Los Angeles Power Firm Chief Lists Solutions for Crisis
Los Angeles Times, 05/27/01

Cutting Kilowatt Hours / Californians see rewards in conservation
The San Francisco Chronicle, 05/27/01

W and the Coast: California dreaming
Houston Chronicle, 05/27/01

Houston's top execs in energy / Oil and gas claims 8 of 10 highest- paid
Houston Chronicle, 05/27/01

Enron's Indian Unit Dabhol Rejects Payment From State in Quarrel Over Bills
Dow Jones Business News, 05/27/01

SAUDI ARABIA: UPDATE 3-Saudi seen revealing gas leaders before June signing.
Reuters English News Service, 05/27/01

Oil Cos Told To Accept Aramco As Gas JV Partner -Report
Dow Jones Energy Service, 05/27/01

India: Indian lenders of DPC to participate in Singapore meet
Business Line (The Hindu), 05/27/01

Senator Calls for Hearings Into Energy Regulators' Moves
The New York Times, 05/26/01

Enron's secret bid to save deregulation / PRIVATE MEETING: Chairman pitches 
his plan to prominent Californians
The San Francisco Chronicle, 05/26/01

USA: Beverly Hills crowd unmoved by Enron pitch - paper.
Reuters English News Service, 05/26/01

Enron courts prominent Californians at secret meeting
Associated Press Newswires, 05/26/01

Enron's Dispute With Utility In India Grows More Tangled
The New York Times, 05/26/01

India: MSEB requests MERC to rescind Dabhol PPA
Business Line (The Hindu), 05/26/01

DPC refuses to take MSEB's bill for April
The Economic Times, 05/26/01

Ganske Has Own War Chest To Take On Harkin for Senate
Omaha World-Herald, 05/26/01

Senate confirms Texan to energy commission
Houston Chronicle, 05/26/01

DUMB TALK / California AG's remarks crude and deceptive
Houston Chronicle, 05/26/01

Enron sends staff on deputation
Business Standard, 05/26/01

Power firm vetted Bush energy regulators
The Guardian, 05/26/01

Changes in Senate could offer state relief
The San Diego Union-Tribune, 05/26/01



California; Metro Desk
Los Angeles Power Firm Chief Lists Solutions for Crisis
KURT STREETER
TIMES STAFF WRITER

05/27/2001
Los Angeles Times
Home Edition
B-3
Copyright 2001 / The Times Mirror Company

A Texas business executive whose company has profited enormously from 
California's energy crisis says California needs more deregulation, not less. 
Kenneth Lay, the head of Houston-based Enron Corp., handed out a four-page 
plan detailing his solution to California's energy crisis at a meeting with 
Los Angeles Mayor Richard Riordan and other state business and political 
leaders at a Beverly Hills hotel May 17.
The report details several ways to solve California's energy crisis. 
"Get deregulation right in California," it reads. "California never 
deregulated. . . . There is more regulation than ever." 
Among the document's other points are calls for consumers to pay the billions 
of dollars in debt the state's public utilities have incurred, and an 
assertion that federal investigations into price gouging by private firms 
such as Enron are contributing to the problems. 
Lay also suggests increasing conservation efforts, partly through pricing 
that would cost consumers more for using electricity during peak times. 
Reached for comment, Steve Maviglio, a spokesman for Gov. Gray Davis, called 
the paper a "generator's wish list," saying it goes against the governor's 
policy on the energy crisis. 
"The governor is not calling off the dogs," Maviglio said Saturday. "To 
suggest that ratepayers should shoulder the entire burden of deregulation is 
totally the opposite of what the governor is calling for." 
Lay, one of President Bush's biggest campaign contributors and a key advisor 
on the Bush energy plan, has built a powerful energy company by buying 
electricity from generators and then selling it. Enron reported first-quarter 
revenue of $50.1 billion, nearly a 281% increase over the same quarter last 
year. 
Lay met with Riordan and luminaries including actor Arnold Schwarzenegger and 
financier Michael Milken--plus about a dozen others--at the Peninsula Hotel. 
Enron spokesman Mark Palmer said: "Our position is simple." California needs 
to "increase the supply of energy and decrease the demand." 
* 
Associated Press contributed to this story.

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

NEWS
Cutting Kilowatt Hours / Californians see rewards in conservation
Joe Garofoli
Chronicle Staff Writer

05/27/2001
The San Francisco Chronicle
FINAL
A.21
(Copyright 2001)

For months, Californians have been engaging in acts so egregious that Beltway 
types fear they threaten "the American way" of life. 
Like conserving energy. In huge numbers.
The Bush administration has been fretting about how to protect our way of 
life in the face of energy shortages, but many Californians will tell you 
they haven't sacrificed much of anything while knocking 20 percent or more 
off their power bill. Not unless you count having two refrigerators to be a 
constitutionally protected right. 
"People who complain about the cost of energy just aren't thinking hard 
enough for ways to save," said Jerri Linn Phillips. She cut 30 percent from 
her power bill by unplugging unused appliances in her one-bedroom apartment 
in San Francisco's Japantown. 
To the amazement of the rest of the energy-guzzling country, all this 
personal sacrifice hasn't curled the stereotypically soft Californians into 
fetal positions. In fact, with electricity costs about to go up, many are 
ready to evangelize about their relatively pain-free conservation. 
"The real hardship has been the fear of the unknown," said P.J. Astrup, an 
Alameda resident whose most recent cross to bear was finding a gallon of 
curdled milk in his second refrigerator. 
"Sure, the lights going out for a couple of hours may have perturbed a few 
people (in California), but it hasn't been that bad yet." 
That doesn't mean conserving has been easy. It's been a hassle to change 
bulbs and air-dry clothes and nag the kids: "Turn off those lights. Don't you 
know there's an energy crisis?" 
Still, a Field Poll this month found that 63 percent of Californians surveyed 
have cut at least 10 percent of their energy usage since the start of the 
crisis; nearly one in four has cut 20 percent or more. The poll was taken 
after a study found that Californians use less electricity than their 
counterparts in every state but one -- Rhode Island. 
Not every California conservationist is as rabid as John Muir. While the more 
ambitious bought meter readers to measure the output of every appliance in 
the house, the rest just unplugged their coffeemakers and let the laundry 
pile up an extra week until there was a full load. 
A few, like Rosie Sorenson, make a game of con 
serving. 
When the Richmond resident feels like rewarding herself for a conservation 
job well done, she'll say, "Tonight, I'll treat myself - - I'll read with 
real electricity," instead of using a battery- powered lamp. 
Or she'll plug in two, count 'em, two bulbs in the panel above the bathroom 
mirror in her 1,150-square-foot condominium. 
"We're very privileged as a country," said the self-described "recovering 
psychotherapist" and budding novelist. "We have so much. But if we rally 
together, we should be able to get through this." 
Flipping circuit breakers, air-drying clothes and performing a dozen other 
conservation tasks has helped Sorenson drop her electricity usage 41 percent 
from January to March. Next up: She's going to ask the head of her condo 
complex to turn down the heat in one of its three pools and -- horrors! -- 
hot tubs. "We don't need all that," Sorenson said. 
Conservation chutzpah like that could be construed as compromising the 
American way of living in another part of the country. Middle America hears 
"conservation" and thinks, "Put some canned peaches in the root cellar. We 
got another Depression coming." 
A better term would be "energy efficient," said Richard Perez, editor of the 
14-year-old magazine Home Power, a bible for folks living off the power grid. 
While "conservation" connotes "doing without" to the unconverted, everybody 
feels good about making their lives more "efficient." 
"I come from a no-sacrifice kind of place," said Perez, who hasn't turned off 
his microwave, VCR or any other appliance, even though his Ashland, Ore., 
home is powered exclusively by renewable energy sources. "And we haven't met 
a California home yet where we can't cut the utility costs 20 percent." 
Conservation is a fun game the whole family can play. Jeff Goodrich deputized 
his three children as "energy monitors" at the beginning of the energy 
crisis. Their reward for closing doors and turning off the TV surge 
protector: Every month, they get to keep whatever the family saved over last 
year's energy bill. Last month, each kid got $22. 
"I'd rather give the money to them than Enron or some Texas company," said 
Goodrich, who lives in Greenbrae. 
"I'm always amazed by the response people have to Californians," he said. "It 
seems like they're always ready to jump on us for being nuts. But 
conservation is about preserving our standard of living, not doing without."


PHOTO; Caption: Leigh, 8, (left) Grace, 6, and Michael, 10, showed off their 
reward for being household energy monitors for their parents, Mary and Jeff 
Goodrich (background). / John O'Hara/The Chronicle 

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







OUTLOOK
Opinion
W and the Coast: California dreaming
CRAGG HINES
Staff

05/27/2001
Houston Chronicle
2 STAR
2
(Copyright 2001)

LOS ANGELES - Welcome to California, Mr. President. You're a brave man. 
They've been saying terrible things about you out here. Some of them are even 
true. 
When you arrive Monday for your first visit to the Golden State since the 
election, try to blend in. Take it from me, you'd look fabulous in 
Birkenstocks. Don't call it "La-La-Land." But do say, "dude," a lot. (See 
below.)
Remember these people didn't like you that much before the lights began to 
flicker. Key figures: Gore 54, Bush 41. And after all that work and money and 
those nasty, hot visits last year to the raisin sheds in Fresno. So, don't 
take the smiles of the official welcoming party too seriously. They wouldn't 
make a very good focus group. 
When I told John Burton, Democratic leader of the state Senate, you were 
finally coming to California he said: "It'll be like Stevenson going to 
Dallas." Not exactly, but you get the idea. 
You can do self-deprecation, and it would not be amiss. Self- deprecation, 
hell. What about self-mortification? You might even want to borrow Jerry 
Brown's little flagellation thingy from his seminary days. 
Did you bring a flashlight? 
It would help if you can tone down the West Texas twang. Intimate that you're 
an orphan, and certainly don't admit that your parents live in Houston or 
that you've ever been to such a wantonly rapacious place. Why, 
"unconscionable price-gouging" occurs there, according to Gov. Gray Davis. 
Talk about your brother in Florida and how, just like Californians, he 
doesn't want any more drilling off his coastline. (You can skip the part 
about how you don't exactly agree - with him or them.) 
Talk about your sister in the Washington, D.C.-area. Remind them that her 
husband worked for such California Democrats as Tony Coelho (do not recall 
that Coelho got out of Congress just ahead of the ethics committee) and that 
your brother-in-law is a lobbyist for the California wine industry. Good 
names to drop: Ernest and Julio. 
You might try telling folks you're from Connecticut. You were born there, and 
you went back to Yale as commencement speaker just last Monday. 
And for heaven's sake don't tell them you know Enron Chairman Ken Lay or that 
he and corporate colleagues are among the biggest Republican bankrollers. A 
few days ago, state Attorney General Bill Lockyer said he'd like to find a 
way to lodge criminal charges against some Big Energy boys. 
"I would love to personally escort Lay to an 8 x 10 cell that he could share 
with a tattooed dude who says, `Hi, my name is Spike, honey,' " Lockyer told 
one crowd, according to an aide. Just for emphasis, the attorney general 
repeated it for the Wall Street Journal. I guess Lockyer just forgot to 
mention that as a state senator in 1996 he voted for the electricity 
deregulation bill at the heart of the problem. 
See, I told you how useful "dude" could be. And, as Lockyer also proves, 
cheap political theatrics are pretty hot too. 
Before you meet with Gov. Davis, make sure to read the latest statewide poll 
from the Public Policy Institute of California. Maybe have it lying around 
the room when Davis walks in. He's familiar with the numbers and will catch 
your drift. 
Fewer than half of Californians now approve of the way he's handling his job 
- a big drop from January. Sixty percent disapprove of the way he's handling 
the electricity crisis. 
The best news is that the public doesn't really blame either of you - yet - 
for the crisis. A third of folks in the poll blame the energy companies. 
Almost as many blame former Republican Gov. Pete Wilson who pushed the 
deregulation measure and the Democratic- dominated Legislature that enacted 
it. 
Only 10 percent blame Davis and the current Legislature and only 8 percent 
blame you and the federal government - the same number, by the way, who blame 
California consumers. But that doesn't mean you're off the hook. Fifty-six 
percent of the folks don't like the way you're responding to the crisis. If 
you don't have an order for capping electricity prices in your briefcase, you 
might consider having Air Force One fly on to Hawaii. 
Like folks across the country, Californians give you decent marks overall, 
with 57 percent in the PPIC poll approving of your job performance and 36 
percent disapproving. Seven percent must have been at the beach. 
Two other things: Get out of here before the air-conditioning season really 
cranks up, and, remember, they call it "sushi," not "bait."

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



BUSINESS
Houston's top execs in energy / Oil and gas claims 8 of 10 highest- paid
L.M. SIXEL
Staff

05/27/2001
Houston Chronicle
2 STAR
1
(Copyright 2001)

Want to know just how well the energy business is doing? 
Consider this: Eight out of the 10 highest-paid executives in Houston are in 
the oil and gas business.
The annual list, compiled by Resource Connection for the Houston Chronicle, 
is dominated by executives from Enron Corp., Anadarko Petroleum Corp. and 
Nabors Industries. The executives were handsomely rewarded in stock options 
and awards of stock at a time when their company stock prices are riding 
high. 
The top earner was the chairman and CEO of Nabors Industries, Eugene M. 
Isenberg. He earned $63.9 million last year, largely because the company 
doubled the number of options it awarded him the previous year, said Tammy 
Hemphill, director of human capital consulting for Resource Connection. 
When times are good, companies typically give away more options. It's a way 
to attract and retain senior management. 
Isenberg's compensation comes strictly through the performance of the 
company, said Denny Smith, director of corporate development for Nabors 
Industries. The only way Isenberg can make money is if the value of the 
company's stock grows through his efforts. 
And he's made a lot for Nabors Industries. When Isenberg took over the 
company in 1986, its net worth was a negative $35 million and it was emerging 
from bankruptcy. Under Isenberg's leadership, the company's net worth is now 
$2 billion, said Smith. And Nabors' stock price doubled during 2000. 
Isenberg earned 42 percent more than the highest-paid executive of the year 
before. Robert Devlin, American General's chairman and chief executive 
officer, earned $45 million in 1999. 
Devlin fell to the 10th place on the recent list (he earned $27,272,697 in 
2000). But according to a source familiar with American General's 
compensation packages, Devlin will receive about $200 million in stock 
options and other incentives in 2001 as a result of American International 
Group's purchase of American General. 
Four of the six highest-paid executives in Houston are from Enron. But the 
highest-paid Enron executive is not Chairman Ken Lay. 
In fact, Lay made less money than three of his lieutenants because he 
received far fewer stock options. 
For example, Kenneth Rice, chairman and chief executive officer of Enron 
Broadband Services, one of Enron's business units, received more than twice 
as many options as Lay and Jeff Skilling, Enron's chief executive officer and 
president. 
Consequently, Rice was the second-highest-paid executive in Houston, taking 
home $47,375,588 in 2000. Lay, who was the sixth- highest-paid executive, 
earned $35,665,037. 
Max Watson, the former chairman and chief executive officer of BMC Software, 
was conspicuously absent from the list this year. 
He didn't get any stock options or restricted stock awards in 2000, so his 
compensation was just salary and bonus of $1.2 million, Hemphill said. But 
that wasn't enough to put him on the list, which required a package worth at 
least $2 million. 
John Cox, acting chief financial officer of BMC Software, said the company 
awards options only once every three years. It's a good- sized grant that's 
supposed to last three years. 
The options take four years to vest so they always have options "on the 
table" - options that haven't vested yet but have a high value that makes it 
difficult for an executive to leave the company. 
Of the 17 highest-paid executives in Houston, five are from Anadarko. 
"They're very good at what they do," said Teresa Wong, manager of public 
affairs and corporate communications for Anadarko. 
The company went from a $4 billion company in January 2000 to a $16 billion 
company by the end of the year, she said. It catapulted into the top in terms 
of production, employees and reserves, she said. 
The executives are being rewarded for that increased risk and responsibility, 
she said. And it didn't hurt that the stock price more than doubled during 
the year. 
Dynegy's executives also benefited from the company's rapid growth. Two of 
the merchant energy company executives were among the 14 highest-paid 
executives in Houston. 
"We had an incredible year last year," said Jennifer Rosser, director of 
strategic business communications. The stock price increased 231 percent, the 
number of employees more than doubled, and the company had a 210 percent 
increase in net income. 
Chuck Watson, chairman and CEO, and Steve Bergstrom, the company's president, 
are among the founders of the company, she said. 
Incentive plans based on options and awards of stock work well when the stock 
market is riding high. They aren't as effective when the stock prices are 
"underwater" - Wall Street lingo for worthless. 
So, to re-motivate executives in a depressed stock market, nonenergy 
companies have been focusing on short-term incentives such as cash bonuses, 
said Wes Hart, an executive compensation consultant who designs executive 
incentive plans for Buck Consultants. 
Companies hope the cash incentives will boost their numbers - earnings per 
share and cash flow - and hopefully the stock price will follow, Hart said. 
That new focus on short-term thinking doesn't mean companies stopped 
pondering longer-term goals. But some are adding more "teeth" to their 
long-term performance goals to get away from the idea that options are a 
"gimme" or given based on seniority. 
And to keep the long-term goals from becoming worthless when the stock price 
falls, companies are using goals that aren't as directly tied to the stock 
price. 
Sometimes executives must meet a profit hurdle. Others must outperform a 
designated peer group on several key performance categories, Hart said. 
Other times, executives are required to meet an imposed stock market hurdle; 
for example, the stock has to reach $50 and stay there for 10 days. And some 
companies are giving executives a reward if the company's stock price drops 
less than its competitors, Hart said.


Photos: 1. Because of differences in stock option packages, Enron Corp. 
President and Chief Executive Officer Jeffrey Skilling made less than Kenneth 
Rice, chairman and chief executive officer of Enron Broadband Services, one 
of Enron's business units (p. 2); 2. Because of differences in stock option 
packages, Enron Corp. President and Chief Executive Officer Jeffrey Skilling 
made less than Kenneth Rice, chairman and chief executive officer of Enron 
Broadband Services, one of Enron's business units (p. 2); Mug: 3. Eugene M. 
Isenberg (p. 2); Graph: 4. Company financials (p. 2) 

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



Enron's Indian Unit Dabhol Rejects Payment From State in Quarrel Over Bills
By Jesse Pesta

05/27/2001
Dow Jones Business News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Staff Reporter at The Asian Wall Street Journal 
NEW DELHI -- In an unusual twist in a quarrel over unpaid bills, Enron 
Corp.'s Indian power project, Dabhol Power Corp., has rejected a check valued 
at $39 million from its only customer, the Maharashtra State Electricity 
Board.
Dabhol also delivered a sharply worded four-page letter responding to the 
electricity board's decision last week to rescind its contract based on a 
claim that Dabhol misrepresented its "ramp-up rate" - the time it takes to go 
from launch to full power. "We deny that DPC have practiced any 
misrepresentation," the letter says. "Furthermore, we do not think that the 
MSEB entertains any honest belief" in its own allegation, the letter says. 
It is the latest in a series of counterpunches as both sides try to gain the 
edge in a fight over the rates Dabhol charges for electricity. The $3 billion 
power plant is the largest foreign investment in India, and the dispute is 
being closely watched as an indicator of India's hospitality toward investors 
from abroad. 
India is in dire need of electricity: New Delhi endures hours-long blackouts 
every day. However, many of India's state electricity boards have little cash 
because of widespread electricity theft and lax customer metering. The Dabhol 
dispute broke late last year, when the Maharashtra board defaulted on bills 
totaling $48 million. 
Dabhol's critics claim the rates it charges are unreasonably high. Dabhol 
rejects that argument. Among other things, Dabhol has pointed out that the 
Maharashtra board draws only about 15% of the plant's capacity, down from an 
average of 60% or so before the dispute. Reduced use pushes up the per-unit 
cost because the pricing formula includes some capital costs. A 90% 
utilization rate would result in a tariff of 4.5 to five rupees (nine cents 
to 11 cents) per kilowatt-hour, one official estimated. In contrast, the 
chairman of the Maharashtra electricity board, Vinay Bansal, said on Sunday 
that current tariffs may be in the range of seven to 10 rupees, which he 
acknowledged is partly due to reduced utilization of capacity. 
Mr. Bansal said he hadn't seen the Dabhol letter and couldn't comment on it 
specifically. 
He also said that after Dabhol rejected the April payment, the Maharashtra 
board deposited the payment to a Dabhol account. But, he added, "If they want 
to return it, they can still return it." 
In the letter, Dabhol says it rejected the check for 1.37 billion rupees 
because it was accompanied by a note saying the payment was made under 
protest, a reference to the Maharashtra board's decision last week to rescind 
its electricity contract with Dabhol. 
"The MSEB cannot have it both ways," says the letter, signed by Enron 
executive K. Wade Cline. Either the board is rescinding the contract, or it 
is affirming the validity of the contract by making payments. 
Regarding the Maharashtra board's claim that Dabhol misrepresented the 
plant's ramp-up rate, the letter says the contract permits "unilateral 
amendment" of the production schedule based on actual plant performance. Mr. 
Bansal said the board disagrees with Dabhol's interpretation of the contract. 
This isn't the first time Dabhol has come under fire. In Maharashtra state 
elections in 1995, a coalition government came to power partly on the 
strength of a campaign against the plant. Political leaders said the plan was 
too costly and too dependent on foreign fuel. The newly elected state 
government canceled the project, although the contract was later renegotiated 
and construction was finished in May 1999. 
With the payment defaults, trouble had returned. In recent months, Dabhol has 
invoked political force majeure - a move typically used to dissolve a 
contract because of war or natural disaster - saying recent government 
actions could harm the company's ability to meet its obligations. It also has 
called on existing federal-government guarantees to cover the overdue bills. 
Meanwhile, the Maharashtra electricity board has slapped fines totaling four 
billion rupees ($85 million) on Dabhol for amending the start-up schedule, 
and a state panel has recommended sweeping changes in the contract. 
But the past week or so has been particularly stormy and Dabhol itself 
indicated a willingness to scrap the contract. A week ago, Dabhol issued a 
preliminary termination notice, a formal step that would allow it to cancel 
the contract six months from now if the disputes aren't resolved. And on 
Wednesday, the Maharashtra board said it was rescinding the contract. 
Copyright (c) 2001 Dow Jones & Company, Inc. 
All Rights Reserved.

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


SAUDI ARABIA: UPDATE 3-Saudi seen revealing gas leaders before June signing.
By Peg Mackey

05/27/2001
Reuters English News Service
(C) Reuters Limited 2001.

DUBAI, May 27 (Reuters) - Saudi Arabia is expected to reveal the leaders of 
two coveted gas projects before putting pen to paper on multi-billion dollar 
agreements with leading foreign oil companies on June 3, industry sources 
said on Sunday. 
On May 18 the kingdom awarded eight major oil companies stakes in a gas 
development initiative, its biggest opening to foreign investors in a quarter 
of a century.
ExxonMobil and Royal Dutch/Shell have won starring roles in the so-called 
"core venture" projects, estimated to require combined total investments of 
$25 billion. 
And industry sources have suggested that Exxon is in pole position to lead 
the $15 billion South Ghawar development, known as core venture 1, with Shell 
a strong contender to lead core venture three - development of gas at Shaybah 
in the empty quarter of southeast Saudi Arabia. 
Both supermajors already have considerable investment in the kingdom's 
refining and petrochemical sectors and feature as top customers of Saudi oil. 
BP is also competing for the top slot in South Ghawar, sources said. 
Exxon, Shell, BP and Phillips have all been granted stakes in South Ghawar, 
viewed by many as the prize gem of the gas initiative - unveiled more than 
two years ago. 
The leader of core venture 1 is due to get a 35 percent stake, two companies 
are to get 25 percent each and one firm 15 percent, sources in the region 
said. 
Shell, TotalFinaElf and Conoco have all been awarded stakes in the Shaybah 
venture, where the leading company is due to receive a 40 percent stake, with 
the remaining firms getting 30 percent each, according to industry sources. 
Exxon already has secured the leading role with 70 percent in core venture 
two on the Red Sea coast while Occidental and Enron between them hold 30 
percent. 
READING THE FINE PRINT 
By the signing ceremony in Jeddah, the oil companies will have had more than 
two weeks to pore over "preparatory agreements" which detail some guidelines 
for the three core ventures and outline the percentage stakes of each 
consortium, industry sources said. 
Fiscal and regulatory frameworks are to be worked out during the second half 
of the year, they added. 
Companies are expecting tough negotiations in order to finalise contracts by 
a year-end target. "This is just the start of things," an industry executive 
said. "There are going to be about five months of intense talks." 
Top oil firms insist there are profits to be made in the kingdom, holder of 
the world's fourth-biggest gas reserves. 
"The Saudis have been saying all along that these are world-class projects 
with world-class returns," an analyst said. "The oil majors are not doubting 
that." 
And they have wound up with bigger exploration blocks than they first 
envisaged. "They all asked for more exploration and they got it," an industry 
executive said. 
The scope of South Ghawar core venture 1 includes gas exploration in the 
North Rub al Khali, a natural gas liquids (NGL) recovery plant, gas 
processing, participation in expansion of the gas pipeline network, 
construction of two power and water desalination plants and two petrochemical 
plants. 
Investment of up to $5 billion in the Red Sea core venture 2 includes an 
exploration area in the northern Red Sea, development of the existing Midyan 
and Barqan gas fields and requirements for power, desalination and 
petrochemical plants. 
Investment of some $5 billion in the Shaybah core venture 3, Shaybah includes 
gas exploration in South Rub al Khali, development of the Kidan gas field and 
power, desalination and petrochemical plants. 
Analysts expect state oil company Saudi Aramco to participate in the gas 
initiative. "It is unwise to think that Saudi Aramco will not be involved," a 
regional analyst said.

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


Oil Cos Told To Accept Aramco As Gas JV Partner -Report

05/27/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

MANAMA, Bahrain -(Dow Jones)- The Saudi government has told international oil 
companies they must accept the state-owned Saudi Arabian Oil Co. (C.SOI), or 
Aramco, as a partner in any core gas project it offers them if Aramco wants 
the partnership, the Saudi business daily al-Eqtisadiah reported Sunday. 
It quoted sources as saying that Aramco will also have a majority voting 
rights on key issues regardless of its equity size in the projects. The 
newspaper didn't elaborate on whether this kind of arrangement would be 
accepted by the foreign companies.
Aramco would also receive compensation for any existing assets, property or 
infrastructure used by the planned joint ventures, which shouldn't conflict 
with any of Aramco's current projects, the newspaper said. 
The Saudi government is expected to sign preliminary agreements for 
multibillion dollar natural gas development projects with prequalified oil 
companies June 3, a Saudi government source said Sunday. 
The government earlier this month selected a consortium comprising Exxon 
Mobil Corp. (XOM), Royal Dutch/Shell Group (RD), BP PLC (BP) and Phillips 
Petroleum Co. (P), for a project to develop the South Ghawar field, called 
Core Venture 1, with an estimated investment value of between $15 billion and 
$17 billion. 
Exxon Mobil was also appointed to lead Core Venture 2, or the Red Sea 
project, with Occidental Petroleum Corp. (OXY) and Enron Corp. (ENE), which 
bid jointly for the project, as partners. 
Core Venture 3, the Shaybah project, was awarded to a consortium of Shell, 
TotalFinaElf (TOT) and Conoco Inc. (COCA). Leaders for Core Ventures 1 and 3 
have yet to be confirmed. 
-By Abdulla Fardan, Dow Jones Newswires; (973) 530758; 
abdullah.fardan@dowjones.com

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


India: Indian lenders of DPC to participate in Singapore meet

05/27/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

MUMBAI, May 26. INDIAN lenders to Dabhol Power Company have decided to take 
part at the meeting in Singapore called by foreign financiers of the project. 
Institutional sources told Business Line that even though the exact agenda of 
the meeting has not been finalised as yet, domestic lenders would participate 
in the meeting to be held on June 5 and 6. They were earlier contemplating 
skipping the meeting as they thought it would serve no good because DPC had 
anyway begun termination proceedings.
Also, with chances of foreign lenders cashing the deferred payment guarantees 
increasing, Indian lenders are keen to find out what is on their minds. As of 
now, they have not received any indication from their counterparts abroad. 
The source said the meeting is expected to discuss whether they should 
continue disbursements to the project in spite of the company serving the 
preliminary termination notice and MSEB retaliating with a legal notice. The 
board yesterday approached the Electricity regulatory commission for 
resolving the dispute for which a hearing is scheduled on May 29. 
Indian financiers still favour continuing with the project as it is close to 
completion. 
Another issue likely to crop up is funding the cost overruns. The delays 
caused by various reasons has apparently resulted in cost overruns reportedly 
of about $400 million. The company has already brought in all the equity and 
now, if it has to continue with construction, it has to borrow more, which 
the lenders are not very keen on. 
Meanwhile, the sources said Enron is trying to work out ways of bringing down 
the tariff. They said Enron is likely to have another meeting with officials 
of Union Power and Finance Ministries. 
- Our Bureau

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


National Desk; Section A
Senator Calls for Hearings Into Energy Regulators' Moves
By CHRISTOPHER MARQUIS

05/26/2001
The New York Times
Page 11, Column 1
c. 2001 New York Times Company

WASHINGTON, May 25 -- Accusing federal regulators of not doing their job, 
Senator Dianne Feinstein called today for hearings into possible 
improprieties between members of the Federal Energy Regulatory Commission and 
private energy interests. 
Ms. Feinstein, a California Democrat, said the commission, which is 
responsible for regulating the energy industry and is known by the acronym 
FERC, had not acted to protect residents of her state from companies that 
were reaping undue profits through spiraling energy costs.
''Despite evidence of manipulation and price gouging in both the electricity 
and natural gas markets in California and the West, and a finding by FERC 
last November of 'unjust and unreasonable' rates,'' the senator said, ''the 
commission has failed to take the actions necessary to bring reliability and 
stability to the marketplace.'' 
Ms. Feinstein made the request in a letter to Senator Joseph I. Lieberman, 
who is poised to take over the Committee on Governmental Affairs once the 
Democrats regain control of the Senate. Mr. Lieberman, who has already asked 
the General Accounting Office to investigate price gouging, could not be 
reached for comment today. 
In her letter, Ms. Feinstein cited an article in The New York Times today 
reporting that Kenneth L. Lay, chairman of the Enron Corporation, had told 
the commission's chairman, Curtis Hebert Jr., that he would support his 
continuation in the job if the commissioner endorsed the company's views on 
energy deregulation. Enron is the nation's largest electricity trader. 
Mr. Hebert said he had rejected Mr. Lay's offer. Mr. Lay told The Times that 
it was Mr. Hebert who had asked him to intercede with White House officials. 
The president appoints members of the commission and names its chairman. 
''It would be unconscionable if any of the nation's electricity traders or 
generators were in a position to be able to determine who chairs or becomes a 
member of the commission,'' Ms. Feinstein said. 
Environmental groups and other critics say the Bush administration has 
granted unprecedented access to leaders of the energy industry. They note 
that both President Bush and Vice President Dick Cheney made their fortunes 
in oil and that the president's national energy strategy, unveiled last week, 
relied heavily on exploiting new resources rather than conservation or fuel 
efficiency. 
But in a recent interview, Mr. Cheney said the White House was motivated by 
''sound public policy'' and not what the energy companies sought. 
The Senate today confirmed Mr. Bush's nominees for two Republican vacancies 
on the five-member panel. They are Patrick Wood, a former head of the Texas 
Public Utilities Commission, which deregulated electricity in the president's 
home state, and Nora Brownwell, a Pennsylvania utility regulator. 
Mr. Cheney has indicated that Mr. Wood will take over as chairman.

Photo: Senator Dianne Feinstein (Associated Press) 

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


NEWS
Enron's secret bid to save deregulation / PRIVATE MEETING: Chairman pitches 
his plan to prominent Californians
Christian Berthelsen, Scott Winokur
Chronicle Staff Writers

05/26/2001
The San Francisco Chronicle
FINAL
A.1
(Copyright 2001)

Energy executive Kenneth Lay, head of powerful Enron Corp., quietly courted 
Arnold Schwarzenegger, Richard Riordan, Michael Milken and other luminaries 
this week in Beverly Hills to drum up support for his solution to 
California's energy crisis. 
His prescription called for more rate increases, an end to state and federal 
investigations and less rather than more regulation.
Lay, a close friend of President Bush and one of his largest campaign 
contributors, hosted a private 90-minute meeting in a conference room at the 
Peninsula Hotel in Beverly Hills on Thursday. 
Among the participants were Milken, the former head of the Drexel Burnham 
Lambert investment banking firm who pleaded guilty to fraud charges in 1990 
and who now runs a think tank based in Santa Monica; movie star 
Schwarzenegger; and Riordan, the mayor of Los Angeles. Schwarzenegger and 
Riordan have been courted recently as GOP gubernatorial candidates. 
One participant, who agreed to speak on the condition he not be identified, 
said the meeting appeared to be geared toward getting participants to support 
Lay's vision and then champion it to officials who are trying to solve the 
state's energy mess. 
PLAN TO RESCUE DEREGULATION 
The source said the timing and tone of the meeting suggested Lay is concerned 
that California will abandon its disastrous experiment with power markets by 
either re-regulating the system or creating a government authority to provide 
electricity. Gov. Gray Davis signed legislation last week to create and fund 
a state power authority that would build, buy and run power plants in 
California. 
"They're trying to rescue deregulation," the source said of Enron executives. 
"They think the whole state power authority is a bad idea." 
At the meeting, Enron representatives circulated a four-page position paper 
titled "Comprehensive Solution for California," which was obtained by The 
Chronicle. It said ratepayers should bear responsibility for the billions in 
debt incurred by the state's public utilities and that investigations of 
power price manipulation and political rhetoric are making matters worse. 
The paper made no mention of the possibility that much of the runaway 
electricity costs in California is due to market manipulation by power 
generators and traders -- a possibility given credibility in studies by 
regulators and economists. 
One of the talking points read: "Get deregulation right this time - - 
California needs a real electricity market, not government takeovers." 
Another point suggested giving consumers monetary rebates for conserving 
electricity. 
INVOLVED IN EARLY DAYS 
Lay has been an aggressive champion of deregulated electricity markets and 
was an early advocate in persuading California to begin its experiment with a 
competitive power market system. 
Lay has created a new kind of company in the process, one that essentially 
produces nothing but makes money as a middle-man, buying electricity from 
generators and selling it to consumers. During the first quarter of this 
year, Enron's revenues increased 281 percent to $50.1 billion. 
Asked about the purpose of the meeting, Karen Denne, a spokeswoman for Enron, 
said she would "look into that" and then did not return repeated telephone 
calls seeking comment. One participant said Denne was present at the meeting. 
D.C. CONNECTIONS 
Meanwhile, Lay's power in Washington is reported to have reached 
unprecedented heights. According to a story in yesterday's New York Times, 
Lay supplied the Bush administration with a list of candidates for jobs 
regulating the power industry and even interviewed one of them. The story 
also said Lay essentially threatened to seek the removal of the chairman of 
the Federal Energy Regulatory Commission, Curt Hebert, if he does not support 
Lay's desire to further deregulate the nation's electricity system. Lay 
denied the allegation. 
Also in attendance at this week's meeting were Bruce Karatz, chief executive 
of home builder Kaufman & Broad; Ray Irani, chief executive of Occidental 
Petroleum; and Kevin Sharer, chief executive of biotech giant Amgen. Among 
those who were invited but did not attend were former Los Angeles Lakers star 
Earvin "Magic" Johnson; supermarket magnate and Bill Clinton supporter Ron 
Burkle; and Dennis Tito, recently returned from the world's first civilian 
space trip. 
Milken, through a spokesman, confirmed that he attended the meeting, but 
declined to be interviewed. Schwarzenegger could not be reached for comment 
through a publicist, and Sharer did not return a call yesterday afternoon. 
A spokesman for Riordan, Peter Hidalgo, said the Los Angeles mayor attended, 
but was "not intending to formulate any kind of policy position on this 
issue. His intent is to listen to all sides." 
Attached to the Enron handout was a two-page open letter, addressed to Davis 
and the state Legislature, apparently prepared for those who support Lay's 
position and would be willing to sign their names to it. The source who 
participated in the meeting said those assembled appeared noncommittal and 
asked a number of questions of Lay, but did not agree to champion his agenda.


PHOTO; Caption: Kenneth Lay 

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


USA: Beverly Hills crowd unmoved by Enron pitch - paper.

05/26/2001
Reuters English News Service
(C) Reuters Limited 2001.

SAN FRANCISCO, May 26 (Reuters) - Enron Corp. chairman Kenneth Lay sought the 
backing of prominent Californians for an energy deregulation plan this week 
but had little success, the San Francisco Chronicle reported on Saturday. 
The newspaper, citing an anonymous source present at the 90-minute meeting 
Thursday at the Peninsula Hotel in Beverly Hills, said that among those 
present were Los Angeles Mayor Richard Riordan, actor Arnold Schwarzenegger 
and former junk-bond kind Michael Milken.
The newspaper said Enron failed to obtain signatures from anyone at the 
meeting for an open letter to Gov. Gray Davis and the state legislature which 
was attached to a four-page position paper championing power market 
deregulation. 
The Chronicle quoted its source as saying Lay's guests were inquisitive but 
noncommittal.


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


Enron courts prominent Californians at secret meeting

05/26/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

SAN FRANCISCO (AP) - In a move to garner support from prominent California 
Republicans, a Texas energy executive held a secret meeting to push for the 
preservation of the state's deregulated power market, a newspaper reported 
Saturday. 
Houston-based Enron Corp. Chairman Kenneth Lay met with such names as movie 
star Arnold Schwarzenegger, Los Angeles Mayor Richard Riordan and Michael 
Milken, who pleaded guilty to fraud charges in 1990 as head of the Drexel 
Burnham Lambert investment banking firm, the San Francisco Chronicle 
reported. The 90-minute private meeting took place Thursday in a Beverly 
Hills hotel.
Schwarzenegger and Riordan have been courted as Republican candidates for 
governor. 
Enron distributed a four-page plan at the meeting calling for ratepayers to 
pay the billions in debt racked up by the state's public utilities and 
contending that state and federal investigations of price gouging are 
hindering the situation, the Chronicle reported after obtaining a copy of the 
paper. 
Others attending the meeting included chief executives Ray Irani of 
Occidental Petroleum, Kevin Sharer of biotech giant Amgen, and Bruce Karatz 
of home builder Kaufman & Broad, the Chronicle reported, citing unidentified 
sources. 
Lay, who is a friend and one of President Bush's largest campaign 
contributors, has built the world's largest energy trader by buying 
electricity from generators and selling it to consumers. During the first 
quarter of this year, Enron's revenues increased 281 percent to $50.1 
billion. 
Lay and Gov. Gray Davis have disagreed about how California's power crisis 
should be handled, and Lay says his company is being used as a scapegoat. 
Enron spokeswoman Karen Denne did not immediately return a call seeking 
comment Saturday. 
---- 
On the Net: 
http://www.enron.com/corp/

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



Business/Financial Desk; Section C
INTERNATIONAL BUSINESS
Enron's Dispute With Utility In India Grows More Tangled
By SARITHA RAI

05/26/2001
The New York Times
Page 2, Column 5
c. 2001 New York Times Company

BANGALORE, India, May 25 -- The dispute between the Enron Corporation and 
Indian federal and state government officials keeps getting messier. 
Talks meant to settle the dispute over months of unpaid power bills fell 
apart before they could begin on Wednesday, when the chief negotiator on the 
government side, Madhav Godbole, abruptly resigned after being criticized by 
a senior politician for going into the negotiations with a ''negative 
mind-set.'' Pressure from the chief minister of Maharashtra state persuaded 
him to retract the resignation later in the day.
Then, on Thursday, the state-run utility at the center of the dispute -- the 
sole customer for electricity generated by the Enron-controlled Dabhol Power 
Company -- served notice that it would challenge the validity of the contract 
between Dabhol and the utility and seek to have it canceled. 
The utility has long complained that Dabhol's rates are too high, and it has 
tried to assess penalties on Dabhol for failing to achieve promised levels of 
power capacity. 
Another government committee member, R. K. Pachauri, the director of an 
energy research institute, also resigned, and told reporters that the 
committee had been asked to rewrite the power supply contract, which it had 
no authority to do. 
The move by the utility came nearly a week after Dabhol escalated the dispute 
to a new level by serving its own termination notice on the utility for 
nonpayment. Under the contract's terms, Dabhol's notice set the clock ticking 
on a six-month cooling-off period in which the two sides might settle the 
dispute before the contract is ended. 
The Indian federal government, which is represented on the negotiating 
committee along with the utility and the state government, has been pressing 
for a quick resolution. ''The government is ready to consider any worthwhile 
idea emerging out of the renegotiating committee for the settlement of the 
dispute,'' the energy minister, Suresh Prabhu, said on Thursday. 
Where the talks are headed is hard to tell, but both sides have much to lose 
from an irreparable rupture. The success of the $2.9 billion Dabhol project, 
65 percent owned by Enron, is seen as crucial to the development of India's 
investment-starved power industry, and to India's hopes of attracting $10 
billion in foreign investment in the coming year. Both the federal and state 
governments have guaranteed the utility's payments of its bills, as well as 
some of the loans to build the project. 
For Enron's part, Dabhol has not brought in any revenue for months, and a 
drawn-out legal battle in the Indian courts could leave it unable to recover 
any of its losses if unsuccessful. 
Talks are now scheduled to begin Tuesday.


Photo: Part of a power plant that a subsidiary of the United States energy 
company Enron has been building in Dabhol, India. A dispute with Indian 
officials over unpaid bills has clouded the future of the plant. (Associated 
Press) 

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



India: MSEB requests MERC to rescind Dabhol PPA

05/26/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

MUMBAI, May 25. THE Maharashtra State Electricity Board filed a petition with 
the Maharashtra Electricity Regulatory Commission on Friday, asking it to 
rescind the power purchase agreement (PPA) with the Dabhol Power Company. 
The move is expected to shift arbitration proceedings between the two 
companies to an Indian forum. "MERC will now give us instructions whether 
parallel action should continue. We are praying to the commission that 
arbitration proceedings be discontinued," a senior MSEB official said.
"Although, the PPA was signed much before MERC's formation, the dispute arose 
only over the past few months. And as such, we are seeking a hearing on these 
disputes," the official said. The Advocate General of Maharashtra, Mr Goolam 
E. Vahanvati, is expected to represent MSEB at the commission hearing. 
On Thursday, MSEB had issued a legal notice to Enron, stating that it had 
been forced to rescind the PPA and was avoiding the contract as DPC had 
"misrepresented material facts" while drawing up the PPA and hence, the board 
was "no more bound by the contract". 
According to the official, the PPA provides for full capacity availability 
within three hours of "cold start", for which MSEB has to pay a penalty of Rs 
17 lakh. 
MSEB had alleged that DPC's machines take five hours to reach full capacity 
and had slapped a rebate of Rs 401 crore in January 2001. 
"Following this, DPC not only said the performance curves in the PPA be 
replaced but that the plant profile did not fit the PPA to begin with. Also, 
a series of notices - arbitration, escrow, political force majeure and 
finally the preliminary termination notice - were slapped on the board," the 
official said. 
The board has now asked MERC to look into all disputes between the two 
companies. 
If DPC does not attend the hearing, the commission can give an 'ex-parte 
hearing', according to legal sources. According to Section 52 of the ERC Act, 
provisions of this Act have an overriding effect on all other Acts. 
The board will also seek damages to the tune of about Rs 700 crore, which 
includes the January rebate of Rs 401 crore and the subsequent two rebates 
amounting to Rs 300 crore, the official said. 
Meanwhile, negotiations between the two parties are expected to continue. 
"The Godbole committee meeting is scheduled on May 29. We would like to reach 
an understanding with DPC," the official said. 
The board has offered to continue buying power from DPC in spite of the 
notice to avoid inconvenience to the power company. 
Bill not accepted: Meanwhile, DPC refused to accept Rs 139 crore toward its 
April power purchase bill paid by MSEB under protest on Friday. 
The DPC spokesperson refused to comment on the company's decision. 
"We had sent them the bill amount but they did not accept it," a senior MSEB 
official said. 
The board now plans to deposit the money in DPC's bank account and send a 
separate protest letter to the company, as per PPA provisions. 
- Our Bureau

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


DPC refuses to take MSEB's bill for April
Our Bureau

05/26/2001
The Economic Times
Copyright (C) 2001 The Economic Times; Source: World Reporter (TM)

DABHOL Power Company on Friday refused to accept the Rs 136.87-crore April 
electricity bill payment from Maharashtra State Electricity Board. 
"We sent the cheque to DPC, but they refused to accept it. We are yet to get 
any reply from them," said N M Mishra, director (finance) of MSEB. He said 
the money was parked in a Canara Bank account.
According to a senior MSEB official, the DPC move is in response to MSEB's 
notice to rescind the power purchase agreement issued on Thursday. 
"It seems that since MSEB is paying the cheque under protest, DPC is now 
looking at various legal implications," he said. The DPC spokesperson was not 
available for comments. 
Meanwhile, DPC on Friday held discussions with the power ministry officials 
in New Delhi. Enron managing director K Wade Cline met power secretary A K 
Basu and discussed the situation arising out of DPC serving a preliminary 
termination notice because of an unresolved six-month dispute over bills owed 
by MSEB. 
Basu said, "The Centre will do whatever possible to resolve the DPC-MSEB 
dispute at the earliest." 
The ministry has advised DPC to appear before Maharashtra government's 
negotiating committee headed by Madhav Godbole to plead their case. 
According to Basu, the Centre has appointed former telecom secretary A V 
Gokak on the committee for an early solution. 
"Gokak has been fully briefed and he would try to bring both sides on a 
common ground. But both the parties have to come to an understanding between 
themselves," he added.

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


News
Ganske Has Own War Chest To Take On Harkin for Senate
MATT KELLEY
WORLD-HERALD BUREAU

05/26/2001
Omaha World-Herald
Sunrise
8
(Copyright 2001 Omaha World-Herald Company)

Should it come down to personal wealth, Rep. Greg Ganske will have an edge in 
a 2002 Iowa Senate race with Sen. Tom Harkin. 
Ganske, a Republican who plans to challenge Harkin, held assets worth between 
$2.48 million and $5.63 million at the end of 2000, according to financial 
disclosure statements. Harkin, a Democrat, reported wealth between $363,000 
and $1.43 million.
Those figures, however, may prove irrelevant as both candidates have proved 
their ability to finance expensive campaigns without dipping into their 
personal fortunes. Not since Ganske's first run for office, in 1994, has 
either man spent his own money to get elected. 
"We're both pretty good fund-raisers," Ganske said Wednesday. 
The financial figures are reported each year on disclosure statements filed 
by every member of Congress. 
For the lawmakers from western Iowa, the most recent disclosure reports 
showed relatively little change from 1999. 
The maximum value of Republican Sen. Charles Grassley's assets dwindled a 
bit, from $5 million in 1999 to just under $3.4 million last year. Grassley, 
who farms in Butler County, keeps virtually all of his wealth in farmland and 
mutual funds. 
While the maximum value of Grassley's assets dwindled, the minimum value rose 
from $1 million in 1999 to $1.13 million last year. 
Grassley also reported loans for his farmland of between $115,000 and 
$300,000. His farms brought in $81,700 in income 2000 with just over $60,000 
in expenses, according to the report. 
Republican Rep. Tom Latham, who is part owner of a family farm and seed 
company, reported assets of between $1.5 million and $3.23 million in 2000. 
That's up from 1999, when Latham reported assets between $1.1 million and 
$2.6 million. 
Latham's disclosure report also shows a significant jump in investment 
income, from between $108,400 to just over $1 million. In 1999, Latham 
reported income of between $60,000 to $145,000. 
Most of that increase is due to income from his share of the family seed 
company, which in 2000 crept into reporting bracket with a $1 million 
ceiling. Latham's income from the company, however, is likely much closer to 
bracket's lower threshold of $100,000 - a level he did not exceed in 1999. 
Latham also reported a salary from Latham Seed Co. of $6,000. He reported a 
loan in Grand Junction, Iowa, for $15,000 to $50,000. 
As in 1999, Rep. Leonard Boswell's main source of investment income came from 
the sale of between $15,000 and $50,000 in calves from his farm in Decatur 
County. 
The Democrat's total wealth in 2000 stood between $402,000 and $880,000 - all 
of it tied to his farmland. He reported between $30,000 and $100,000 in farm 
loans. 
Aside from his congressional salary, Boswell earned just over $8,000 in 
pension payments from his service in the Iowa Legislature. His wife, Dody, 
earned just under $7,000 from Lamoni Community Schools. 
Ganske also held about the same level of assets and income over 1999. He 
reported between $112,100 and $273,000 in income, most it from stock 
dividends, interest and capital gains. 
Ganske's wife, Corrine, also works as a physician. They reported no 
liabilities. 
The majority of Ganske's wealth was in mutual funds. 
Should Ganske win the GOP primary to face Harkin, the race is likely to 
become pivotal as both parties jockey for control of the Senate. Both 
candidates will draw significant donations from outside the state, perhaps 
from party coffers in Washington. 
Even so, personal wealth can provide a comforting cushion in close races. 
According to the Center for Responsive Politics, Ganske used $618,000 of his 
own money to help him defeat longtime Democratic incumbent Neal Smith in 
1994. 
Ganske will be mounting a similar challenge in 2002 against Harkin, a 
stalwart of Iowa's Democratic establishment. 
While smaller than Ganske's Harkin's portfolio contained a wide array of 
stock and bond holdings. In addition to various mutual funds, Harkin and his 
wife, Ruth, owned stock in Southwest Airlines, Lucent Technologies, Lehman 
Brothers and Kimberly Clark. 
And while he roundly criticizes the oil industry for reaping large profits, 
The Harkins own between $1,000 and $15,000 worth of common stock in Enron 
Corp., an energy company. Ruth Harkin owns between $25,000 and $100,000 in 
stock in Conoco Inc. and served on the oil company's board of directors. 
Her husband recently issued a statement that he has always been proud of his 
wife's career.

Mugs/5GanskeHarkinGrassleyLathamBoswell 

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


BUSINESS
Senate confirms Texan to energy commission
Houston Chronicle News Service

05/26/2001
Houston Chronicle
3 STAR
1
(Copyright 2001)

WASHINGTON - The Senate confirmed on Friday a Texas ally of President Bush 
and a Pennsylvania electricity regulator to become commissioners on the 
Federal Energy Regulatory Commission. 
The voice-vote confirmation filled two Republican vacancies on the 
increasingly visible five-member commission, which has come under intense 
scrutiny in recent months over its actions to correct the wholesale power 
market chaos in California.
Confirmed were Pat Wood III, head of the Texas Public Utility Commission, 
which is handling the deregulation of electricity in Texas, and Nora 
Brownell, a regulator in Pennsylvania, where deregulated power markets have 
been called a model. Wood's term runs through mid-2005; Brownell's will 
expire a year later. 
FERC Chairman Curtis Hebert, a Republican, will retain his post. The two 
Democrats on the commission, William Massey and Linda Breathitt, also remain 
on board. 
Also Friday, Sen. Dianne Feinstein, D-Calif., called for hearings into 
possible improprieties between FERC members and private energy interests. 
In her letter, Feinstein cited a report in the New York Times on Friday that 
Ken Lay, the chairman of the Enron Corp., had told Hebert that he would 
support his continuation in the job if the commissioner endorsed the 
company's views on energy deregulation. Houston-based Enron is the nation's 
largest electricity trader. 
Hebert said he rejected Lay's offer. Lay told the Times that it was Hebert 
who asked him to intercede with White House officials. The president appoints 
the commission and names its chairman.


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


A
Editorials
DUMB TALK / California AG's remarks crude and deceptive
Staff

05/26/2001
Houston Chronicle
3 STAR
42
(Copyright 2001)

By now many Houstonians are aware of the inappropriate and totally dumb 
remark California Attorney General Bill Lockyer made about Enron Corp. 
Chairman Kenneth Lay earlier this week. 
"I would love to personally escort Lay to an 8-by-10 cell that he could share 
with a tattooed dude who says, `Hi, my name is Spike, honey,' " Lockyer is 
reported to have said in a May 22 story in The Wall Street Journal.
Lockyer would like the world to blame Enron and other Texas-based energy 
companies for California's rolling blackouts. 
His crude remark is not only dumb, but also calculated to deceive, because he 
and other California legislators who approved the state's partial electricity 
deregulation (Lockyer was a member of the Legislature) can only blame 
themselves for California's shortages. 
Lockyer's personal attack on Lay was beneath anyone with even a modicum of 
civility. It was all the more appalling because such gutter talk by 
California's top law enforcement official is not helpful in resolving 
California's problems, particularly when Lockyer, as the Golden State's 
attorney general, is supposedly conducting a fair and impartial investigation 
into the crisis.

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


Enron sends staff on deputation
P Vaidyanathan Iyer NEW DELHI

05/26/2001
Business Standard
1
Copyright (c) Business Standard

Having appointed global management consultants Arthur Andersen to value its 
business worth in the country, Enron has now sent on deputation most of its 
100-odd employees to two of its subsidiaries, Dabhol Power Company and 
Broadband Solutions Pvt Ltd. 
According to sources, with Enron Corp deciding not to undertake any fresh 
investments in the country, the team at Enron India had to be deployed 
elsewhere in its existing lines of business, DPC and BSPL. While DPC is 
embroiled in a controversy, BSPL has made investments to the tune of $30 
million in setting up data centres in India.
Sources further said that Enron India, in effect, has been reduced to a shell 
company merely holding stakes in Dabhol and Broadband Solutions. They also 
said that several employees had put in their papers since they were no longer 
handling tasks for which they were originally hired. 
When contacted, a company spokesperson said, "Those on the MetGas and fibre 
optic projects have been reassigned." He however refused to comment on the 
total number of employees deputed elsewhere.

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


Power firm vetted Bush energy regulators
JULIAN BORGER IN WASHINGTON

05/26/2001
The Guardian
Copyright (C) 2001 The Guardian; Source: World Reporter (TM)

Julian Borger in Washington 
Applicants for jobs on the commission regulating the US energy market have 
been vetted by the Enron Corporation, the country's biggest electricity power 
company and a significant contributor to George Bush's election campaign, 
according to a report published yesterday.
Soon after being appointed chairman of the federal energy regulatory 
commission, Curtis Hebert told the New York Times, he received a telephone 
call from the Enron president, Kenneth Lay, offering the company's backing to 
help him keep his job if he adapted his views on deregulation. 
Mr Hebert said he was offended by the approach and turned down the offer. 
His appointment as chairman, which was provisional pending the nomination of 
other members of the commission, has since been called into question by 
Vice-President Dick Cheney. 
Mr Hebert's chief of staff, Walter Ferguson, confirmed the newspaper account 
yesterday. '[Mr Hebert] has always been forthright and he's been a 
straight-shooter with folks in the industry,' he said. 
Mr Lay, a close friend of the Bush family, confirmed that the telephone call 
took place, but said it was Mr Hebert who asked for Enron's backing to keep 
his job. 
Either way, environmentalists and other critics of President Bush argue, the 
fact that the conversation took place at all demonstrates the leading role 
corporations like Enron have in making energy policy in Washington under the 
new administration. 
According to a joint investigation by the New York Times and Public 
Broadcasting Service (PBS), Mr Lay and other Enron executives interviewed 
other candidate members of the regulatory commission and supplied the 
president's personnel adviser, Clay Johnson, with a list of the company's 
preferred candidates. 
The two commissioners Mr Bush chose to fill the vacant Republican seats both 
had the backing of Enron and other power companies. 
'It just confirms what we believed and what we've been saying, that the 
Bush-Cheney energy plan is written by corporations and it's in the interests 
of the corporations,' said Kevin Curtis, vice-president for government 
affairs of the National Environmental Trust, a Washington pressure group. 
Enron, a Dollars 100 billion behem oth in the energy trading market, was a 
significant backer of Mr Bush in last year's election. It contributed Dollars 
1.7m to Republican candidates, 72% of its total campaign spending. 
It is a strong supporter of deregulation in the electric power market, in 
particular the opening up of state markets to outside suppliers. 
At the time of the phone call from Mr Lay, Mr Hebert had launched an 
investigation of the pricing policies of big electricity traders, such as 
Enron. 
'One of our problems is that we do not have the expertise to truly unravel 
the complex arbitrage activities of a company like Enron,' he told the New 
York Times, adding: 'We're trying to do it now and we may have some results 
soon.' 
Mr Ferguson confirmed yesterday that the investigation would continue. 
The large-scale deregulation of regional electricity markets since 1996 has 
failed to reduce prices in many states, and since the chaos and power 
shortages produced by the botched deregulation in California, the pace of 
market reform has slowed down, much to the frustration of Enron. 
In their telephone conversation, a few weeks after Mr Hebert's appointment, 
he said Mr Lay told him that 'he and Enron would like to support me as 
chairman, but we would have to agree on principles'. 
Those principles would involve the pace and nature of deregulation. 
Mr Lay said that there was 'never any intent' to link Mr Hebert's employment 
with the commission's policies. 
When Mr Hebert, a former Mississippi state regulator, was given the 
chairman's job in January, the White House told him he would keep it at least 
until Mr Bush's other nominees, Pat Wood and Nora Brownell, were confirmed by 
the Senate. 
Their appointment was confirmed this week, and Vice-President Cheney told PBS 
that Mr Wood, head of the Texas public utility commission, should now get Mr 
Hebert's job. 
Mr Ferguson said yesterday that the president was the only one who could 
decide whether Mr Hebert should keep his job. 
Other candidates for seats on the commission also say that Enron played a 
role in the selection process. Joe Garcia, a Florida regulator and now a 
leader of the Cuban-American National Foundation, an exile pressure group, 
said he was interviewed by Mr Lay and other Enron officials.

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


NEWS
CALIFORNIA ENERGY CRISIS
Changes in Senate could offer state relief
Finlay Lewis and Toby Eckert
COPLEY NEWS SERVICE

05/26/2001
The San Diego Union-Tribune
1,2,6,7
A-1
(Copyright 2001)

WASHINGTON -- After weeks of impasse, a plan to bring emergency relief to 
California's suffering electricity customers suddenly seems likely in the 
Senate because a sympathetic friend unexpectedly finds himself in a position 
to help. 
This dramatic reversal of fortune will occur when Sen. Jeff Bingaman, D-N.M., 
becomes chairman of the Senate Energy and Natural Resources Committee because 
of Vermont Sen. James Jeffords' defection from the GOP.
Bingaman is expected to take control of the committee next week when Jeffords 
officially becomes a political independent and throws control of the chamber 
to the Democratic Party. Bingaman will replace Sen. Frank Murkowski, 
R-Alaska, a strong ally of the energy industry. 
Unlike Murkowski, Bingaman supports a bill championed by Sens. Dianne 
Feinstein, D-Calif., and Gordon Smith, R-Ore., to impose temporary restraints 
on wholesale power sales in the West. The bill is likely to command a 
majority if it comes to a vote in the committee. 
The price caps still face fierce resistance in the House and at the other end 
of Pennsylvania Avenue, where President Bush, armed with a veto pen, and Vice 
President Dick Cheney steadfastly resist movement toward any form of price 
controls. 
But because of a committee chairman's agenda-setting power, Bingaman's 
ascension would dramatically shift the prospects of the Feinstein bill and 
other energy issues in the Senate. 
Bush's proposal to open the Arctic National Wildlife Refuge to oil 
exploration already faced difficulty, but now opponents will have easier 
means to block it. And other environmentally contentious energy proposals 
could face tough scrutiny from Jeffords, who is expected to become chairman 
of the Senate's Environment and Public Works Committee. 
Still, the president will have the power to enact the bulk of his energy 
program because fewer than two dozen of his 105 proposals need congressional 
action. 
But the shift in the Senate allows Democrats to advance their own plan. At 
the top of the list are temporary price controls. 
"It's a priority for Sen. Bingaman," said Jude McCartin, a spokeswoman for 
the senator. "He would like to act quickly to meet the challenges." 
"Bingaman is from a Western state, unlike Murkowski," said Ashley Brown, 
executive director of an electricity-policy think tank at Harvard University. 
"His geographic outlook is going to be different. He is also going to be 
sensitive to Democratic senators from California. It's going to mean more to 
him than it meant to Murkowski." 
McCartin and aides to Feinstein were guardedly optimistic about the measure's 
prospects should the bill reach the Senate floor, where its bipartisan 
parentage will likely guarantee bipartisan backing. 
That does not mean Feinstein's bill is home-free. 
Bush and Cheney's opposition to price caps is rooted firmly in their belief 
that they would discourage investment in the energy industry, thereby 
resulting in even shorter power supplies and more California blackouts. 
In the House, a companion bill to the Feinstein-Smith measure is snarled in 
complex and inconclusive negotiations in the House Energy and Commerce 
Committee, and the House Republican leadership would be poised to bury any 
measure that might make it to the floor in defiance of Bush's wishes. 
But other factors may be bolstering prospects for action to ease the 
California crisis. 
McCartin pointed to the Senate's unanimous vote yesterday afternoon 
confirming two Bush nominees to posts on the Federal Energy Regulatory 
Commission as signaling a possibly more activist bureaucratic policy in 
dealing with the state's problems. 
The two new members of the nation's major regulatory authority over the power 
industry are Pat Wood III, the head of the Texas Utility Commission, and Nora 
Brownell, a Pennsylvania utility regulator. 
Bush reportedly plans to replace FERC Chairman Curtis Hebert with Wood. 
While observers say it is unlikely that Wood and Brownell would defy the 
White House, they note that the appointees have indicated they might take a 
more expansive view than most current FERC commissioners to bring relief to 
California. 
Once the Democrats take formal control of the Senate, probably about June 5, 
there could be other actions affecting California's power problems. 
Feinstein yesterday urged the likely chairman of the Senate Governmental 
Affairs Committee, Sen. Joseph Lieberman, D-Conn., to investigate whether 
energy companies are improperly influencing the FERC. 
She cited a report in yesterday's New York Times that Kenneth Lay, the head 
of Enron Corp., a Houston-based power marketing company, had offered to back 
Hebert in his effort to remain at the commission's helm if Hebert supported 
Enron's positions on electricity deregulation. 
Enron outpaced all other energy companies last year in contributing to GOP 
campaigns, while Lay has personally been one of Bush's most generous 
financial backers. 
"Since FERC has refused to fulfill its legally mandated function under the 
Federal Power Act to restore `just and reasonable' electricity rates, we need 
to ask whether undue influence by the companies that FERC regulates has 
resulted in its failure to act," Feinstein wrote in a letter to Lieberman. 
Senate passage of the Feinstein-Smith bill would send the measure to the 
House, where some Republican House members from California face close 
re-election races next year. 
A Field Poll recently showed that 75 percent of state residents view the 
electricity situation as "very serious" and that 59 percent say it was caused 
by energy companies seeking to increase profits. 
Democratic strategists, citing those findings, say some California lawmakers 
visiting their districts over the Memorial Day recess may come under pressure 
to take strong action to restrain energy prices.

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