California's Most Wanted Honchos
Business Week, August 13, 2001

The Smart Business 50
Ziff Davis Smart Business ,August 13, 2001

Enron Seeks Sale of Azurix Argentina Assets - Paper
Dow Jones International News, 08/07/01

USA: AOL Time Warner relaunches Business 2.0 magazine.
Reuters English News Service, 08/07/01
VENEZUELA: Venezuela OKs Petrotrin stake in offshore oil field.
Reuters English News Service, 08/07/01

INDIA: S&P downgrade seen hurting Indian markets briefly.
Reuters English News Service, 08/07/01
Enron unit Azurix to sell Argentina ops to Bouygues' Saur - report
AFX News, 08/07/01
Ziff Davis SMART BUSINESS Honors the Top 50 U.S. Companies That Are Using the Internet to Grow Their Business
PR Newswire, 08/07/01
PGE Joins Other Western Utilities to Oppose FERC Actions
Business Wire, 08/07/01
Four Utilities Seek Changes to California Price Caps (Update1)
Bloomberg, 08/07/01

American Water to Pay $150 Mln for Enron Water Unit (Update2)
Bloomberg, 08/07/01

NewPower Sees 2001 Sales Below Forecast, Stock Falls (Update5)
Bloomberg, 08/07/01



California's Most Wanted Honchos
Business Week, August 13, 2001

It may be humid in Houston, but it's even stickier in California if you're a Texas energy exec. Enron Chairman Kenneth Lay indefinitely postponed an Aug. 7 speech to Town Hall Los Angeles, a civics organization. The reason? Enron confirms it feared Lay would be arrested if he set foot on California soil. Enron (ENE) has been cited for contempt by a California Senate committee investigating charges of electricity price gouging. Enron refuses to provide what it calls classified documents unless a judge ensures they'll remain confidential. "The Senate is looking for a political scapegoat, and we can't trust the situation," says an Enron spokeswoman.

Lay isn't the only Texan to cancel California. Reliant Energy (REI) Chairman R. Steve Letbetter skipped a July 18 speech to the same group. Reliant was also cited by the Senate. A Reliant spokesman says Letbetter had more urgent business in Houston.

Of course, Lay may also have been trying to avoid the fate of his CEO, Jeffrey Skilling. In San Francisco on June 21 (pre-citation), an electricity activist hit Skilling with a cream pie. 
By Christopher Palmeri



The Smart Business 50
By The Editors of Ziff Davis Smart Business, Ziff Davis Smart Business 
August 13, 2001 9:00 PM PT

Last year, in the first smart business 50, we defined a new kind of Internet company. Never mind Yahoo and eToys and Pets.com. Instead we highlighted companies established years before the Web-and honored those that 
had most successfully embraced the Net to expand and enhance their business. If last fall you'd invested in the publicly traded stocks among those 50 most Internet-savvy U.S. companies-including General Electric, Enron, Charles Schwab, UPS, Lands' End, and W.W. Grainger-you'd have beaten the market overall (see chart, page 69). 
Live and learn. By now it's conventional wisdom that the Internet isn't a business model, it's just a bunch of com puters connected together. Using it as a revolutionary 
communications medium is a first step, but delivering value to customers-and making more money than you spend-remains key to business success. 
"Why does a company like Carrier do e-business?" asks Andre Papaleo, vice president of e-business at the 99-year-old manufacturer of air conditioners. "Because we love to program in Java?" No. Carrier's e-business efforts, like any other initiatives, must meet one or more specific criteria, he says. They must increase market share, improve profitability, bolster asset velocity by speeding product cycle times, or enhance user satisfaction. 
If the Net isn't doing at least one of those things, why bother? 
As we surveyed companies for this year's Smart Business 50, we learned much about what's worked online in 2001. We've pulled out the 10 key trends in Internet business and labeled them as lessons. 
The lessons are diverse. Enron, our top company this year, stormed onto the Internet with one of the largest private marketplaces in history, doing over $3 billion in transactions a day. As many public online marketplaces continue to flounder, the success of Enron Online shows that the best way to attract buyers and sellers to a market is not to build a Web site and hope they come, but to be an attractive buyer and seller yourself. 
General Electric (No. 4) has turned the Internet inward to use it as a powerful collaboration platform. General Motors (No. 33) and Raytheon (No. 34), meanwhile, are among the leaders in using the Net to teach and train their employees. 
Dell (No. 9) and Herman Miller (No. 10) exemplify how the Internet build-to-order model not only gives customers what they want, but slashes inventory and production costs. Chemical maker Sigma-Aldrich (No. 20) now uses content to drive its e-commerce. 
Meanwhile, as the Internet matures in the 21st century, it's moving into new places. Though Americans haven't embraced shopping from cell phones and PDAs in force, wireless data technology is improving, and United Airlines' (No. 32) wireless services for travelers are a perfect example. Rumpus (No. 15) decided not to play ball with traditional toy retailers and children's media experts, instead becoming one of the most prolific developers of animation on the Web. 
Carrier (No. 48) is among the forward-thinking manufacturers incorporating the Internet into their products-in Carrier's case, thermostats and air conditioners-to make them more desirable and provide better information about their use. The Internet is finding a home, too, in a venue once thought inhospitable: brick-and-mortar stores. Internet kiosks in Staples' (No. 38) more than 950 stores help shoppers go home satisfied. 
And the success of credit card issuer Capital One Bank (No. 42), after it waited so long to formulate its Internet plan, shows what else has changed. Last year it was fashionable to rap laggard companies that hadn't rushed their core business onto the Web. As it turns out, other banks' supposed first-mover advantage proved to be less useful than Capital One's patient insistence on first understanding what worked. 
How We Did It
For this year's Smart Business 50, our team of reporters and editors did what journalists do best: months of research, starting with leading U.S. companies across every industry, as well as nonprofit organizations and government agencies. We ruled out pure-play Internet companies-they're not what this list is about. We interviewed e-business chiefs at diverse companies and asked them to nominate their peers. 
We also consulted the experts. Two advisors in particular pointed us to e-business leaders in their areas of expertise: Patricia Seybold, CEO and founder of the Patricia Seybold Group and author of The Customer Revolution (Crown Business, 2001), helped identify companies that use the Web to bolster their customer capital. William Markham, a logistics expert at AT Kearney, pointed us to businesses successfully integrating the Net in logistics and distribution processes. 
Finally, we selected leaders in retailing, manufacturing, financial services, media, health care, transportation, distribution, and other sectors. Ultimately, the ranking represents the well-considered opinion of the Ziff Davis Smart Business editors. 
We learned a lot. We think you will too. 
No. 1: Enron
http://www.zdnet.com/smartbusinessmag/stories/all/0,6605,2799242-4,00.html


Enron Seeks Sale of Azurix Argentina Assets - Paper

08/07/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

BUENOS AIRES -(Dow Jones)- Azurix Corp., a unit of Enron Corp.(ENE), plans to sell its Argentina operations to Societe de Amenagement Urbain et Rural, or Saur, of France, its partner in Mendoza province, the Buenos Aires Economico newspaper reported Tuesday. 
John Ambler, chief spokesman for Houston-based Enron's Latin America operations, said company guidelines regarding possible asset sales prevented him from commenting on the newspaper report.
However, "Azurix has made it clear that it is looking to divest its assets worldwide," Ambler said. 
On Monday, American Water Works Co. (AWK) agreed to buy Azurix's North American operations for an undisclosed amount. Enron took Azurix private earlier this year. 
Azurix and Saur each own 32.1% of Obras Sanitarias de Mendoza, a water company in which Azurix bought a minority stake in May 1998, Ambler said. 
In July 1999, Azurix won the bidding for the state-run Direccion de Obras Sanitarias de Buenos Aires and currently owns 90% of the water company, which serves the largest and most populous of Argentina's 23 provinces. 
Earlier this year Azurix was criticized by the government of the province of Buenos Aires for the quality of its service and was asked to increase its investments in the province's drinking water and sewer systems. 
-By Tim Loughran, Dow Jones Newswires; 5411-4313-1918; tim.loughran@dowjones.com

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


USA: AOL Time Warner relaunches Business 2.0 magazine.
By Reshma Kapadia

08/07/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW YORK, Aug 7 (Reuters) - Media giant AOL Time Warner Inc., which had launched a new economy magazine last year at the height of the Internet boom, unveiled a new version of its Business 2.0 magazine on Tuesday designed to marry the once-high-flying dot-com sector with old economy stalwarts. 
The relaunched monthly magazine, Business 2.0, combines Time Inc.'s eCompany magazine with the Business 2.0 publication which AOL Time Warner bought from Future Network Plc in June for $68 million.
The front cover of the August issue of Business 2.0, the first edition of the relaunched magazine, features the heads of old economy companies Enron Corp. , Charles Schwab Corp. and UPS, rather than the dot-com poster children that graced magazines covering the Internet and technology during the dot-com boom of the late 1990s. 
The cover signals the magazine's shift to covering technology issues at all levels in the corporate world. The move comes as a sharp downturn in advertising has caused many publishers to retreat and retool their magazines. 
"The story that once was outside mainstream America corporate life is now inside it," said Ned Desmond, the new magazine's editor at a press briefing here. "It's not about dot-com spin-offs being run by VCs (venture capital funds), but concepts, technology and ideas moving through real companies." 
The shift follows in the footsteps of rival publications, such as Industry Standard and Fast Company, which have also broadened coverage to encompass more of the traditional business world as many of the Internet companies that had graced their covers in recent years have fallen by the wayside. 
Despite the recent dot-com backlash, Huey said there was still interest in the type of content San Francisco-based Business 2.0 will offer. Not all those making technology have gone off to ashrams, he joked. 
"They are trying to figure out how to get back on the horse and get back on the trail," Huey said. 
Time Inc. executives acknowledged that the difficult market has caused many Internet and technology magazines to slim down operations. 
"We are not denying that this is a rough market, but we are doubling down in a rough market," said John Huey, recently appointed editorial director of Time Inc. 
The new magazine is much better positioned than either eCompany, which had been a bi-weekly, or Business 2.0 would have been alone, Huey said. 
"Now we are up there at the top of the category with one or two other books," he added. 
While Time decided to retain the Business 2.0 name because it was better known in the market, Huey said it chose to make the new magazine a monthly. 
"Several (magazines) went bi-weekly to capitalize on the glut of advertising that turned out not to be that long-standing and we didn't want to go there," Huey said. 
Executives said the new magazine has attracted about 85 advertisers, including Banana Republic, Absolut Vodka and WorldCom. Only 10 of those came from the original Business 2.0. 
Fortune President Chris Poleway said the magazine benefits from bundled advertising packages that allow advertisers to buy ad space in all of the publications under Fortune's umbrella. 
Poleway said the purchase of Business 2.0 has accelerated the timeline for profitability and expects the company to make money in one to two years. 
PARENTAL HELP 
Business 2.0 is also benefiting from its relationship with AOL Time Warner Inc's Internet unit. About 20 percent of the magazine's 550,000 subscriptions were generated online-of which half came through AOL, the world's largest Internet service provider. 
The magazine, like other titles under the Time umbrella, will also be promoted through other AOL Time Warner properties such as cable network HBO and Fortune magazine. Time publications, including Business 2.0, will also be working closely with 24-hour news network CNN on business programming.

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


VENEZUELA: Venezuela OKs Petrotrin stake in offshore oil field.

08/07/2001
Reuters English News Service
(C) Reuters Limited 2001.

CARACAS, Aug 7 (Reuters) - Venezuela has given the state-owned Petroleum Company of Trinidad and Tobago, also known as Petrotrin, approval to enter a joint venture to explore an offshore oil field near the maritime border of the South American nation with Trinidad. 
The Official Gazette said Petrotrin would take a 50 percent interest in the Gulf of Paria East block. That stake previously was held by Enron Corp. , the No. 1 U.S. natural gas and electricity marketer. No financial details of the deal were immediately available.
A test well at the block produced 3,000 barrels a day of oil in February. Its Venezuelan operator Inelectra had said it would seek a partner with the financial muscle to help develop the field. 
It was the third oil find from eight oil blocks awarded in Venezuela's 1996 Third Round exploration licensing, when licenses valued at a total of $800 million were granted. 
None of the fields has yet produced a commercially viable discovery. Four blocks will be handed back to state oil company Petroleos de Venezuela, or PDVSA, at the end of this year after disappointing drilling results. 
Enron had originally held a 90 percent stake in the Gulf of Paria East field, with Inelectra holding only 10 percent. The U.S. company reduced its stake last year after disappointing well test results. 
Inelectra has said it plans to invest $174 million in Venezuela between 2001 and 2003, including activites in gas exploration.

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


INDIA: S&P downgrade seen hurting Indian markets briefly.

08/07/2001
Reuters English News Service
(C) Reuters Limited 2001.

BOMBAY, Aug 7 (Reuters) - Standard & Poor's downgrade of India's local currency rating and outlook is bound to adversely hit the currency and stock markets, but traders said they do not expect any sustained bearishness. 
S&P on Tuesday lowered India's long-term local currency sovereign credit rating to BBB-minus from BBB.
It affirmed its BB long-term and single B short-term foreign currency sovereign credit and A-3 short-term local currency sovereign credit ratings on the country. The outlook for both long-term ratings was revised to negative from stable. 
The rating agency said the downgrade reflects unchecked budget deficits and rising domestic indebtedness. 
The announcement came after the rupee and stock markets had closed, but caused a sharp fall in government bonds. 
"There could be a knee-jerk reaction to the move but I don't see the reaction being felt for an extended period and the current levels being so low, a severe fall is unforeseen," said U.R.Bhat, chief investment officer at Jardine Fleming India AMC. The Indian stockmarket, battered by a host of scandals since March, is already one of the worst performers in the region. 
The benchmark 30-stock Bombay Sensitive index has lost over 16 percent since the start of the year. The index ended weak on Tuesday, slipping 0.3 percent to 3,319.67 points. 
The rupee ended Tuesday steady at 47.1125/1200 per dollar, down just one percent since April. 
"There is some element of enquiry among corporate clients. People will wait till tomorrow to take a call on the rupee," said S. Rosha, head of corporate treasury sales at HSBC. 
But most corporates were reluctant to hedge, given the rupee's stability, Rosha said, predicting resistance for the dollar at levels around 47.20. 
TREND REVERSAL 
The rupee is convertible only on the current account and the central bank often intervenes through state-run banks to check sharp movements. 
It has been helped this year by heavy foreign investment, both direct and portfolio, which has boosted foreign currency reserves to record highs. 
Foreign portfolio inflows in the first half of 2001 totalled more than $2.5 billion compared with $1.56 billion through the whole of 2000. 
And a reversal in that trend is what worries currency and stock market traders the most. 
"The move could hit investment in the country, both foreign direct investment and domestic investment," said Ajit Ranade, chief economist at ABN AMRO Bank. 
"Local companies planning to raise funds from abroad will definitely feel the pinch," he said. 
K.Ramachandran, head of research at Tata TD Waterhouse, differed. "Portfolio investment flows are unlikely to be affected since foreign funds have different yardsticks of measuring risk," he said. 
S&P's downgrade follows the lowering of the country's rating outlook by Fitch in June. Fitch cited similar worries. 
Rival rating agency Moody's Investors Services told Reuters earlier this month it was not reviewing India's rating or outlook, but expressed concern over slippages in reforms. 
Moody's currently has a Ba2 rating on India with a positive outlook. The rating is two notches below investment grade. 
India's credibility with foreign investors is already under a cloud after a bitter dispute between energy giant Enron Corp and local utility Maharashtra State Electricity Board over high tariffs and payment defaults. 
Analysts say the country's attempt to resolve the Enron dispute is a test case of its ability to attract more foreign investments. The $2.9 billion project is the largest single direct investment in the country. 
FISCAL DEFICIT OVERSHOOT 
Government bonds yields rose nearly 10 basis points after the news, and dealers said any weakness in the rupee will further dampen the current liquidity-led rally. 
Traders have already discounted an overshoot in the federal fiscal deficit, targeted at 4.7 percent of GDP. 
S&P said its outlook revision reflects rising concern that public finances might worsen further in the years to come. It said recent scandals have harmed the government's ability to implement "encouraging" measures announced in its last budget." 
The country has been struggling with a sharp slowdown in economic growth. GDP growth slowed to an estimated 5.2 percent last year (2000/01-April/March) from the previous year's 6.4. 
(additional reporting by Umesh Desai).

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

Enron unit Azurix to sell Argentina ops to Bouygues' Saur - report

08/07/2001
AFX News
(c) 2001 by AFP-Extel News Ltd

BUENOS AIRES (AFX) - Enron Corp will sell its Azurix Buenos Aires SA and Obras Sanitarias de Mendoza units to Bouygues unit Saur, financial daily Buenos Aires Economico reported without naming sources. 
After completion of the deal, Saur will have some 8 mln clients in the country, the report said.
The disposal by Enron of its water operations in the country is part of the company's wider policy of reducing its operations in Argentina and intensifying them in Brazil, BAE said. 
jmp/jms For more information and to contact AFX: www.afxnews.com and www.afxpress.com

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

Ziff Davis SMART BUSINESS Honors the Top 50 U.S. Companies That Are Using the Internet to Grow Their Business

08/07/2001
PR Newswire
(Copyright (c) 2001, PR Newswire)

Smart Business 50 Stock Index Outperforms the S&P 500 Index and Nasdaq 
NEW YORK, Aug. 7 /PRNewswire/ -- Ziff Davis SMART BUSINESS, the magazine for senior managers using technology and business services to grow their companies, announced today its second annual Smart Business 50. The Smart Business 50 honors the top 50 U.S. companies that have done the best job of using the Internet to enhance and expand their existing business. The Smart Business 50 appears in the September 2001 issue of Ziff Davis SMART BUSINESS, which is on newsstands August 14 and online now at http://www.smartbusinessmag.com.
(Photo: http://www.newscom.com/cgi-bin/prnh/20010807/NYTU055 ) 
The Smart Business 50 includes public and private companies, government agencies, and other organizations that existed before the commercialization of the World Wide Web. In forming the list, the editors of Ziff Davis SMART BUSINESS considered the Internet's contribution to companies in such areas as sales growth and profitability, cost savings, expansion into new business areas, effectiveness in heading off competitors, faster delivery of products, improved market share and brand recognition, as well as boosting of customer and employee satisfaction. 
"We looked at how the companies are using the Internet to do business with suppliers, customers, and partners -- and within their own walls," said Wendy Taylor, editor of Ziff Davis SMART BUSINESS. "We learned enough about what works for online business in 2001 that we've highlighted 10 of the company stories as lessons." 
The list includes some of the world's leading companies and organizations: Army & Air Force Exchange Service, Avon, Barnes & Noble, Boeing, Burlington Northern Santa Fe, CVS, Costco, Dell, Dow Jones, Enron, FedEx, General Electric, IBM, Intel, Hewlett-Packard, Kmart, Kaplan, Lands' End, Major League Baseball, Neiman Marcus, Office Depot, Spiegel, Staples, UPS, and the U.S. Mint. 
The Smart Business 50 rankings have also proven to be an industry benchmark on financial performance. A Ziff Davis SMART BUSINESS stock index that includes the public companies from last year's Smart Business 50 has not only outperformed all other Internet company stock indices, but has also outperformed the Standard & Poor's 500 index, which serves as the benchmark for the overall stock market. 
About the Smart Business 50 
The Smart Business 50 is an annual ranking of the U.S. companies that have done the best job of incorporating the Internet into their business. 
About Ziff Davis SMART BUSINESS 
Ziff Davis SMART BUSINESS is an award-winning magazine that delivers information to senior business managers who understand that integrating technology into core business functions is key to growth. The monthly publication presents in-depth case studies and return-on-investment analysis on the topics of technology and business services. It provides more than 800,000 paid subscribers with a hands-on road map to drive business objectives with technology solutions. 
About Ziff Davis Media Inc. 
Ziff Davis Media Inc. (http://www.ziffdavis.com) is the leading information authority for buying, using and experiencing technology and the Internet. It is the largest technology and Internet magazine publisher and the sixth largest magazine publisher in the United States. The company is also at the forefront in creating a new generation of business and consumer media that educate, entertain and empower people. In the U.S., Ziff Davis Media publishes 13 industry-leading business and consumer publications: PC Magazine, Ziff Davis SMART BUSINESS, eWEEK, Interactive Week, Smart Partner, The Net Economy, CIO Insight, Yahoo! Internet Life, Expedia Travels, Electronic Gaming Monthly, Official U.S. PlayStation Magazine, Computer Gaming World and Expert Gamer. Through a joint venture with International Data Group (IDG), the company also publishes Macworld. Other Ziff Davis Media business units include Ziff Davis Internet, a developer of innovative web and other interactive media including ExtremeTech (http://www.extremetech.com) and PCMag.com; Ziff Davis Custom Media, which provides custom and contract media solutions within the technology industry; and eTesting Labs, which provides state-of-the-art internet and technology testing. The company also produces research, conferences, seminars and Webcasts. 
MAKE YOUR OPINION COUNT - Click Here 
http://tbutton.prnewswire.com/prn/11690X86561232


/CONTACT: Randy Zane, +1-212-503-3535, randy_zane@ziffdavis.com; or Amy Kerrigan, +1-212-503-3534, amy_kerrigan@ziffdavis.com, both of Ziff Davis Media Inc./ 10:01 EDT 
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

PGE Joins Other Western Utilities to Oppose FERC Actions

08/07/2001
Business Wire
(Copyright (c) 2001, Business Wire)

PORTLAND, Ore.--(BUSINESS WIRE)--Aug. 7, 2001--Portland General Electric (PGE) has joined together with other Western utilities to protest recent actions by the Federal Energy Regulatory Commission (FERC) to create price controls on wholesale power sales in the West. 
FERC orders issued June 19 and July 25 attempt to stabilize the Western energy marketplace. This coalition of utilities has concluded, however, that FERC's actions will have unintended, yet harmful consequences for Western utilities and consumers. Left unchanged, FERC's order may create higher prices for some utilities' retail customers and could result in power supply shortages in many areas of the West.
"We believe FERC has changed the rules in the middle of the game," said Pamela Lesh, vice president of Public Policy and Regulatory Affairs at PGE. "FERC did not create a proper transition plan for those market participants who took prudent steps to plan ahead in accordance with the old rules." 
PGE believes the impacts from FERC's recent actions, which may prove harmful to Northwest consumers and utilities, can be minimized or reversed if the federal agency takes several corrective measures, including: 

-- FERC should base a price mitigation plan on prices in all 
affected states, not just California(a). While PGE does not 
support price caps in general, at the very least, the company 
believes FERC should set the cap on the highest cost 
generator, and highest cost fuel, in the 11 Western states. 
Another option would be to establish a proxy of $150 per 
megawatt-hour. 

-- All market sellers, whether generators, utilities, or 
marketers, should be allowed to justify their bids based on 
their costs. Currently, it's a one-price-fits-all formula that 
doesn't account for costs due to certain circumstances, except 
for generators. 

-- FERC should exempt demand reduction programs from the price 
mitigation cap. These programs compensate businesses for 
reducing usage during times of high prices. PGE created an 
industry-leading program to reduce demand, but price caps 
create uncertainty for the future of this effort. 

-- Out-of-state sellers should receive transmission costs and 
losses on top of the capped price. Whenever an entity 
transmits power over a long distance, a certain percentage of 
power is lost to the transmission process. Additionally, as 
that power crosses the jurisdictions of other utilities, there 
is a fee, or toll, charged for the usage of those lines. 
FERC's existing methodology does not account for these fees 
and losses. 

The utilities that have joined together in this coalition include PGE in Oregon, Puget Sound Energy in the state of Washington, and Nevada's Sierra Pacific Resources. The coalition members are committed to working with their respective Congressional delegations, governors, other state leaders, and public utility commissions, to assist FERC in developing solutions that are both more fair and more likely to achieve reliable power supplies this coming year. 
Portland General Electric (PGE) is a wholly-owned subsidiary of Enron Corp., one of the world's leading integrated electricity and natural gas companies. PGE is the single largest distributor of Oregon's electrical energy needs in one of the fastest growing economies in the nation. As a fully integrated utility, PGE serves more than 730,000 residential, commercial and industrial customers in northwest Oregon. PGE's Internet address is www.portlandgeneral.com. 

(a) Through the price mitigation order, wholesale prices are now geared to the cost of power production in California. Specifically, the cap is based on the highest-cost natural gas-fired plant in the state, whose power is needed when reserves fall below seven percent and trigger a "Stage 1" supply emergency. When reserves return above seven percent, the price cap is set at 85 percent of the highest hourly price set during the most recent Stage 1 emergency.


CONTACT: PGE Scott Simms, 503/464-7342 or Kregg Arntson, 503/464-7695 
10:00 EDT AUGUST 7, 2001 
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	


Four Utilities Seek Changes to California Price Caps (Update1)
2001-08-07 16:20 (New York)

Four Utilities Seek Changes to California Price Caps (Update1)

     (Closes stock prices in last paragraph.)

     Portland, Oregon, Aug. 7 (Bloomberg) -- Enron Corp., Puget
Energy Inc. and Sierra Pacific Resources, owners of four utilities
that sell power to California, want U.S. regulators to restructure
price caps placed on the state's electricity market.
     The rules set by the Federal Energy Regulatory Commission in
May often require the utilities to sell their excess electricity
at a loss, the companies said in statements. FERC set prices based
on costs of the most expensive generators in California, and in
June broadened rules to include 10 other Western states.
     Enron's Portland General Electric, Puget Sound Energy, Nevada
Power and Sierra Pacific Power want FERC to change the rules so
that the price-setting formula includes costs of all sellers, not
just generators in California.
     ``Now, Californians can obtain power at the last minute at an
artificially low price while states that have had the foresight to
purchase more secure, longer-term power are left with higher
bills,'' Walt Higgins, chairman, president and chief executive
officer of Sierra Pacific Resources, said in a statement.
     The utilities say they sometimes sell at a loss to California
because the price they pay for power is higher than the cost of
the most expensive power plant in the state.
     ``The price controls were designed to help California and
we're now seeing that that's going to cost neighboring states,''
said Grant Ringel, Puget Sound spokesman.
     Oregon needs new power plants to meet rising demand and has
lost 1,300 megawatts of planned power plants since June because of
developer concerns about price caps, Ringel said. One megawatt is
enough to light 750 to 1000 average U.S. homes.
     California officials had demanded the price caps after the
state's two largest utilities, PG&E Corp.'s Pacific Gas & Electric
and Edison International's Southern California Edison, racked up
more than $14 billion in power-buying losses.
     The coalition of western utilities hopes to bring others on
board to help foster federal rules that account for differences in
each of the states, Ringel said.
     Houston-based Enron's shares fell 90 cents to $43.60.
Bellevue, Washington-based Puget Energy rose 32 cents to $24.17,
and Reno, Nevada-based Sierra Pacific fell 44 cents to $15.07.



American Water to Pay $150 Mln for Enron Water Unit (Update2)
2001-08-07 16:37 (New York)

American Water to Pay $150 Mln for Enron Water Unit (Update2)

     (Updates with closing share prices.)

     Voorhees, New Jersey, Aug. 7 (Bloomberg) -- American Water
Works Inc., the largest publicly traded U.S. water utility, agreed
to pay $149.8 million for Azurix North America, a unit of No. 1
energy trader Enron Corp.
     The price includes $141.5 million in cash and $8.3 million in
debt, American Water said in a filing with the U.S. Securities and
Exchange Commission. The company, which announced the purchase
yesterday, will finance the acquisition with debt, spokesman Jim
Harrison said. The transaction will probably close within 90 days,
he said.
     French news agency Agence France Presse reported that Enron
also is negotiating to sell Azurix's Argentine assets to French
industrial group Bouygues SA. Enron spokesman John Ambler called
the report ``speculation,'' but said Enron will sell more Azurix
assets.
     ``We're having ongoing asset sales over a period of time,''
Ambler said.
     American Water's acquisition will help it expand in the
southeastern and northwestern U.S. and in three Canadian
provinces, and will boost earnings per share in its first full
year, the company said.
     Enron, which controls two-thirds of Azurix Corp., of which
Azurix North America is a unit, took Azurix private in March for
$327.5 million. The move, 21 months after the affiliate sold
shares to the public, was made when it became clear Azurix was
having trouble with its strategy of buying up water companies and
winning large water projects.
     Azurix provides water and wastewater services, including
operations and maintenance, engineering and other services. The
North American unit has annual revenue of about $157 million and
serves about 2 million people.
     American Water Works, based in Voorhees, New Jersey, serves
about 10 million people in the U.S. Its shares rose 54 cents to
$32.95. Enron fell 90 cents to $43.60.

NewPower Sees 2001 Sales Below Forecast, Stock Falls (Update5)
2001-08-07 16:07 (New York)

NewPower Sees 2001 Sales Below Forecast, Stock Falls (Update5)

     (Updates with closing share values in first, second and last
paragraphs.)

     Purchase, New York, Aug. 7 (Bloomberg) -- Shares of NewPower
Holdings Inc. fell 31 percent after the venture, formed by Enron
Corp. to compete with traditional gas and electric utilities, said
revenue this year will be lower than projected.
     Shares of NewPower fell $2.27 to $5.08 on trading of
1.22 million shares, more than six times the three-month daily
average. The decline was the third-biggest among U.S. stocks. The
stock has fallen 76 percent since debuting in October.
     Revenue in 2001 will be $420 million to $440 million, down
from $530 million to $540 million forecast previously, Chief
Executive Eugene Lockhart said. Revenue this quarter probably will
be $60 million to $65 million. The company expects to have
1 million customers by the end of the year, below the 1.2 million
projected previously.
     Revenue fell partly because of delays in Texas's plan to open
its electricity market to competition. Milder-than-expected
weather and a higher power-grid fee in the market encompassing
Pennsylvania, New Jersey and Maryland also hurt business, Lockhart
said on a conference call with analysts and investors.
     The Purchase, New York-based company was formed in late 1999
to sell power and natural gas to homes and small businesses in
deregulated markets.
     NewPower plans to trim costs by marketing directly to
possible customers in states such as Texas, Virginia and
Massachusetts, instead of paying to purchase groups of customers
from other companies, Lockhart said. NewPower doesn't plan to cut
its workforce to reduce costs, spokeswoman Gael Doar said.
     New Power had a second-quarter loss of $55.6 million, or 96
cents a share. Revenue was $64.6 million, less than the $70
million to $75 million the company had expected.
     Shares of Houston-based Enron, the biggest energy trader,
fell 90 cents to $43.60. They have fallen 48 percent this year.