Viacom Drops Blockbuster Split-Off Plan --- Rebound in Video Business 
Produces an About-face In Strategy for the Unit
The Wall Street Journal, 03/28/01

Bush Names 2 to Panel Monitoring Energy Markets
The New York Times, 03/28/01

Enron pays Lay $7 million bonus for 'strong' year
Houston Chronicle, 03/28/01

JAPAN: Enron presents power plant plan to Japan govt.
Reuters English News Service, 03/28/01

Enron's Japan Venture Submits Pwr Proj Plan To Local Govt
Dow Jones Energy Service, 03/28/01

Dubai "Desperate" For Gas To Power Its Industries - ENOC
Dow Jones International News, 03/28/01

India: Centre may bar States' direct access to funds
Business Line (The Hindu), 03/28/01

PowerGen, Enron exit race for Vijayanagar project pie, L&T wooed
Business Standard, 03/28/01

Enron foraying into wind power via subsidiary
Business Standard, 03/28/01

Big Rate Hikes
Los Angeles Times, 03/28/01

CEO says Texas in good shape for electricity deregulation
Associated Press Newswires, 03/27/01

Power companies gear up for deregulation pilot program
Associated Press Newswires, 03/27/01

USA: Enron CEO says Calif. rate hike will help.
Reuters English News Service, 03/27/01

USA: Enron rewards Lay with $7 mln bonus.
Reuters English News Service, 03/27/01

Powergen, Innogy Look to Profit From New Power System (Update1)
Bloomberg, 03/27/01

Enron CEO Sees 2001 Revenue at $160 Billion to $170 Billion
Bloomberg, 03/27/01

U.S. Companies Push for Private Lenders to Finance Exports
Bloomberg, 03/27/01



Viacom Drops Blockbuster Split-Off Plan --- Rebound in Video Business 
Produces an About-face In Strategy for the Unit
By Martin Peers
Staff Reporter of The Wall Street Journal

03/28/2001
The Wall Street Journal
A3
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW YORK -- Viacom Inc. is finally giving up on its long-stalled plan to 
split off its Blockbuster Inc. unit, saying that the video-rental giant's 
business has turned around so well in the past few years that it wants to 
keep it. 
For more than a year Viacom has said it was waiting for a recovery in 
Blockbuster's stock -- long stalled below its offering price -- before it 
went ahead with previously announced plans to split off the remaining 82.3% 
of the publicly traded unit. But Viacom now has "no plans" to do the 
split-off, Viacom President Mel Karmazin said in an interview. Mr. Karmazin 
said the change in Viacom's attitude largely reflects a significant 
turnaround in Blockbuster's core video-rental business.
"Blockbuster has been picking up market share and growing the business," Mr. 
Karmazin said, adding that Viacom was "very enthusiastic about its future 
prospects." 
Viacom will formalize its new stance in its 10-K annual report, expected to 
be filed with the Securities and Exchange Commission in the next couple of 
days. 
Viacom's change of mind is likely to spark speculation that the company will 
make an offer to buy the 17.7% of Blockbuster stock outstanding that is in 
the public's hands, to make it easier to tap the cash now being generated by 
the chain. Mr. Karmazin declined to comment on that yesterday. 
It is the latest twist in Viacom's long saga with Blockbuster. When Viacom 
originally acquired the business in 1994, it hoped it would be a cash cow 
that would help pay for the Paramount Communications acquisition that year. 
But instead, Blockbuster turned into a problem child, as growth in the video 
market ground to a near halt and the unit spent most of its cash on building 
new stores. By 1997, it was a drag on Viacom's stock. 
But the situation has turned around. Blockbuster's video-rental business is 
growing strongly while many of Viacom's advertising-dependent businesses, 
especially television and radio, are likely to be affected by the weakening 
economy. Blockbuster has been able to grab market share, reflecting fading 
competition from other chains and independent stores. It also has scaled back 
its store-building plan, so it is generating cash. 
Although Viacom started talking about creating a separate stock for 
Blockbuster in 1997, it wasn't until August 1999 that Viacom sold a minority 
stake in an initial public offering. At the time Viacom planned to unload 
within about a year of the IPO its remaining Blockbuster holding by offering 
Viacom shareholders a chance to exchange their shares for stock in the 
video-rental unit. 
But the IPO didn't do as well as expected. With new technologies on the 
horizon such as video-on-demand, Blockbuster was seen as vulnerable, and 
investors weren't attracted to the stock. Within months of the offering, 
Blockbuster stock was trading below the $15-a-share offering price, which 
damped Viacom's enthusiasm for proceeding with the rest of the split-off. By 
the end of 1999, Viacom said it wouldn't proceed with the split-off unless 
Blockbuster's stock price rose above $20. 
Blockbuster's stock remains considerably below the $20 mark, meaning that the 
unit might not have been fully split off in the near term anyway. And Viacom 
could always change its mind if conditions shift again. But for now, 
Blockbuster appears to be solidly part of the Viacom family. 
Blockbuster stock rallied sharply in the first couple of months of this year, 
from around $8 at the end of last year to a high of $15.10 in late February. 
Its shares rose six cents to $13.30 as of 4 p.m. yesterday in New York Stock 
Exchange composite trading. Salomon Smith Barney analyst David Riedel said 
the rally reflected Blockbuster's performance and expectations that it will 
report a "phenomenal" first quarter. 
Mr. Riedel said he expects Blockbuster to report EBITDA of $582 million this 
year, including losses on new media, on revenue of $5.36 billion. Last year 
the unit generated EBITDA of $534.8 million on revenue of $4.96 billion. By 
comparison, in 1997 Blockbuster had EBITDA of $207.9 million on revenue of 
$3.3 billion. EBITDA, often referred to loosely as operating cash flow, is 
earnings before interest, taxes, depreciation and amortization. 
John Antioco, who took over as chief executive of Blockbuster in mid-1997 and 
is credited with overseeing the comeback, said Blockbuster's U.S. market 
share has risen to 36% at the end of last year from 26% in 1997. He said the 
company expects Blockbuster's share to approach 40% by the end of this year 
and to rise to 50% over the next three years. 
Meanwhile, the specter that new electronic services would hurt Blockbuster 
has faded. Blockbuster's own efforts to roll out a video-on-demand service 
with energy concern Enron Corp. were recently terminated, although 
Blockbuster says it continues to experiment with VOD. 
Business is so strong that Blockbuster now is having to deal with a new 
problem: long check-out lines at stores, where in some cases customers have 
had to wait for 45 minutes. Mr. Antioco said Blockbuster was working to 
relieve capacity problems, noting that the amount of business in the average 
Blockbuster store has grown 35% in the past three years.


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



National Desk; Section A
Bush Names 2 to Panel Monitoring Energy Markets
By JOSEPH KAHN

03/28/2001
The New York Times
Page 14, Column 2
c. 2001 New York Times Company

WASHINGTON, March 27 -- President Bush named two new commissioners today to 
the federal agency that oversees electricity markets, a move that could lead 
to a shift in the agency's largely hands-off approach to California's power 
crisis. 
Mr. Bush named Patrick H. Wood III, head of the Texas Public Utility 
Commission and a longtime ally of the president, to fill a vacant seat on the 
Federal Energy Regulatory Commission. The president also named Nora M. 
Brownell, who serves on the Pennsylvania Public Utilities Commission, to fill 
a second open slot on the commission.
Both appointees, who face confirmation by the Senate, are Republicans who 
support free markets for natural gas and electricity. But Mr. Wood has said 
he believes that the agency needs to do more to ensure well-functioning 
energy markets in California and other places or risk seeing deregulation 
fail entirely. 
''On our best day as regulators, we cannot deliver benefits to customers as 
well as a functional market can,'' Mr. Wood said in a statement today, ''but 
the market must work right first.'' 
Mr. Wood, who has overseen the restructuring of the electricity industry in 
Texas, supported the imposition of a price cap of $1,000 per megawatt-hour 
for wholesale electricity sales there. The measure was designed to ensure 
that prices did not spiral out of control in periods of high demand or low 
capacity, as they have in California. At times in the last year, wholesale 
electricity in California has sold for thousands of dollars per 
megawatt-hour. 
Mr. Wood also supervised deregulation of telecommunications in Texas, an 
effort that earned him a reputation for working to ensure a competitive 
market. 
Curt Hebert Jr., a fellow Republican who is the federal commission's 
chairman, has consistently opposed price caps. Mr. Hebert has contended that 
high prices in California reflect supply and demand, not price gouging by 
power companies, though he has recently supported his agency's policy to 
curtail the highest prices charged during hours of the most acute electricity 
shortages. 
Many Congressional officials and energy industry lobbyists said they expected 
Mr. Bush to name Mr. Wood to replace Mr. Hebert as chairman in the coming 
weeks. But his administration took no action on that front today. 
''At this time, the makeup and leadership of the commission will stay as it 
is,'' said Anne Womack, a White House spokeswoman. 
The question of who will lead the agency has led to a political tug-of-war 
between the president and the Senate majority leader, Trent Lott, several 
Congressional and industry officials said. Mr. Lott has strongly backed Mr. 
Hebert, who like the majority leader is from Mississippi. 
Mr. Hebert issued a statement welcoming the new commissioners. His spokesman 
declined to comment on whether Mr. Hebert expected to stay on as chairman, 
calling it speculation. 
The appointments come as the low-profile agency has come under heavy pressure 
to intervene in California, where wholesale electricity prices have risen 
more than tenfold in the last year. 
The agency has the mandate to ensure ''just and reasonable'' electricity 
prices. But it has wielded its regulatory club with great reluctance, in part 
because Mr. Hebert has opposed intervention in the marketplace. 
The agency staff has often decided against investigating power generating 
companies, though state regulators in California and elsewhere have charged 
that companies routinely manipulate experimental auction markets for 
electricity. 
The agency took its first substantial enforcement action in California 
earlier this month, asking generators to justify some of their prices or pay 
refunds that could total $124 million for January and February. But one of 
the three sitting commissioners and many outside analysts criticized that 
action as arbitrary and limited in scope. 
Some critics of the agency expressed optimism that Mr. Wood would bring a 
fresh perspective. 
''Pat Wood has an entirely different approach than Hebert,'' says Mark Cooper 
of the Consumer Federation of America, a watchdog group. ''He's committed to 
markets, but he is willing to do things to make sure the markets work. He not 
just an ideologue.'' 
He was less supportive of Ms. Brownell, who he said has been ''unwilling to 
recognize'' problems in a Pennsylvania electricity restructuring program that 
has led to higher prices there. 
Energy industry officials said they supported both new appointments. Joseph 
Hartsoe, vice president for federal regulatory affairs at the Enron 
Corporation, said that under Mr. Wood, Texas did a better job of 
restructuring its electricity markets than California has. 
He said Mr. Wood's ties to Mr. Bush could give him the credibility to push 
through changes to energy markets around the country.

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






March 28, 2001
Houston Chronicle
Enron pays Lay $7 million bonus for 'strong' year 
Reuters News Service 
WASHINGTON -- Electricity and natural gas marketing company Enron Corp., 
coming offan "extremely strong" 2000, rewarded Chairman Kenneth Lay with a 79 
percent boost to his bonus, Enron said Tuesday. 
Lay's 2000 bonus shot up to $7 million from $3.9 million in 1999, the 
Houston-based company said in its annual proxy statement filed with the 
Securities and Exchange Commission. 
"In recognition of Enron's extremely strong performance during 2000 relative 
to recurring after-tax net income and other financial measures, Mr. Lay 
received a cash annual incentive award of $7,000,000," the company said. 
Lay's base salary last year was $1.3 million, unchanged from 1999. 
He also received $7.5 million in restricted stock awards as well as options 
for 782,830 shares that could be valued at $35 million if Enron's stock 
appreciated 10 percent annually. 





JAPAN: Enron presents power plant plan to Japan govt.

03/28/2001
Reuters English News Service
(C) Reuters Limited 2001.

TOKYO, March 28 (Reuters) - U.S.-based Enron Corp on Wednesday presented 
plans to build a liquefied natural gas (LNG) fired power plant in northern 
Japan, aiming to become the first foreign company to build such a plant in 
Japan. 
The move brings Enron one step closer to realising its plan to build a power 
plant with an initial capacity of two million kilowatts in Aomori prefecture.
"We submitted our basic plan to build the plant to the governor of Aomori 
prefecture today in line with last November's announcement," Tatsuro Seguchi, 
president of Enron Corp's Japanese affiliate Encom Corp, told a news 
conference. 
"We are aiming to start construction of the plant in 2004 and start 
operations by 2007 since Japan's power market is one of our highest 
priorities," he said. 
The company still needs to clear several hurdles, including an environmental 
assessment. 
In November last year, Encom announced it would spend about 20 billion yen 
($163.8 million) on the new plant. 
Seguchi said, however, that the cost of purchasing land and building 
LNG-related facilities was adding up to more than initial estimates. 
He said the company now expected to spend far more than 20 billion yen and 
possibly over 100 billion yen, but he declined to provide specific figures. 
Seguchi said a plant with an initial capacity of two million kilowatts would 
require the equivalent of two million tonnes of LNG per year. 
The plant, to be built by E Power Corp - a wholly-owned unit of Encom - could 
eventually expand capacity to 3-4 million kilowatts if there is enough 
demand. 
North America's leading buyer and seller of electricity and natural gas set 
up Encom Corp in 1999 with leading Japanese firm Orix Corp to look into 
entering the market. 
Since March last year, non-utility firms have been allowed to sell 
electricity to large-lot industrial users, opening up the cozy industry to 
newcomers. 
Several foreign firms, including U.S. oil major Texaco Inc , and the 
Royal/Dutch Shell Group have also said they are keen to gain a foothold.

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


Enron's Japan Venture Submits Pwr Proj Plan To Local Govt

03/28/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

TOKYO -(Dow Jones)- EnCom Corp. (Japan), a New-York based power venture set 
up by Enron Corp. (ENE) of the U.S. and Orix Corp. (IX), said it submitted a 
basic plan for a large-scale thermal power project in northern Japan to the 
local government of Aomori Prefecture Wednesday. 
According to the plan, EnCom plans to build a gas-turbine combined cycle 
power plant with an initial capacity of 2,000 megawatts in the Mutsu Ogawara 
industrial area in Aomori in the northern part of Japan's main island.
The company also plans to build a liquefied natural gas terminal, including a 
sea berth capable of accommodating 135,000-cubic-meter tankers and LNG 
storage tanks. 
Construction is scheduled to begin in 2004, following an environmental 
assessment and approval from relevant authorities, for commercial operation 
in 2007 or later. 
"We have completed a preliminary study (on the project) that started in 
December," said Tatsuro Seguchi, president of EnCom's Tokyo-based 
wholly-owned subsidiary, E Power Corp. Seguchi, who was speaking to 
reporters, declined to estimate the total cost of the project, which industry 
observers say would cost a few hundred billion yen. 
The Aomori government reiterated that it welcomes the move by EnCom. 
"Building a large power plant that is relatively environmentally-friendly in 
the Mutsu Ogawara area would contribute to the economy and employment in the 
prefecture," Governor Morio Kimura said. 
The proposed project would also help lure enterprises of various kinds to set 
up operations in the area, Kimura said in a statement. 
However, industry sources say there is a large hurdle for EnCom to clear - 
how to secure a massive capacity for power transmission to supply electricity 
to customers. 
Seguchi said EnCom has made a request to Tohoku Electric Power Co. (J.THE or 
9506), a regional power utility serving northern Japan, for leasing its 
transmission lines. EnCom is waiting for a reply from Tohoku, he said. 
EnCom is considering other sites in Japan on which it may build large-scale 
power plants. Candidate sites include Ube in Yamaguchi prefecture, western 
Japan, and Fukuoka Prefecture on the southwestern island of Kyushu. - - 
28/03/01 10-39G 

Up until now, E Power hasn't entered Japan's partially deregulated retail 
power market, Seguchi said. 
Since Japan opened the retail power market for large-lot high-volume 
industrial and commercial users - which represent roughly 30% of total power 
demand - to free competition in March 2000, a number of new entrants have 
been tapping into the country's Y15 trillion industry. 
Seguchi said that other than building its own power stations, E Power is also 
in talks with factories to purchase their excess electricity or revamp their 
aging small generators for resale of the power. Retail power sales via Enron 
Japan Corp., a wholly-owned unit of the Houston-based Enron, is possible, he 
added. 
In August 1999, the U.S. energy and communications giant Enron and Orix 
formed EnCom, in which Enron owns more than 60%, then set up E Power in a bid 
to get a foothold in Japan's power industry. 
-By Maki Aoto, Dow Jones Newswires; 813-5255-2929; maki.aoto@dowjones.com -0- 
28/03/01 10-49G

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



Dubai "Desperate" For Gas To Power Its Industries - ENOC

03/28/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

DUBAI -(Dow Jones)- Dubai is "desperate" for natural gas supplies for power 
generation and industrial use, Hussain Sultan, group chief executive of the 
Emirates National Oil Co., said Wednesday. 
Hussain, speaking at an oil and gas conference, said it is "costing a 
fortune" for Dubai, the United Arab Emirates' second-largest emirate, to run 
its 20,000-megawatt power station with liquid fuels.
Dubai's industrial free port at Jebel Ali and the Dubai Aluminium Co. Ltd., 
which expanded its annual capacity last year to 536,000 metric tons, are in 
extremely short supply of gas, said local observers. 
Hussain said the recently signed "term sheet agreement" between the U.A.E. 
Offsets Group, or UOG, and Qatar Petroleum, to supply 2 billion cubic feet of 
gas a day to Abu Dhabi and Dubai, is a step in the right direction. 
Three weeks ago, QP and UOG signed a $3.5 billion agreement to export 2 bcf a 
day of Qatari natural gas to the U.A.E. 
The project, which will be undertaken by Dolphin Energy Ltd. - in which 
TotalFinaElf (TOT) and Enron Corp. (ENE) each hold a 24.5% stake - plans to 
drill first wells at Qatar's giant offshore North Field in the second half of 
2001 and come onstream in early 2005. 
About 1-1.5 bcf a day of the gas will be consumed by the al-Taweelah power 
plant in Abu Dhabi and the remainder by the Jebel Ali terminal. 
Sources told Dow Jones Newswires Wednesday that Abu Dhabi is considering 
subsidizing the gas supplied to Dubai by Dolphin. However, comprehensive 
pricing and other details of the whole project aren't expected to be 
finalized for another few weeks. 
-By Dyala Sabbagh, Dow Jones Newswires; 9714 3314260; 
dyala.sabbagh@dowjones.com

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


India: Centre may bar States' direct access to funds

03/28/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

NEW DELHI, March 27. THE Centre is planning to prevent access to funds from 
multilateral agencies by State Governments whose financial positions are 
precarious. 
Further, States will not be allowed to directly negotiate on their own 
sectoral loans with the World Bank or any other multilateral institution.
The move is being considered in view of the sudden deterioration in the 
finances of several States, including those with a reputation for fiscal 
discipline. 
Officials here cite the case of Kerala, which is in line for assistance from 
the Asian Development Bank (ADB) under the Public Resource Management 
Programme. This is a State which has a reasonably sound record at additional 
resources mobilisation, but is now facing an unprecedented resource crunch. 
Indeed, so acute is the current situation that the State Treasury is only 
able to pay salaries to Government employees. There have also been instances 
of cheques issued by the State Government bouncing. 
Similar is the case of Maharashtra, which till a couple of years ago, was 
considered the role model for fiscal rectitude, but whose finances have taken 
a severe beating of late, with the Enron payment crisis only accentuating the 
situation. "If we have reached a situation where even so-called 
well-performing States are on the brink of financial emergency, allowing them 
to negotiate loans from multilateral funding agencies on their own is simply 
not prudent," the officials added. 
States which intend accessing sectoral loans will now have to route their 
proposals through a high-level committee constituted recently to monitor the 
States Fiscal Reform Facility. 
The panel, comprising representatives from the Finance Ministry, Planning 
Commission, Reserve Bank of India and State Governments, will essentially be 
the 'one-stop shop' for clearing such proposals. Finance Ministry officials 
said this was being done to avoid the burden of the repayment of the loans 
from falling upon the Central Government, which provides guarantee for 
funding from the World Bank and the ADB. 
Under the present dispensation, multilateral loans are first routed to the 
Centre which, in turn, on-lends them to States. State Governments in effect 
cannot access such loans directly. 
"However, the practice of allowing States to negotiate directly with funding 
agencies often leaves the Centre with no option but to approve such loans as 
it virtually becomes a fait accompli," said officials. 
They said the Centre had already sounded out the World Bank and other 
multilateral agencies on its decision to debar States from entering into 
direct negotiations. 
Earlier, the Finance Ministry was also planning to harmonise core reform 
milestones set out for States by various funding agencies to ensure 
monitoring authorities did not work at cross purposes. 
Based on the recommendations of the EFC, the Finance Ministry recently 
outlined the broad action points for fiscal correction in States encompassing 
reforms in the power sector, public sector and budgetary reforms. 
States have been given the flexibility to draw up their own medium term 
fiscal restructuring policy (MTFRP) based on these action points. 
Officials said the Centre now decided to shelve the exercise of harmonisation 
of reform milestones with the World Bank and other funding agencies as it 
apprehended that such a move could have political ramifications. 
Hema Ramakrishnan 
Shaji Vikraman

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


PowerGen, Enron exit race for Vijayanagar project pie, L&T wooed
Rajesh Unnikrishnan MUMBAI

03/28/2001
Business Standard
4
Copyright (c) Business Standard

Enron and PowerGen, global power majors, have decided to withdraw their bids 
for picking up a 26 per cent stake in the 500 mw Vijayanagar Thermal Power 
Project (VTPP). 
Following their withdrawal, KPCL has initiated talks with domestic power 
equipment giant Larsen & Toubro (L&T) to pick up the stake.
VTPP is promoted by Karnataka Power Corporation (KPCL), the generation arm of 
the Karnataka government. 
An Enron spokesperson said, "In India, Enron will not make any further 
investment till the power sector becomes economically viable". A PowerGen 
spokesman said, "We did not submit the bid." 
However, PowerGen sources said that the company is pre-qualified but decided 
against bidding. The move is in line with the company's decision to get out 
of India. 
Senior officials with L&T said, "We have initiated talks with KPCL for 
picking up a controlling stake in VTPP. Talks are in an advanced stage and an 
agreement will be concluded within a month." 
L&T does not operate any power project in the country, and is the 
engineering, procurement and construction (EPC) contractor for many power 
projects in the country. 
The cost VTPP is estimated at Rs 2,100 crore with a 75:25 debt-equity ratio. 
KPCL is planning to hold a 26 per cent stake in the project. The balance will 
be held by the public and financial institutions. If the ongoing talks 
materialise, L&T as well as KPCL will have to bring in Rs 136.5 crore each as 
equity. 
Sources with financial institutions said that if L&T is finalised as the 
joint venture partner, it may also be the engineering, procurement, 
construction contractor. This might result in L&T picking up a higher stake.

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


Enron foraying into wind power via subsidiary
Partha Ghosh NEW DELHI

03/28/2001
Business Standard
4
Copyright (c) Business Standard

Enron, the US-based multinational energy and communications major and the 
promoter of the naphtha-based Dabhol power project, is making a foray into 
wind power in India. 
Enron Wind, a group company, has applied to the government seeking approval 
to set up a wholly owned subsidiary for assembling, installation, operation 
and maintenance of wind turbines and development of wind farms, said sources.
The company has proposed to make an initial investment of $2 million in the 
new subsidiary which will be increased subsequently. The proposal will be 
considered by the foreign investment promotion board tomorrow, and the 
administrative ministry the ministry of non-conventional energy sources has 
given its consent, the sources said. 
Wind power is not a popular mode of energy generation in the country, and 
previous attempts by private players have not been successful. Enron's 
initiative in the field will be watched with interest, a government official 
said. 
The company has an installed wind power generator adjacent to its Dabhol 
project in Maharashtra which has been continuously gauging the nature of wind 
and the possibilities of using wind as a perennial source of power in the 
country. 
According to the company's official website, the western coast of the country 
has been identified as a possible area of proposed projects. However, the 
site map does not have any information on the exact location of the project. 
On earlier occasions, companies have tried wind power generation in Tamil 
Nadu. The investment in the proposed Indian subsidiary will be made by Enron 
Wind GmbH, Germany. The arm will be based in Mumbai, where Enron's main 
subsidiary is headquartered. 
Enron Wind is one of the largest players in the modern wind power industry. 
Over the last few decades, the company has designed and constructed wind 
power facilities around the world comprising more than 4,500 wind turbines 
and 1,600 mega watts of capacity. 
Enron Wind offers wind turbine technology, skilled project development, 
creative financing options, accomplished power plant design and engineering, 
and experienced and responsive support services.


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


Metro; Letters Desk
Big Rate Hikes

03/28/2001
Los Angeles Times
Home Edition
B-8
Copyright 2001 / The Times Mirror Company

* The Public Utilities Commission's reasons for the rate hike are a joke 
(March 27). It appears that the PUC blames the consumers for the current 
power problems and not the greedy power companies or the lame-duck 
politicians in Sacramento. Greedy people artificially generate this problem. 
Electricity is not a luxury item, but it appears to be becoming one for many 
people. This rate hike is another reason for business to stay out of 
California or to leave. California has driven many companies out already. 
California's economy will suffer and will pay the penalty for this artificial 
mess.
ED WOO 
Long Beach 
* 
I have sat back looking at what the electrical system has been deregulated to 
in the last five years. Loretta Lynch, president of the PUC, now says we have 
to pay over 40% more on our bills. (Cheap power under deregulation.) What 
spot is she looking for in Bush's Cabinet? The PUC, state Energy Commission, 
FERC and Legislature all have their hands in the pot making it worse by the 
day. 
The private companies were doing just great until those loud-mouthed consumer 
advocates got hold of the public ear and lied through their teeth. The public 
better look at what's going on real close so they know whom to vote for next 
election. 
JOHN KELLY 
Yucca Valley 
* 
Cal-ISO, the independent electrical system operator, has recently released 
figures which show that between December 1999 and December 2000 demand for 
electricity increased by less than 1%. Our bills have already gone up, and 
now the knuckleheads at the PUC are suggesting that we raise rates by 40%! 
What are these people doing, and who is representing the interests of the 
citizens over the interests of Duke Energy, Reliant Energy, Enron Corp., et 
al.? We've been robbed for a year by these gougers, and now they want to 
raise our rates so the robbers can reap even bigger profits than the 200% to 
500% gains this year? I smell a revolution coming. 
BRYAN HAYS 
Saugus 
* 
Re "Davis Ducks Reality on Electricity 'Overcharges,' " Commentary, March 27: 
Trying to blame Gov. Gray Davis' management of the power extortion game that 
is going on just doesn't work. Try to shift attention as much as Benjamin 
Zycher and Gary Ackerman want, but they cannot hide the fact that the 
generation companies made good profits when they sold energy for as little as 
10% of what they are able to charge now. I don't buy it. And I don't buy the 
argument that gas "costs" have gone sky-high. Gas "costs" are the same. The 
gas companies have also found ways to just charge more for the same thing. 
Now, with a bought-and-paid-for administration in Washington, they are bold 
enough to just keep on doing it while denying everything. 
I am for canceling deregulation until this group of energy company executives 
are prosecuted, jailed, replaced, made examples of what executives should not 
become, and are just a bad memory. 
BOB GILBERG 
San Diego 
* Economist Ross C. DeVol [of the Milken Institute] is quoted: "Somebody's 
got to pay. We'll pay either as consumers or as taxpayers" (March 26). 
Perhaps he can inform me which of these I am not. 
ANN C. CHISOLM 
Oxnard


PHOTO: PUC President Loretta Lynch; ; PHOTOGRAPHER: Associated Press 

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

CEO says Texas in good shape for electricity deregulation
By BETSY BLANEY
Associated Press Writer

03/27/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

DALLAS (AP) - Enron Corp.'s chief executive and president said Tuesday he 
believes that Texas energy markets are in good shape as the state prepares 
for deregulation. 
Jeffrey Skilling told an audience of about 400 business people at a downtown 
hotel that California "has given the term deregulation a terrible name."
Electric deregulation in Texas officially starts Jan. 1. "In Texas, I think 
we've got a pretty good system," Skilling said. 
In San Francisco on Tuesday, the California Public Utilities Commission 
unanimously approved electricity rate increases of up to 46 percent to try to 
head off blackouts this summer by keeping the state's two biggest utilities 
from going under. 
When California officials set up deregulation they allowed the price of 
wholesale electricity to rise but capped the amount companies could charge 
customers, Skilling said. SoCal Edison and Pacific Gas & Electric say they 
have lost more than $13 billion since last summer because they haven't been 
able to pass on the high cost of wholesale electricity. 
Skilling said Texans are in a much better position and shouldn't worry that 
their state's deregulation would be like the California experience. 
"California, they just put together a crazy system," Skilling said in his 
first public comments since becoming the Houston-based company's chief 
executive officer in February. "The markets in California are the most 
regulated markets in North America today. And that's what is causing the 
problem." 
Enron, the largest energy trader, has been attacked by Californians who 
accuse it of price-gouging. In a swipe at Enron and other traders, Gov. Gray 
Davis said the state should never again allow "out-of-state profiteers to 
hold Californians hostage." 
In Texas this week, lawmakers picked apart the economics of their 1999 
electric-deregulation law that allowed utilities to charge customers 
higher-than-necessary rates to make up for money they were expected to lose 
through investments in nuclear power and coal plants. 
Although nuclear and coal plants were expected to lose value in an 
unregulated market, their value instead increased as soaring natural gas 
prices made gas-fired power plants more expensive to operate. Utilities with 
coal and nuclear plants have reaped extra profits for utilities. 
One legislator is sponsoring a bill to force utility companies to refund 
customers an estimated $7 billion in overcharges allowed under the 
electric-deregulation law passed last session. 
Deregulation is expected to attract close to 20 power companies - including 
newcomers from outside Texas - who will compete for a slice of the 
residential, commercial and industrial market. 
--- 
On the Net: 
Enron: http://www.enron.com 
Texas PUC: http://www.puc.state.tx.us


AP Photo DN102 

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


Power companies gear up for deregulation pilot program

03/27/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

AUSTIN (AP) - Power companies are jockeying for the next phase in electric 
deregulation - a pilot program to let some customers pick their own power 
company beginning June 1. 
In Dallas, competitors hope to lure customers from TXU Corp. are advertising 
heavily in newspapers and over the air waves.
About 20 companies have signed up with state officials to become electricity 
providers, ranging from existing companies to new entrants to the market such 
as New Power Co. and Shell Energy. 
New Power, a spinoff of Enron Corp. established to attract mostly residential 
and small business customers, has signed up more than 5,000 customers in the 
past two weeks. 
TXU, which plans to go outside its North Texas base to compete for customers 
in Houston, professes not to be concerned about advertising designed to lure 
its customers away during the 8-month trial program. 
"Why do you want to spend your advertising dollars when at most only 5 
percent of your customers can choose?" spokesman Chris Schein told the Austin 
American-Statesman. He said TXU will launch a major campaign in January, when 
markets open more broadly. 
"These customers are very astute, and they're going to make every company 
earn their business," Schein said. 
During the trial program beginning June 1, up to 5 percent of a utility's 
customers can switch to another utility. 
Just three weeks into advertising for the pilot program, TXU has more than 
9,000 customers in its service areas interested in other electricity 
providers - about 10 percent of the total that could switch before Jan. 1. 
Houston-based Reliant Energy Inc. has also seen substantial numbers of 
customers switch. 
Only investor-owned utilities such as TXU and Reliant Energy are required by 
Texas law to open their markets to competition on Jan. 1. City-owned 
utilities such as Austin Energy and rural electric cooperatives can choose to 
compete. 
The pilot program has drawn the most interest among large commercial 
customers, said Gary Rasp, a manager in the Austin office of 
Burson-Marsteller, a public-relations agency that the state hired to explain 
deregulation to Texans. 
Smaller businesses have been much slower to embrace electric choice because 
electricity is not as big an expense for them, Rasp said.

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


USA: Enron CEO says Calif. rate hike will help.

03/27/2001
Reuters English News Service
(C) Reuters Limited 2001.

DALLAS, March 27 (Reuters) - Enron Corp. , North America's biggest buyer and 
seller of electricity and natural gas, on Tuesday said a 40 percent hike in 
California electricity rates would help reduce shortages there but more 
deregulation is needed. 
Enron CEO Jeffrey Skilling said he expected California's power shortfalls 
this summer to drive prices for natural gas above $10 from current prices 
around $5 per thousand cubic feet.
"This summer under standard weather conditions that shortfall is likely to be 
5,000 megawatts," Skilling told a Dallas luncheon hosted by Southern 
Methodist University's Cox School of Business. 
Skilling said the rate hike, approved by California's Public Utilities 
Commission, could reduce that power shortfall. But power generators will 
still be scrambling for natural gas for power plants, driving the price 
higher and drawing supply away from industrial uses. 
"That could mean very high prices. I can easily conceive of something north 
of $10, potentially around $15," Skilling said. 
Asked by reporters about the impact of the California rate hike, Skilling 
said it was "a huge step forward in reducing the odds of shortfalls". 
"To date I don't think anyone has been willing to let prices rise to help 
balance supply and demand.... This is step number one," he said. 
But he said a permanent fix to the state's power crunch would require genuine 
deregulation, which he said had not been achieved under California's current 
system. 
Skilling said he expected demand pressure to keep natural gas prices high for 
several years until demand can be curbed or new production be brought into 
play, possibly by increasing the import of liquefied natural gas. 
Building new facilities for shipping liquefied gas, storing it and returning 
it to gaseous form for burning would be expensive but could be attractive as 
long as natural gas prices remain above $3.50 per thousand cubic feet, he 
said. 
"That will take the edge off prices in four or five years," he said. 
Skilling reaffirmed Enron's projected earnings per share of $1.70-$1.75 in 
2001. "We're on track. We're very comfortable" with that estimate, he told 
reporters.

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


USA: Enron rewards Lay with $7 mln bonus.

03/27/2001
Reuters English News Service
(C) Reuters Limited 2001.

WASHINGTON, March 27 (Reuters) - Electricity and natural gas marketing 
company Enron Corp., coming off an "extremely strong" 2000, rewarded Chairman 
Kenneth Lay with a 79 percent boost to his bonus, Enron said on Tuesday. 
Lay's 2000 bonus shot up to $7 million from $3.9 million in 1999, the 
Houston-based company said in its annual proxy statement filed with the 
Securities and Exchange Commission.
"In recognition of Enron's extremely strong performance during 2000 relative 
to recurring after-tax net income and other financial measures, Mr. Lay 
received a cash annual incentive award of $7,000,000," said the company. 
Enron determined the figure by taking into account the pay level for the head 
of a company of comparable revenue size as well as increases in total 
recurring net income and earnings per share, according to the proxy. 
Lay's base salary last year was $1.3 million, unchanged from 1999. He also 
received $7.5 million in restricted stock awards as well as options for 
782,830 shares that could be valued at $35 million if Enron's stock 
appreciated 10 percent annually over the life of the options. 
Most of the options expire on January 10, 2007 and can be exercised at $47.31 
a share. 
Enron's stock was at $60.08 in afternoon trading on the New York Stock 
Exchange, down $1.40. Over the past 52 weeks the shares have been as low as 
$51.55 and as high as $90.56.


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


Powergen, Innogy Look to Profit From New Power System (Update1)
2001-03-27 06:19 (New York)

Powergen, Innogy Look to Profit From New Power System (Update1)

     (Adds company comment in 17th paragraph.)

     London, March 27 (Bloomberg) -- Powergen Plc, Innogy Plc and
other large generators will benefit from a new system of trading
power in the U.K., while nuclear and renewable-energy producers
may find the rules harder going, analysts and executives said.
     The New Electricity Trading Arrangements, or NETA, start
today after a five-month delay. Powergen, Britain's third-biggest
generator, Innogy, the top power supplier, and U.S. rivals such as
TXU Corp. are hoping their mix of coal and natural gas-fired
generation will allow them to make more money trading electricity.
     ``There will be winners and losers,'' said Angelos
Anastasiou, an analyst at Williams de Broe. ``Companies best
placed to survive and thrive under the NETA system are the ones
that have a flexible portfolio of generation.''
     Unlike California, where a shortage of generation has led to
surging prices and blackouts in recent months, the U.K. has more
capacity than it needs. The market regulator, Ofgem, hopes NETA
will increase competition in an electricity market it values at
7.5 billion pounds ($6.7 billion) a year, leading to lower prices.
     Wholesale power prices have fallen about 15 percent in the
last year as companies prepared for NETA, though there is room for
further declines, according to Ofgem.
     ``Since privatization, generating costs have come down by
between 25 percent and 40 percent, but this has not been reflected
in prices,'' Ofgem Chief Executive Callum McCarthy said in a
statement issued by Regulatory News Service.
     Under previous rules, generators facing a temporary supply
interruption weren't penalized if they didn't deliver. Under NETA,
a company that can't produce power it agreed to supply must buy it
on the market. As a result, generators able to supply power from
different sources are most likely to benefit, analysts said.

                    Interruptions

     In addition, the biggest utilities with excess capacity will
also profit from supplying other generators with short-term power
-- at high prices -- when they must buy to meet NETA obligations.
Nuclear plants, which must be run at full output, and companies
that generate power from wind and sun are not so flexible.
     The previous ``pool'' trading system, set up in 1990 when the
U.K. started selling power assets to the public, is run by the
National Grid Group Plc, operator of the country's high-voltage
transmission network.
     National Grid combines all offers from generators to sell
electricity and picks the lowest-priced offers until demand is
filled. The system is restricted to filling market imbalances
about three-and-a-half hours before they appear.
     ``The issue is the flexibility of plant,'' said Carolyn
McAdam, a spokesman for Scottish and Southern. ``Our dual-turbine
gas plants are designed to be easy to switch on and off.''
     British Energy Plc, the U.K.'s biggest generator, has been
looking to diversify its production away from a reliance on
nuclear energy. In March last year, it bought Eggborough coal-
fired power-station for 615 million pounds.

                    Pork Bellies

     The agreements will allow electricity to be traded in much
the same way as pork bellies, gas or any other commodity, industry
officials said.
     Innogy, the U.K. generator spun off from National Power Plc
last year, employs 70 people on its trading floor in Swindon,
England. TXU Europe also hopes to make money trading electricity
contracts, as does Enron Corp., the world's largest energy trader.
     ``We'll be trading across the board under NETA,'' said TXU
Europe spokesman Chris Judge.
     Powergen spent 25 million pounds over two years to prepare
for NETA, Chief Executive Nick Baldwin said in an RNS statement.
The company's systems are ``interfacing well with the central
system and that of the National Grid Company'' today, he said.
     Designed and to address concerns the price of electricity was
being manipulated under the ``pool'' system, smaller producers say
the new arrangements are biased towards bigger companies.
     ``The NETA program has always said it will create a level
playing field but that's a load of hot air,'' said Steve Garrett,
commercial manager of Slough Heat and Power Ltd. ``From a small
generators point of view, (today) is the not `go live' date but
the `go dead' date.''

                    Wind Power

      Martin Edwards, owner of a Wind Electric Ltd., a wind power
plant in Cornwall, England, which supplies enough energy each year
for 2,700 households, says the new system will reduce the price
that he charges for electricity by as much as 50 percent.
     ``Wind farms will just about be able to cover their costs
under NETA,'' and nothing further, he said.
    To be sure, Ofgem said last week it will investigate the
effect of NETA on small generators, and the government has said
10 percent of all electricity consumed by 2010 will come from
renewable generation sources.

                    Market Conditions

     With its abundant generation, some companies argue that NETA
isn't necessary because the market situation it was created to
address no longer exists.
     The electricity market, once dominated by National Power
and Powergen, has become more competitive, with foreign rivals
taking a bigger slice of the market and driving prices down.
     National Power and Powergen have seen their market share
shrink over the past 10 years. Companies such as ScottishPower
Plc, which last year bought a natural gas-fired power station from
Powergen for 220 million pounds, have also increased rivalry.
     And there's no reason to fear California-style shortages
resulting from NETA, said Ofgem. There haven't been blackouts in
Britain that weren't weather related in almost 30 years.
     ``In terms of the average price achieved, the advent of NETA
will probably not make much difference,'' said Williams de Broe's
Anastasiou. ``We will get more price volatility, but it remains to
be seen what NETA's real impact will be.''

--Nick Nabarro and Mathieu Robbins in the London newsroom
(44) 20 7673 2392 or nnabarro@bloomberg.net /cor


Enron CEO Sees 2001 Revenue at $160 Billion to $170 Billion
2001-03-27 14:55 (New York)

Enron CEO Sees 2001 Revenue at $160 Billion to $170 Billion

     Dallas, March 27 (Bloomberg) -- Enron Corp. Chief Executive
Jeffrey Skilling said revenue at the world's biggest energy trader
will rise to $160 billion to $170 billion this year from $100.8
billion last year.
     Skilling spoke in Dallas at Southern Methodist University's
lecture series. Enron is based in Houston.

--Margot Habiby in Dallas, (214) 740-0873, or
mhabiby@bloomberg.net, through the Princeton newsroom,
(609) 279-4000/pjm


U.S. Companies Push for Private Lenders to Finance Exports
2001-03-27 18:32 (New York)

U.S. Companies Push for Private Lenders to Finance Exports

     Washington, March 27 (Bloomberg) -- Enron Corp., Lucent
Technologies Inc. and other U.S. companies are pressing the Export-
Import Bank to let private lenders offer export financing, a
system that could provide billions of dollars in additional
funding for U.S. sales overseas.
     The Ex-Im bank should counter the ``market window'' financing
used by Canada and other U.S. trading partners that enables banks
to offer export loans at the lower costs government agencies
offer, the companies told an Ex-Im Bank advisory panel.
     The bank, an independent federal agency, hasn't taken a
position on the practice, which would require congressional
approval.
     ``Ex-Im is behind the curve,'' said Rebecca McDonald,
chairman and chief executive of Enron Global Assets, a division of
Enron Corp. that develops power projects in Latin America and
Asia. ``There needs to be a fundamental change in Ex-Im's
philosophy and business practices.''
     Businesses are seeking the change, at the same time they are
fighting a 25 percent cut in the Ex-Im Bank budget proposed by
President George W. Bush. Bush wants to reduce funding for the
bank, which lends to foreign buyers of U.S. goods, to $699 million
from $927 million.

                        Growing Concern

     Concern about the budget ``only magnifies the other concerns
that exporters have with respect to ensuring that the agency is
competitive,'' said Mary Irace, vice president at National Foreign
Trade Council. ``Without money, who can be competitive?''
     The trade council represents 500 companies, including
engineering company Bechtel Group Inc. and Enron, the world's
largest energy trader, and U.S. units of foreign companies such as
Asea Brown Boveri AG, the world's biggest electrical-engineering
company.
     If Ex-Im used market-window financing as much as Canada and
Germany, which use the practice most, the agency could increase
the scale of its operations by more than 50 percent to about $20
billion, said Gary Hufbauer, a senior fellow at the Institute for
International Economics, a Washington research group.
     Market window financing wouldn't cost the U.S. government
more money, yet current law would require additional funding in
case some of the loans need to be written off, Hufbauer said.
     The Ex-Im Bank supported foreign transactions worth $12.6
billion with loans, guarantees and export-credit insurance in
2000.
     Bush's plan to cut funding faces opposition from Republicans,
the majority party in Congress. House Speaker Dennis Hastert, an
Illinois Republican, said lawmakers will probably restore the
funding, and 30 Republican senators have asked Bush to change
course.
     The agency's top official said he expects an increased focus
on market-window financing, which Peter Derrick, Lucent's
assistant treasurer said has grown during the past decade in other
countries.
     ``Market windows will get a lot of attention in the months
ahead,'' said James Harmon, Ex-Im's chairman and president.
``Everybody will focus on it.''

--Emily Schwartz in Washington (202) 624-1927 or