments from ISO, California governor's spokesman,
starting in seventh paragraph.)

     Washington, Sept. 25 (Bloomberg) -- The judge who will
recommend whether Enron Corp., Duke Energy Corp. and other power
sellers owe California as much as $8.9 billion in refunds for
electricity sales has postponed his recommendations until March 8.

     Federal Energy Regulatory Commission administrative judge
Bruce Birchman said today that California's grid operator needs
more time to collect information about power sales during the
October-through-January refund period. This is the second time he
postponed his report. Birchman originally said he would make his
recommendations to the commission by Nov. 5, then delayed it to
Dec. 13.

     California demanded the refunds, charging that the power
sellers inflated electricity prices. Power providers blame the
fourfold increase in the average price of power in California from
January to June compared with a year earlier on supply not keeping
up with demand.

     ``I'm not surprised the judge is having trouble finding
evidence because I don't think that refunds are due from
anybody,'' Enron spokesman Mark Palmer said.

     California's now-defunct Power Exchange has said it's having
trouble getting accurate sales information from the California
Independent System Operator, which operates the state's grid.
Under the new schedule, the exchange will have to submit final
records Jan. 22. Birchman set hearings on some issues in the case
for Dec. 17-21. The Exchange was the marketplace where the state's
three investor-owned utilities had bought most their power.

                              Dispute

     Commissioners asked Birchman to hear the case after power
sellers and California officials couldn't agree on refunds during
two weeks of FERC-ordered talks.

     The Independent System Operator initially had been asked to
provide only basic data justifying its refund requests, which it
has done, ISO spokesman Gregg Fishman said. The agency has now
been asked by Birchman for more detailed data, which will take
about 10 weeks to compile, Fishman said.

     ``We're happy to do it,'' Fishman said. ``It's imperative we
do it. But there are limitations on how quickly we can make it
happen.''

     A spokesman for California Governor Gray Davis, who has been
lobbying for the refunds, said the sooner the state gets the
refunds, the better off it will be.

     ``There simply is no reason for continued procrastination and
delay for the money that we are owed,'' Davis spokesman Steve
Maviglio said.