Coal Scores With Wager on Bush; Belief That Mineral Is Part of 'Balanced' 
Energy Policy Lifts Industry Outlook
The Washington Post, 03/25/01

Energy trading floors represent ground zero in electricity crisis
Associated Press Newswires, 03/25/01

India: Centre's interest liability on dues to Enron starts
Business Line (The Hindu), 03/25/01

Victoria Station's pounds 250m facelift
The Independent - London, 03/25/01

Standoff may delay renegotiation on Enron project
The Times of India, 03/25/01

Deal to sell PGE may fall through
Associated Press Newswires, 03/24/01

Govt clears FDI proposals worth Rs 683 crore
The Economic Times, 03/24/01

Nigeria blames US firm for delay in power project: report
Agence France-Presse, 03/24/01

Enron deal with Sierra likely a bust / Buyer of Portland General having 
trouble raising cash
Houston Chronicle, 03/24/01

Market rebounds, but not stability
Houston Chronicle, 03/24/01

Midwest to face high gas prices again / Supply of anti-smog component already 
one-quarter below last year
Houston Chronicle, 03/24/01

COMPANY NEWS
ENRON SALE OF UNIT TO SIERRA PACIFIC IS DOUBTED
The New York Times, 03/24/01

Operators of California Power Grid Testify of System Abuses
KRTBN Knight-Ridder Tribune Business News: The Orange County Register - 
California, 03/24/01

Santa Clara Plans for More Power / Generators to be built on existing plant 
sites
The San Francisco Chronicle, 03/24/01

Calif. Crisis, M&A, Gas To Dominate Talk At Howard Weil
Dow Jones News Service, 03/23/01





A Section
Coal Scores With Wager on Bush; Belief That Mineral Is Part of 'Balanced' 
Energy Policy Lifts Industry Outlook
Dan Morgan
Washington Post Staff Writer

03/25/2001
The Washington Post
FINAL
A05
Copyright 2001, The Washington Post Co. All Rights Reserved

Few businesses placed as big a bet on Republicans in the last election as the 
coal industry, which gave 88 cents out of every dollar in campaign 
contributions to GOP candidates or organizations. Two months into the Bush 
administration, that wager has begun to pay off. 
President Bush has jettisoned a campaign promise to require coal-burning 
power plants to reduce emissions of carbon dioxide, after heeding industry 
warnings that such action could "kill coal." Now, industry officials who 
worked for this week's Environmental Protection Agency decision to revoke a 
Clinton administration crackdown on arsenic in drinking water are taking aim 
at more than two dozen pending rules regulating substances from coal mine 
dust and ozone to diesel particulates.
In the GOP-controlled Congress, lobbyists for coal companies, railroads and 
electric utilities are mobilizing behind tax credits, subsidies and 
regulatory exemptions for coal-burning utilities. 
The emergence of coal from the political shadows is due in part to Bush's 
conviction that the mineral, which is used to generate half the nation's 
electricity, is crucial to preventing the spread of the California energy 
crisis. 
Coal "didn't have a very friendly forum in this town" during the Clinton 
administration, an environmental official said. The Clinton administration 
favored rigorous enforcement of clean air controls on emissions by 
coal-burning utilities and encouraged expansion of power plants using cleaner 
natural gas. The Bush administration, in a tilt back the other way, contends 
that an expansion of coal-generated power must be part of the "balanced" 
energy policy needed to provide ample electricity at reasonable prices. 
But coal's new strength also rests on the enhanced influence, in the 
aftermath of last year's election, of a network of interests, such as 
electric utilities and railroads, that strongly oppose lessening the 
country's dependence on coal. 
In late February, senior executives of coal, utility and railroad companies 
descended on Washington under the auspices of an informal group, the 
Coal-Based Generators, to lobby for legislation providing tax credits and 
other subsidies for utilities using experimental "clean coal" technologies. 
Among them were Irl Engelhardt, chairman of the Peabody Group, the nation's 
largest coal enterprise, whose holding company contributed $250,000 to the 
Republican National Committee in July. Engelhardt himself served as an energy 
adviser to the Bush-Cheney transition team. 
Meanwhile, coal, rail and power companies such as Peabody Holdings Inc., 
Burlington Northern/Santa Fe, and Southern Co., provided funding last year to 
start Americans for Balanced Energy Choices, to develop grass-roots support 
for coal. 
"The market realities have changed, and the political dynamics have changed 
in Washington," said the group's president, Steve Miller, a Democrat who was 
Bill Clinton's campaign organizational chairman in Kentucky in 1992. "People 
have no idea of the environmental improvement the coal industry has made." 
To get that message across, Americans for Balanced Energy Choices has set up 
a Web site and prepared a media advertising budget of several million dollars 
to finance what Miller says will be "a longtime conversation with opinion 
leaders across the country." The purpose will be to counter the influence of 
environmental organizations. 
Separately, the Coalition for Affordable and Reliable Energy, made up largely 
of trade associations, has been set up to lobby in Washington and has begun 
running advertisements in Capitol Hill publications. 
Electric utilities and their executives and employees last year gave $18.4 
million to candidates and parties, of which $12.4 million went to 
Republicans, according to the Center for Responsive Politics, a campaign 
research group. Southern Co., one of the nation's largest coal-burning power 
producers, opposes the Kyoto protocol, under which signatory nations, 
including the United States, agreed to reduce greenhouse gas emissions to 
1990 levels. The Senate has never ratified the agreement. 
Southern Co. is represented in Washington by the lobbying firm headed by 
former Republican National Committee chairman Haley Barbour, a close 
associate of Senate Majority Leader Trent Lott (R-Miss.). 
In the House, Rep. Joe Barton (R-Tex.), chairman of the subcommittee with 
jurisdiction over clean air and energy, has vowed that legislation containing 
such restrictions will "never" pass through his panel. Until Barton's 
northeast Texas district was reconfigured in 1994, it contained strip mines 
and coal-burning power plants belonging to Texas Utilities Co., the third 
largest electricity producer in the United States. Barton has continued to 
receive funds from its political action committee. 
The coal industry itself has made use of its own extensive network of 
connections. The Interior Department's newly appointed deputy secretary is J. 
Steven Griles, who has lobbied for coal and gas companies ranging from 
Pittston Coal Co. to Dominion Resources. 
The Bush-Cheney transition team was sprinkled with industry officials, 
including Engelhardt and Steven Chancellor, president and chief executive of 
Indiana-based Black Beauty Coal Co. Chancellor and his company were major 
Republican contributors, and he hosted a fundraiser in August at his home 
attended by former president George Bush and vice president Dan Quayle, 
according to the Indianapolis Star. 
West Virginia coal executive James "Buck" Harless raised more than $100,000 
for President Bush and chipped in $100,000 to the Bush-Cheney Inaugural Fund, 
as did Peabody Holding Co. and Southern Co. 
The coal industry may enjoy even better connections in Congress. Along with 
Sen. Robert C. Byrd (D-W.Va.), Sen. Mitch McConnell (R-Ky.) has advanced 
legislation providing billions of dollars in tax credits for utilities, and 
indirectly benefiting contributors to GOP campaign committees he has headed. 
In the debate over global warming, coal interests have prevailed over 
environmental organizations and corporations that have been moving toward 
acceptance of the threat of carbon dioxide emissions. This small but growing 
group now includes BP Amoco PLC, Enron Corp., Entergy Corp. and American 
Electric Power, an Ohio-based coal-burning utility. 
Enron's chief executive, Kenneth Lay, one of Bush's most generous campaign 
supporters, has urged the president to create a trading system for carbon as 
a way of limiting emissions into the atmosphere. But Lay was not given 
advance notice of Bush's decision ruling out mandatory carbon controls, 
sources said. 
A spokesman said Lay was "somewhat disappointed that we don't have a process 
in place to deal with what he thinks is going to be a significant issue."


http://www.washingtonpost.com 

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



Energy trading floors represent ground zero in electricity crisis
By MICHAEL LIEDTKE
AP Business Writer

03/25/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

SAN FRANCISCO (AP) - In Houston, it's simply known as "the power corner." 
Separated by just a few city blocks, four major power wholesalers run 
Byzantine trading systems that sway energy prices across the nation with 
minimal oversight from the government. 
The Houston trading floors run by Enron Corp., Reliant Energy, Dynegy Inc. 
and Duke Energy represent ground zero in a power crisis threatening the 
quality of life in much of the Western United States this summer.
By seizing upon the opportunities created by deregulation and leveraging the 
Internet, the Houston traders have introduced the ruthlessness of the free 
market into the once-sedate power industry. 
In the process, they have driven two California utilities to the financial 
brink and electrified the electricity business, just as junk bond traders 
ignited Wall Street in the 1980s and venture capitalists fueled Silicon 
Valley in the 1990s. 
After raking in billions of dollars for their companies last year, the energy 
traders are emerging as the first business hotshots of the new millennium. 
"They are extremely good at what they do," said Severin Borenstein, director 
of the University of California at Berkeley's energy institute. 
"There are guys on Wall Street that spend all their time doing extremely 
complex calculations on bond yields and figuring out how to make the most 
money on the spreads. These traders (at the power companies) are doing the 
same thing with the energy market." 
As they become more sophisticated, the power marketers are moving much of 
their muscle online, where they are proving more adept at e-business than 
most of Silicon Valley's fallen Internet companies. 
Enron handles much of its trading business on a Web site launched in November 
1999. The company describes Enrononline.com as the world's biggest e-commerce 
site, based on the completion of 548,000 transactions, totaling $336 billion, 
with 3,000 customers in 2000. 
Following Enron's lead, Duke, Reliant and another major California generator, 
Mirant Corp., banded together with Wall Street investment banks Goldman Sachs 
and Dean Witter Morgan Stanley to launch IntercontinentalExchange.com. 
The 7-month-old site reported daily trading volumes of 3 million megawatt 
hours in late February. 
San Diego attorney Michael Aguirre believes the power companies are using the 
password-protected online exchanges to secretly share information and control 
the power supply to manipulate prices. Aguirre has spent the past six months 
scrutinizing the trading operations as he pursues a lawsuit alleging that the 
power generators broke antitrust laws. 
"The whole trading thing is just a front that lets them game the market," he 
said. "They can get away with it because no one (outside the industry) can 
figure out what they are doing." 
Enron says its trading system, particularly the online exchange, has resulted 
in fairer and more efficient markets. The allegations of market abuse are 
"just some sour grapes from people who didn't come up with the idea in the 
first place," Enron spokesman Eric Thode said Friday. 
One of the biggest distinctions between the Texas energy traders and the Wall 
Street securities traders is how they are regulated. 
The Securities and Exchange Commission and the Commodities Future Trading 
Commission oversee the trading of most of the nation's key markets. But the 
power traders answer to the Federal Energy Regulatory Commission, an agency 
with little training in the sophisticated financial instruments deployed by 
these marketers. 
The power traders aren't just holding California over a barrel. Other states 
are paying even higher prices - a factor that will likely further reduce 
supplies for California in the months ahead. 
In a series of recent deals disclosed to The Associated Press by a major 
marketer, energy traders charged California $330 to $360 per megawatt hour 
for July electricity. They fetched $415 per megawatt hour in a key Pacific 
Northwest market and $495 per megawatt hour in a major Arizona market for 
contracts covering the same time. 
A similar price disparity occurred for August electricity contracts. 
California paid top price of $395 per megawatt hour while the Pacific 
Northwest market paid $460 per megawatt hour and the Arizona market paid $535 
per megawatt hour. 
As the nation's largest power broker, Enron is the kingpin of the energy 
traders. 
Spread through seven floors at Enron's Smith Street headquarters in Houston, 
the energy specialists among the company's 1,500 traders try to divine where 
prices are headed, and then swap electricity and natural gas contracts like 
stocks and bonds. 
"You can walk into that trading room and if you didn't already know that you 
were on Smith Street in Houston, you would swear you were on Wall Street in 
New York," said Shannon Burchett, chief executive officer of Risk Limited 
Corp., a Dallas energy consultant. 
Although energy is its main business, Enron also trades many other 
commodities, including paper, lumber, steel and broadband access to the 
Internet. 
Enron's trading strategy remains a mystery even to industry analysts, partly 
because the company considers its techniques to be proprietary. 
Using a team of mathematicians and meteorologists, Enron's traders try to 
identify places where the company can buy electricity at the cheapest price 
and then deliver it for a higher price somewhere else. The traders post the 
prices at which it will buy and sell electricity. 
Enron's trading savvy yielded a big payoff last year. 
The trading business posted an operating profit of $1.6 billion, up 160 
percent from $628 million in 1999. When electricity and natural gas prices 
soared to record highs in the fourth quarter, Enron's trading profit more 
than tripled, from $151 million to $538 million. 
Without providing specifics, Enron officials said the profits poured in from 
all over the country, not just California. 
"Contrary to what you may hear or read, our success is linked to efficient 
markets, not higher prices in California, or anywhere else for that matter," 
Steve Kean, an Enron executive vice president, assured the U.S. Senate during 
January testimony. "What we are interested in is competitive and 
well-functioning markets. Our financial success is not built on California's 
back." 
More power companies are trying to emulate Enron's success by investing in 
elaborate trading floors and aggressively recruiting the brightest MBAs out 
of graduate schools. 
Williams Energy emerged as one of its industry's most profitable companies 
last year by capitalizing on electricity price swings from its 
21,000-square-foot trading floor in Tulsa, Okla. The operation includes a 
70-foot wall filled with secret data and two 30-foot data walls breaking out 
the latest information on energy futures. 
Even as its California utility sank deeper into debt with the electricity 
generators, PG&E Corp. continued to build a 137,000-square-foot trading floor 
in Rockville, Md., to trade electricity. PG&E's worsening financial woes 
finally forced the company to delay the expansion late last year. 
AES Corp. discovered the increasingly important role that trading floors play 
in the profit equation last year. The Arlington, Va.-based company owns three 
California power plants, but said it didn't make any money from them last 
year because of a contract that turns over the electricity sales to Williams. 
The arrangement left AES with an $11 million loss from its California 
operations last year. Williams doesn't break out its earnings by region, but 
its energy services division nearly tripled its profit in 2000 to $1.56 
billion.


With AP Graphic POWER PLAYERS 

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


India: Centre's interest liability on dues to Enron starts

03/25/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

MUMBAI, March 24. THE Government of India would incur an interest liability 
of eight per cent on the Rs 229-crore due that it owes Enron India, starting 
today. The company had invoked the Centre's counter-guarantee to recover the 
amount due from the Maharashtra State Electricity Board (MSEB). 
The Centre has one month to honour the guarantee. If no payment is made 
within 15 days, interest must be paid for the remaining two weeks.
According to Union Power Ministry officials, the Centre will have to pay 
interest at the rate of 1 per cent above the Bank Rate, currently at 7 per 
cent. 
In addition to the interest to be paid by the Centre for the guaranteed 
amount, an interest of "reference rate plus 2 per cent" is already being 
charged on the outstanding bills. The reference rate is calculated according 
to a separate formula in the power purchase agreement (PPA). 
According to the officials, "the Government will pay the money only after the 
Union Law Ministry reviews the dispute between MSEB and Dabhol Power Company 
over the Rs 401-crore penalty." This could mean a long wait for DPC and may 
also end up in international arbitration, say senior MSEB officials. 
MSEB has asked DPC to pay a penalty of Rs 401 crore for failing to make power 
available at 90 per cent plant load factor (PLF) within three hours (as per 
the power purchase agreement) of receiving the hourly requirement from MSEB. 
The "default" happened on January 28 when one of MSEB's units tripped and it 
required more power at short notice. 
"We have asked them to adjust their bills for December, January and February 
against the penalty," said Mr Vinay Bansal, Chairman, MSEB. 
The board owes DPC a total Rs 341 crore for the three months. 
While Enron officials have asked MSEB to at least pay the December dues, 
before the "default" occurred, the board still holds that DPC should "adjust" 
its bills against these charges. 
"The interests will be adjusted once the Government makes payments. 
MSEB will have to ultimately pay the amount as the Centre will recover the 
dues from the State, and it, in turn, from us," said Mr Bansal. 
Meanwhile, MSEB is "considering" paying its February bill to "ensure DPC's 
business is not disrupted" in case of delay. 
"We have received information that there may have been another default by DPC 
during February. But that matter will be discussed only in May. We will 
decide then if DPC is liable for another penalty," he said. 
And, an Enron official said the "company might consider waiving the interest 
on the guaranteed amount (Rs 229 crore) as we have been bending backwards 
anyway, as far as payments are concerned." 
Archana Chaudhary

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


Business
Victoria Station's pounds 250m facelift
HEATHER TOMLINSON

03/25/2001
The Independent - London
FOREIGN
1
(Copyright 2001 Independent Newspapers (UK) Limited)

Railtrack is planning a giant office and retail development at Victoria 
Station, London, estimated to be worth at least pounds 250m. 
The rail group is one of four companies planning major property developments 
in Victoria that could transform the area and compete with a similar projects 
at Paddington, west London.
The developments, also proposed by Grosvenor Estates, Howard Ronson 
Organisation (HRO) and Land Securities, total 1.4m square feet, larger than 
the Canary Wharf tower in London's Docklands. 
Railtrack is understood to be working on a masterplan for the site, which 
would see the development of up to 500,0000 square feet of space built above 
and around the station. 
Railtrack has one of the largest property development programmes in the UK. 
Valued at pounds 2bn, it dwarfs the development programme of Land Securities, 
the UK's largest quoted property company. 
Run by John O'Brien, Railtrack's property department is also planning a 
42-storey tower at Paddington Station and a huge mixed- use development with 
Pillar Property at Cricklewood, north London. 
At Victoria, Railtrack will launch a survey with the three other developers 
to gauge demand from potential tenants. 
But the developers could have an early boost. Enron, the US energy giant that 
pulled out of a deal to move to Canary Wharf last year, is now understood to 
be keen to expand its offices in Victoria. 
Huge development schemes like the ones planned in Victoria are notoriously 
tricky to execute. But property experts believe the companies behind the 
plans have sufficient clout to carry them off. 
Grosvenor Estates, the Duke of Westminster's private property company, is one 
of the largest land owners in London's West End. HRO is owned by Howard 
Ronson, estranged cousin of property tycoon Gerald Ronson, and has become a 
top player in UK development. Land Securities, valued at pounds 4.5bn, is a 
FTSE 100 company.

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


Standoff may delay renegotiation on Enron project
Vinu Lal

03/25/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)

MUMBAI: The much-touted renegotiation on the Dabhol Power project has 
stumbled upon a fresh controversy, which is likely to further delay the 
proceedings. 
While Enron as well as the Maharashtra State Electricity Board (MSEB) want 
officials from the Union ministries of power and finance to be present at the 
renegotiation hearings, the Centre has turned down the request. Due to this, 
though it is over two weeks since the terms of reference of the review 
committee were amended to include renegotiation of the power purchase 
agreement, no hearing has been conducted with the Dabhol Power Company (DPC). 
Sources said that due to this standoff the committee is unlikely to submit 
its report within first week of April according to the terms of reference.
An Enron spokesperson said, ``We have made our stand very clear before the 
committee that for a renegotiation of a contract signed by various parties, 
including the government of India, the government of Maharashtra and the 
Central Electricity Authority (CEA), all parties should be part of the review 
process.'' 
P.S. Paunikar, technical director, MSEB, said, ``We had requested top 
officials from the ministries of power and finance and the CEA to be present 
during the renegotiation meetings with the DPC. But the Centre has declined 
to depute any official for this purpose.'' 
DPC's stance has surprised industry observers since during the previous 
renegotiation committee proceedings under Kirit Parikh, the company had not 
set any conditions of this sort. The Centre has justified its stand not to 
depute any officials stating that review of Dabhol project is strictly a 
state affair and that it has no role to play in it. 
Meanwhile, sources say that a preliminary draft report of the committee is 
already finalised, but it has not incorporated the amendments made on March 
9. According to the amendments made by a government order, the committee has 
been empowered to ``renegotiate a new tariff structure and suggest measures 
to be taken to safeguard the interests of the state government and 
electricity consumers''. 
However, chief minister Vilasrao Deshmukh is said to be adamant on reviewing 
the project and the committee may call the DPC for renegotiation talks 
ignoring the conditions set by the firm. 
Interestingly, the power major has openly stated that it will not give 
confidential documents to the committee, which are crucial for a thorough 
review of the Dabhol project. 
Succumbing to pressure from the Left allies of the DF government, Mr Deshmukh 
had announced an amendment of the terms of reference of the Godbole 
committee. 
Though committee members were unavailable for comment, sources added that 
work on drafting the report had started on March 7 since the government had 
still not specified clearly the need to renegotiate the agreement then.

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


Deal to sell PGE may fall through

03/24/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

PORTLAND, Ore. (AP) - A deal to sell Portland General Electric Co. to 
Nevada-based Sierra Pacific Resources for $3.1 billion is in jeopardy because 
Sierra Pacific might not meet the financial requirements necessary for the 
purchase, a spokesman said Saturday. 
Executives from PGE's parent company, Enron Corp. of Houston, held a 
conference call with investors Friday to discuss the utility's sale, said 
Mark Palmer, Enron spokesman. The executives also dismissed rumors of a 
layoff in their broadband division, he said.
"There were three or four areas of noise about stock and concern that the 
Portland General-Sierra Pacific transaction won't take place," Palmer said. 
"CEO Jeff Skilling said the odds of that deal being closed are at 5 percent." 
Palmer said the reason hinges on Sierra Pacific's financial situation. It 
cannot buy Portland General until meeting requirements on debt limits and 
common stock values set by the Securities and Exchange Commission. 
"There's some restructuring language in Nevada that would not allow Sierra 
Pacific to sell some of their assets," Palmer said. "Sierra is concerned the 
SEC will not approve the deal unless they're able to raise cash by selling 
these assets." 
Earlier this month, Sierra Pacific's parent company, Las Vegas-based Nevada 
Power Co., also told The Las Vegas Sun the deal with PGE would likely fall 
through because of the financial problems. 
The Sun reported Saturday that Portland General's sale to Sierra Pacific 
likely won't be completed due to a California law that bars public utilities 
from shedding generators until 2005 because of an electricity shortage. 
Palmer would not comment on other buyers interested in the utility. 
He said Enron would continue working with Sierra Pacific until May 5, at 
which time either company can call off negotiations. Enron announced the sale 
in 1999, after buying the company in 1996. 
"It's not like either company is dropping it," Palmer said. "It's entirely in 
the hands of Sierra Pacific right now." 
Scott Simms, a spokesman for PGE, said Portland General has been excluded 
from most of the discussions. 
"We are the child and Enron and Sierra are the parents and it's sort of like 
they're talking about custody issues," he said. "There's always discussion 
between the two parties. We aren't privy to those discussions and probably 
shouldn't be." 
PGE supplies power to 728,000 Oregonians, Simms said. If successful, the 
merger between PGE and Sierra Pacific would create the third-largest utility 
in the West, serving 1.7 million customers in Oregon, Nevada and California.

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


Govt clears FDI proposals worth Rs 683 crore
Our Bureau

03/24/2001
The Economic Times
Copyright (C) 2001 The Economic Times; Source: World Reporter (TM)

NEW DELHI 
COMMERCE and Industry Minister Murasoli Maran on Friday cleared 48 foreign 
direct investment proposals involving inflows worth Rs 683 crore.
Proposals cleared include a Rs 230-crore project of Broadband Solutions for 
ISP services, Rs 148.03 crore proposal of Tamil Nadu Industrial Development 
Corporation and Rs 95.52 crore proposal of Lafarge India. 
Other major proposals cleared by the government include those of Housing 
Development Finance Corporation, Akzo Nobel Chemicals International BV of The 
Netherlands, BNP Paribas, TotalFina Elf and Saloman Smith Barney India. 
Broadband Solutions Pvt Ltd, an Enron group promoted project, has been 
allowed to buy out its joint venture partners to increase stake to 100 per 
cent and infuse additional equity to the extent of Rs 230 crore. 
TIDCO has been allowed to increase foreign equity stake in a venture that is 
setting up a hi-tech industrial park to 99 per cent from the existing level 
of 89 per cent. This will see infusion of Rs 148.03 crore into the venture. 
Maran has also cleared the proposal of Financiere Lafarge of France to 
increase stake in Lafarge India Ltd to 12.48 per cent from the existing level 
of 4.61 per cent. 
The additional shares would be acquired from HDFC and two investment 
companies for Rs 95.52 crore. With this, the total holding of the French 
cement major will go up to 73.13 per cent in its Indian subsidiary. 
HDFC has been allowed to allot 26 per cent equity stake to Standard Life 
Investments of Scotland for Rs 56.60 crore for portfolio management services, 
management and advisory services. 
Akzo Nobel Chemical has been allowed to increase equity stake in a project to 
74.98 per cent from the existing level of 40 per cent. 
The Dutch company will infuse Rs 34.20 crore for the additional stake. 
BNP Paribas Equities has been allowed to issue preference shares worth Rs 26 
crore for its non-banking financial services. 
The 5 per cent redeemable non-cumulative non-convertible preference shares 
would be subscribed by BNP Equities Mauritius. Saloman Smith Barney India, 
too, has been allowed to increase preference equity. 
The Citibank group entity will Rs 24.91 crore for additional preference 
equity in the Indian subsidiary. 
TotalFinaElf has been allowed to incorporate a 100 per cent owned subsidiary 
with investment of Rs 23 crore to provide technical, managerial and 
operational support services in the development of projects and 
infrastructure facilities for oil, gas and power sector. 
Among other proposals cleared today was that of Bayer Industries to increase 
its stake in Bayer India Syntans, a venture engaged in manufacturing and 
marketing of leather chemicals and auxiliaries, from 70 per cent to 100 per 
cent. 
Bayer will buy out its joint venture partner Indian Syntans Group Rs 4.46 
crore. 
British Petroleum has been allowed to increase its holding in Tata BP 
Lubricants to 99 per cent from the existing level of 50 per cent. BP will 
acquire the shares for Rs 6.37 crore. 
Selviac Nederland BV has been allowed to increase its holding in Godrej 
Pillsbury to 56.50 per cent from the existing level of 51 per cent for a 
consideration of Rs 5.61 crore. Godrej Pillsbury manufactures wheat flour, 
cake/dessert mixes and canned vegetables. 
The government has also cleared applications of several companies for 
amendment to their foreign collaboration approvals. These include 
applications of LG Chemicals, IBM India, Osram GmbH and Nestle India.

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


Nigeria blames US firm for delay in power project: report

03/24/2001
Agence France-Presse
(Copyright 2001)

LAGOS, March 24 (AFP) - Nigeria has blamed US power group Enron for delays in 
executing an electricity project in the economic capital Lagos, a press 
report said Saturday. 
The 800-million-dollar investment deal to supply electricity to the city grid 
was signed in December 1999 between Lagos State, the Nigerian state-run 
electricity operator NEPA and US power group Enron Inc.
Under the terms of the agreement, Enron was expected to complete the first 
phase of the project by December last year. 
A statement from the office of Nigeria's Power Minister Segun Agagu, cited by 
the newspaper This Day, accused the US company of not meeting the deadline. 
"NEPA and the government have exercised great patience and restraint in the 
face of these delays and breaches of contract," the statement said. 
It said however, that Nigeria "will continue to honour all obligations and 
commitments that are genuinely and transparently negotiated." 
Enron late last year shipped a 90 megawatt floating power plant to Nigeria, 
which was brought in on barges. 
The company also agreed an 800 million dollar investment in a new 540 
megawatt power plant to be built north of the city. 
The two plants were to boost the currently inadequate power supplies 
available to the country's economic capital. 
joa/nb

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

BUSINESS
Enron deal with Sierra likely a bust / Buyer of Portland General having 
trouble raising cash
MICHAEL DAVIS
Staff

03/24/2001
Houston Chronicle
3 STAR
1
(Copyright 2001)

Enron Corp.'s $3.1 billion deal to sell its regulated electric utility 
Portland General Electric to Sierra Pacific Resources will likely fall 
through because of regulatory problems that leave it short of cash, officials 
for the companies said Friday. 
Jeffrey Skilling, Enron's chief executive, said in a conference call Friday 
that there is only a 5 percent probability that Sierra Pacific's purchase of 
Portland General will be closed.
A Sierra Pacific Resources spokesman confirmed that the deal is in trouble. 
"It's going to be very difficult for the transaction to be completed," said 
Karl Walquist, spokesman for Sierra Pacific in Reno, Nev. 
Enron announced the deal to sell the utility that serves the Portland, Ore., 
region in November 1999. The company had been one of the first natural gas 
and power marketers to buy a regulated electric utility. Enron paid $1.8 
billion for the company in 1997 and assumed $1.1 billion in debt. 
If the deal falls through, it isn't likely to pose any big problems for Enron
. 
Portland General has consistently posted profits for Enron - although much 
less than the company's natural gas and power marketing operations - and 
analysts say it should not be hard to find another buyer. 
When it bought Portland General, Enron also acquired Portland General's 
fledgling telecommunications business. That small division of the Portland 
utility was the seed for Enron's broadband operations, one of the company's 
most promising new lines of business. 
Enron's shares have regained some of the ground they lost in the past two 
weeks. Enron closed Friday at $59.40, up $4.37. 
The Portland General deal falling through is the second blast of bad news 
that Enron has sustained recently. Enron and Blockbuster announced recently 
that they had called off their plans to team up to provide movies on demand. 
The bad news and the overall market decline trimmed about 30 percent from the 
value of Enron's shares over the past two weeks. Enron's shares closed as low 
as $55 earlier this week. On Feb. 14, the same shares closed at $80. 
The company said earlier this week that it expects profits of $1.70 to $1.75 
a share this year. 
Enron raised its 2001 profit estimate in January, citing growth in European 
and North American trading and more business from its fiber- optic network. 
It previously expected to earn $1.60 to $1.70 a share. 
Sierra Pacific has utilities that serve southern Nevada and the Lake Tahoe 
area. 
The company posted a net loss of $39.8 million for the year 2000, blaming the 
loss on the high cost of power it bought on wholesale markets. The company 
has not been able to recover those costs through higher rates as the tight 
power markets in California have pushed up prices in neighboring states. 
The Portland General sale is in jeopardy because the company may not be able 
to raise the money it needs to close the deal. 
Nevada has not opened its markets to customer choice. The problems California 
experienced after it opened its electricity markets spooked Nevada lawmakers 
so badly that they have delayed a plan to open their state in September. 
Delaying the deregulation means Sierra Pacific will not be able to sell a 
Nevada power-plant stake it needed to raise cash to buy Portland General. 
Even if the deal with Sierra Pacific falls through, however, there are other 
buyers waiting in the wings, said Donato Eassey, energy analyst with Merrill 
Lynch Global Securities in Houston. 
"There is a laundry list of folks standing in line to buy Portland General," 
Eassey said. "They will probably just continue to run those assets 
efficiently and wait until another buyer comes along." 
Skilling said Portland General is making money, and Enron still is willing to 
sell the Oregon utility.

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


BUSINESS
Market rebounds, but not stability
Houston Chronicle News Service

03/24/2001
Houston Chronicle
3 STAR
1
(Copyright 2001)

NEW YORK - Battered prices and fresh memories of a remarkable rally attracted 
bargain hunters on Friday to pick up a wide array of the stock market's 
offerings. 
The nation's largest technology companies posted strong gains, and the Dow 
Jones industrial average put some distance between itself and the definition 
of a bear market, which it had temporarily dropped below on Thursday before 
rebounding from a steep decline.
But as corporate earnings continue to erode and economic views only grow 
murkier, modest reversals and even more wild swings seem likely before stock 
prices settle on a consistent direction again, market analysts said. 
"I think these kind of market swings are going to be typical," said David 
Henwood, chief investment officer for Raymond James & Associates. "Is there 
anything out there on the horizon to cause you to believe there's any 
sustainability to it?" 
The Dow gained 115.30 points, or 1.2 percent, to close at 9,504.78, with a 
strong contribution from its technology components. 
Despite Thursday's late rally and Friday's gains, the Dow is still down 
318.63 points, or 3.2 percent, for the week. 
"The market still appears to lack confidence and conviction," said Alan 
Ackerman, market strategist for Fahnestock & Co., a brokerage firm. 
"Corporate earnings visibility keeps getting pushed further and further 
back." 
Meanwhile, the technology-heavy Nasdaq composite index rose 30.98 points, or 
1.6 percent, to 1,928.68, bringing its gain for the week to 2 percent. 
And the Standard & Poor's 500-stock index gained 22.25 points, or 1.99 
percent, to 1,139.83, leaving it down 1 percent for the week. 
In part, the stock market's newfound strength seemed to reflect a sort of 
afterglow following the Dow's rally Thursday afternoon. 
The confidence spread to the technology sector, where stocks have been 
battered more than 60 percent from levels of a year ago. 
"Eventually you just say these things are just too cheap to sell," said James 
Crawford, a portfolio manager at Trevor Stewart Burton & Jacobsen. "We could 
be looking at a half-decent rally. Maybe not back to the old highs, but at 
least back to something you could make a little money on." 
Microsoft, a leading Nasdaq stock as well as a Dow component, gained $2.56, 
to $56.56, while Dell Computer rose $1.19, to $27.44. 
Buyers also seemed unfazed by Motorola's announcement that it would lay off 
4,000 workers. The struggling wireless phone maker already had announced 
18,000 job cuts this year. Its shares rose 31 cents, to $15.99. 
Shares of Enron Corp. surged nearly 8 percent as Chief Executive Officer 
Jeffrey Skilling assured analysts there are no layoffs planned for the 
company's broadband division. Enron shares began plunging this week because 
of layoff rumors, setting a 52-week low of $51.51 before rebounding. Enron 
closed up $4.38 at $59.40. 
However, Immunex fell $7.25, or 38.4 percent, to $11.62, after the 
biotechnology company said clinical trials of its treatments for chronic 
heart failure and asthma had failed, dealing a blow to the company's effort 
to expand its product line beyond its treatment for rheumatoid arthritis. 
Advancing issues outnumbered decliners nearly 2-to-1 on the New York Stock 
Exchange and the Nasdaq Stock Market. The Russell 2000 index, which tracks 
the shares of smaller companies, rose 10.47 to 443.27. 
Consolidated volume, which includes all NYSE-listed shares, came to 1.58 
billion, down sharply from the near-record 2.04 billion traded Thursday. 
The 30-year Treasury bond declined 20/32 point to yield 5.31 percent, up from 
5.26 percent a day earlier. 
The dollar was quoted at 122.60 Japanese yen in late New York trading, down 
more than a yen from 123.63 Thursday. The euro closed at 88.85 cents, 
slightly higher than its 88.75 cents Thursday. 
The dollar fell to 9.575 pesos from 9.620. The peso rose to 10.4439 cents 
from 10.3950. 
In Mexico, the bolsa closed 0.316 percent lower, down 17.81 points at 
5,618.67. 
Overseas markets were higher Friday. Japan's Nikkei stock average closed up 
2.8 percent. In Europe, Germany's DAX index rose 2.9 percent, Britain's FTSE 
100 advanced 1.6 percent, and France's CAC- 40 climbed 2.6 percent.

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


BUSINESS
Midwest to face high gas prices again / Supply of anti-smog component already 
one-quarter below last year
Reuters News Service

03/24/2001
Houston Chronicle
3 STAR
2
(Copyright 2001)

NEW YORK - Supplies of the key blending component for U.S. anti- smog 
gasoline are running nearly a quarter below this time last year, setting the 
stage for another summer pump price spike, the Energy Information 
Administration said this week. 
Stocks of methyl tertiary butyl ether, or MTBE, an additive used by refiners 
to blend cleaner-burning reformulated gasoline required in a third of the 
nation's pumps, were at 7.96 million barrels in February or 22 percent below 
year-ago levels, the statistics branch of the Department of Energy said.
Stock levels at this time of the year are crucial because most refiners start 
gearing up to blend the summer gasoline grades in March. 
"We're certainly starting off behind the eight ball," said one Houston-based 
consultant. 
The supply crunch is the result of the trickle-down effect of the record-high 
cost of natural gas, from which MTBE is derived. 
A quadrupling of natural gas prices in December and January from the previous 
year spurred producers to profit more by selling the pure gas to power 
companies instead of stripping out the methanol and butane needed for MTBE. 
Several of the country's major producers of MTBE were either shut down or 
operating at severely reduced capacity from December to February, including 
Enron Corp., Valero Energy Corp. and Global Octanes Corp. 
As a result, the year started with around 8 million barrels, or 14 percent 
less than last January's supplies, which industry analysts already considered 
tight a year ago. 
Although natural gas prices eased last month and allowed MTBE plants to come 
back up, there were problems in restarting several of the facilities after 
remaining idle for a month or two. 
Last year's Midwest gasoline spike came amid new environmental rules imposing 
more stringent regulations for a new reformulated grade called RFG 2. 
This year, industry sources say the outlook looks just as expensive for the 
consumers in the Midwest, especially after the closure of refiner Premcor's 
80,000 barrel per day Blue Island refinery outside Chicago. The defunct 
plant's production used to provide Chicago with about half of its cleaner 
gasoline. 
In an attempt to steer clear of volatile prices, the Environmental Protection 
Agency said last week it will relax its emission standards from gasoline in 
Chicago and Milwaukee, which basically allows more ethanol - the corn-based 
alternative oxygenate to MTBE.

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


Business/Financial Desk; Section C
COMPANY NEWS
ENRON SALE OF UNIT TO SIERRA PACIFIC IS DOUBTED
Bloomberg News

03/24/2001
The New York Times
Page 3, Column 1
c. 2001 New York Times Company

The Enron Corporation said yesterday that its $3.1 billion sale of the 
Portland General Electric Company to Sierra Pacific Resources might not be 
completed. ''There's probably a 5 percent probability that Sierra Pacific's 
purchase of Portland General will be consummated,'' the chief executive, 
Jeffrey Skilling, said on a conference call with investors. Enron said in 
January that Sierra Pacific might not be able to sell a Nevada power plant 
stake as needed to win regulatory approval for the Portland General 
transaction. Enron blamed a California law that barred public utilities from 
shedding generators until 2005 because of an electricity shortage.

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


Operators of California Power Grid Testify of System Abuses

03/24/2001
KRTBN Knight-Ridder Tribune Business News: The Orange County Register - 
California
Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World 
Reporter (TM)

WASHINGTON--The operators of the state's electricity grid said Thursday that 
California and its utilities have paid $6.8 billion too much for electricity 
since last spring and they want federal regulators to order power suppliers 
to give some of that money back. 
The state contends that the overcharging was made possible because some power 
generators kept prices artificially high through questionable bidding 
practices or by limiting the supply of electricity.
But unless the Federal Energy Regulatory Commission changes its philosophy 
and methods, the grid's plea for relief could fall on deaf ears. 
Federal regulators have so far been willing to review only transactions that 
took place during Stage 3 alerts, when the state is on the verge of the kind 
of rolling blackouts that swept through California this week. 
And FERC's commissioners say they can only consider alleged overcharges since 
Oct. 2, which they previously set as a starting point for considering any 
refunds. The state's analysis goes back to last May. 
"We have no recourse legally to go back retroactively and look at rates that 
occurred before we set the refund-effective period," FERC Commissioner Linda 
Breathitt said in an interview Thursday. 
Breathitt and FERC's chairman, Curt Hebert, defend only reviewing charges 
during Stage 3 alerts. 
"Those are the hours when we believed that the exercise of market power would 
have been most prevalent," she said. 
Limiting the review to that time, says dissenting Commissioner William Massy, 
virtually guarantees there will be few or no refunds. There were only two 
hours of Stage 3 alerts during 2000, he said. 
"If you are concerned about a high bid during shortage conditions, you would 
be doubly concerned about that same bid under conditions where there was 
plenty of supply," Massey said Thursday in an interview. 
In fact, the California Independent System Operator, which manages the 
state's power grid, found that significant market power is being exercised 
during all market conditions, and that $6.2 billion of the allegedly 
excessive power costs were billed when no Stage 3 emergency existed. 
According to studies by the ISO's economists, suppliers used "well-planned" 
strategies, including offering part of their capacity for sale at a much 
higher price than other sellers. The ISO studied transactions involving 21 
generating companies. It did not release the names of any of them. Leading 
suppliers in California include Dynegy Inc., Duke Energy Corp., Reliant 
Energy Inc., Williams Cos. and Enron Corp. 
"The prices were above a normally competitive market," said Anjali Sherrin, 
author of the ISO's analysis. 
The $6.8 billion includes $562 million in alleged overcharges during December 
and January. Of those, FERC has proposed refunding $69 million for January. 
The power generators accused of the overcharges have until the end of today 
to give tell FERC why they believe those charges were justified. 
The ISO wants federal regulators to step in and stabilize the wholesale 
electricity prices that have pushed Southern California Edison and Pacific 
Gas & Electric Co. to the brink of insolvency. 
Power companies that sell to the ISO and the utilities said they were 
confident an independent examination will find that they did nothing wrong. 
"We stand by our practices," said Richard Wheatley of Reliant Energy in 
Houston, which owns about 8 percent of California's in-state generating 
capacity. "We have operated legally and ethically at all times in 
California." 
FERC has been under fire from state and federal officials and lawmakers for 
not being aggressive in dealing with the electricity crisis. 
In recent weeks the agency has taken several actions, including proposing 
refunds for January and February. 
But those who have watched the agency over the years say the actions do not 
yet signal a change of course from its posture of preferring to let the 
markets work their will. "I think what they are trying to do is the minimal 
amount possible, to say they are on top of the situation," said Bill Marcus, 
an economist at JBS Energy in Sacramento, an energy and water-resources 
consulting firm. "They'll probably figure out a way to back down from the 
refunds." 
Perhaps the most controversy has come over FERC's opposition to any form of 
price caps. 
The Bush administration as well as Hebert are dead set against caps. They say 
increased supply and conservation are the proper solutions and that price 
caps would retard new generation. 
Massey supports them, however, and Breathitt says she is becoming 
increasingly worried about the short-term problem in California and is open 
to some form of caps. 
But, she says, unless Hebert's mind can be changed, he can block even a study 
of proposed caps.

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


NEWS
Santa Clara Plans for More Power / Generators to be built on existing plant 
sites
Michael McCabe
Chronicle Staff Writer

03/24/2001
The San Francisco Chronicle
FINAL
A.15
(Copyright 2001)

Anticipating vastly increased demand for power from Silicon Valley's 
high-tech companies, the city of Santa Clara is planning to build up to four 
small to medium electricity generating plants. 
The goal is to increase the city's electrical supply by as much as 50 
percent. City officials say the plants, to be built on existing power 
generation sites in industrial areas, could be online as early as next year.
Unlike the San Jose City Council, which rejected Calpine's plan to build a 
600-megawatt plant in the city's southern end, the Santa Clara council 
directed staff to seek proposals for building the small to medium plants. 
The plants probably would be owned and operated by the municipal electric 
utility, Silicon Valley Power, or possibly by private companies. 
"These plants are being built to meet our future load requirements," said 
Larry Owens, division manager of customer services for the city's power 
company. "Adding new generation to our portfolio of existing in-town 
resources will keep us ahead of the curve." 
Santa Clara, along with Palo Alto and Alameda, is among the few 
municipalities in the Bay Area that own and operate its own utilities. The 
city generates 40 percent of its power with plants it owns or in partnership 
with other municipal utilities. It also has long-term contracts with other 
power companies, including Pacific Gas and Electric Co. and Enron. 
Palo Alto officials have recently raised the possibility that they too may 
build a small power plant in their city to augment energy supplies. 
In Santa Clara, as much as 80 percent of the additional demand is expected to 
come from high-tech companies, said John Roukema, the utility's assistant 
director. 
"A lot of the new demand will come from Internet data centers, where they 
take whole buildings and put wall-to-wall computers inside to act as servers 
for Web sites," Roukema said. "These are very energy-intensive users." 
Plans for buildings stuffed with computers are sprouting up in other cities 
as well. San Jose officials gave preliminary approval last week to what would 
be the world's largest "server farm." The sprawling facility to handle 
Internet traffic would drain about 150 megawatts of power from the state 
electricity grid. 
Santa Clara, which has two power plants within the city's limits, wants to 
build the four plants next to existing power substations at 1205 Space Park 
Drive and 2970 Lafayette St., and next to its two power plants at 525 Roberts 
St. and 2339 Gianera St. 
Their power capabilities would range from 50 to 130 megawatts. A 130-megawatt 
plant could provide power to 130,000 homes in the city, but 90 percent of the 
city's power goes to commercial and industrial customers. 
Santa Clara, a city with a population of just over 100,000 people, has 
several prominent Silicon Valley companies within its boundaries, including 
Intel Corp., Sun Microsystems, 3Com, and Applied Materials. 
Unlike San Jose, Santa Clara officials anticipate little opposition to the 
plants, mainly because they would be relatively small and they would be 
located in industrial areas. 
If all four plants are built, the total cost is estimated at $130 million, to 
be paid for with revenue bonds or with the city's existing reserves. City 
officials insist customers will not end up with higher bills. 
"What this is all about is stable prices and supply for our customers," said 
Carol McCarthy, Santa Clara's deputy city manager.

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


Calif. Crisis, M&A, Gas To Dominate Talk At Howard Weil
By Christina Cheddar
Of DOW JONES NEWSWIRES

03/23/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW YORK -(Dow Jones)- As hundreds of energy company executives and investors 
gather in New Orleans beginning Sunday evening for the Howard Weil Energy 
Conference, the customary talk about oil prices may get drowned out by the 
roar of other industry concerns. 
Issues such as the California power crisis, the continuing march of industry 
consolidation, and the rise in natural gas prices have been stealing 
headlines for months, and are likely to take center stage at the conference, 
which tends to be one of the more prominent industry gatherings each year.
In addition, participants will be honing in on the trend toward energy 
convergence, where companies market both gas and power, have trading 
operations, and, in many cases, have pipeline assets and power-generating 
facilities. 
Rising energy prices also have led industry observers to ask questions about 
alternatives to oil and gas. In response, Howard Weil, which is a unit of 
Legg Mason Inc. (LM), has added a fourth day of company presentations 
dedicated to power technologies. Presenting on that day will be microturbine 
manufacturer Capstone Turbine Corp. (CPST), gas-to-liquids technology 
developer Syntroleum Corp. (SYNM), and power-quality product maker Active 
Power Inc. (ACPW). 
Still, oil prices remain at the heart of the industry, and executives will be 
weighing in with their views about where prices are heading. 
Kicking off the conference presentations will be Chevron Corp.'s (CHV) Chief 
Executive Dave O'Reilly. 
Other oil companies presenting at the conference include Conoco Inc. (COCA, 
COCB), USX-Marathon Group (MRO), Phillips Petroleum Co. (P) and Anadarko 
Petroleum Corp. (APC). 
Included among the oilfield services companies are Global Marine Inc. (GLM), 
Halliburton Co. (HAL), Transocean Sedco Forex Inc. (RIG) and Schlumberger 
Ltd. (SLB). 
El Paso Corp. (EPG), Dynegy Corp. (DYN), Enron Corp. (ENE), and Reliant 
Energy Inc. (REI) are among the convergence and power companies making 
presentations. 
Barrett Resources Corp. (BRR), which is fending off a hostile bid from Shell 
Oil Co., was slated to appear Monday, but has pulled out of the conference. 
Speculation continues over whether Shell's bid will be challenged by a rival 
for the Denver oil and gas exploration and production company. 
Last year, Anadarko, of Houston, created a stir by announcing its plan to 
acquire Union Pacific Resources Corp. on the morning of its presentation. 
Participants may be looking forward to other comparable industry developments 
to occur at this year's conference. 
-By Christina Cheddar, Dow Jones Newswires; 201-938-5166; 
christina.cheddar@dowjones.com

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