USA: INTERVIEW-Enron impatient at power deregulation pace.
Reuters English News Service, 10/12/01
UK: Enron's European electricity trading volumes soar.
Reuters English News Service, 10/12/01

Northwest Natural Picks Merrill, CSFB to Arrange $2.1 Bln Loan
Bloomberg, 10/12/01

UK: INTERVIEW-Metals screen trade set to evolve - Spectron.
Reuters English News Service, 10/12/01
USA: Citizen wins two Petroecuador oil contracts.
Reuters English News Service, 10/12/01

British Court Blocks Indian State's Enron Challenge, AP Says
Bloomberg, 10/12/01



USA: INTERVIEW-Enron impatient at power deregulation pace.
By Chris Baltimore

10/12/2001
Reuters English News Service
(C) Reuters Limited 2001.

WASHINGTON, Oct 12 (Reuters) - Nearly 10 years after Congress passed the Energy Policy Act in 1992 to promote competition in the nation's $220 billion wholesale power market, Enron Corp is growing impatient. 
From the U.S. Supreme Court to Congress and the Federal Energy Regulatory Commission, the Houston-based energy and commodities trading giant has spread its open-market gospel.
"Five years ago we clearly thought we would be much farther along than we are now," Rick Shapiro, Enron's managing director of government affairs, told Reuters in an interview on Friday. 
"Finishing the job of making wholesale markets work across the U.S. is our number one objective," Shapiro said. 
Enron has a large stake in the regulatory debate. With wide-ranging commodity positions from lumber to pulp to bandwidth, oil and natural gas, its strategy hinges on the ability to transfer those products from buyer to seller more cheaply and quickly than its competitors. 
For the power market, that means Enron needs easy access to electric transmission lines, the interstate highway system that allows it to wheel supplies between regions and capitalize on short-term price imbalances. 
UTILITIES BLOCK COMPETITION 
Enron's big problem? Traditional utilities own transmission lines and have shaped the rules to block new entrants and favor their own generation, Shapiro said. 
"Vertically integrated monopolies have been very effective in delaying wholesale competition across the board," he said. 
In its pleas to Supreme Court justices and regulators, Enron has tried to empower federal regulators to force utilities to open their wires to competition. 
The Supreme Court last week heard oral arguments in a case that could be a watershed for the U.S. power industry and decide whether FERC has the right to drive competition on state transmission networks. 
In a classic battle of state versus federal jurisdictional turf, Enron wants the court to give FERC more authority to compel states to open their transmission grids to competitors. 
Meanwhile, New York has brought a companion case that says FERC has gone too far and the court should give control of transmission wires back to the states. 
"This is an example of an agency that has overstepped its bounds," Lawrence Malone, general counsel for the New York State Public Service Commission, said at the oral argument. 
New York wants the court to revoke FERC's authority to regulate retail sales, contending electricity involved in such sales stays within state boundaries and is not subject to federal legislation. 
"I think a victory for New York would be absolutely disastrous for consumers across the country," Shapiro said. 
"FERC has jurisdiction. All they need to do is exercise it," Shapiro said, echoing Enron lawyers' case to Supreme Court justices that existing laws give FERC the power to do Enron's will. 
Enron does not see a recent congressional push for energy legislation as key to its plans, Shapiro said. "FERC is doing its job on the electricity front. I'm not sure that legislation is required on that front." 
FERC SHOWS PROMISING SIGNS 
With new Chairman Pat Wood at the helm, FERC is moving in the right direction to drive competition, Shapiro said. "It's early in his tenure," Shapiro said of Wood. "Many of the signs are promising." 
Wood has made so-called regional transmission organizations a high priority and set aggressive agency rules to drive utilities to join them. 
RTOs establish common rules that allow utilities to smoothly trade bulk electricity across the borders of their own local transmission systems. Enron sees RTOs as a positive step toward competition. 
In what he called a "carrots and sticks" approach, Wood signaled in late September that utilities must either join RTOs or face losing the right to sell power in wholesale markets. 
FERC will hold a week-long meeting on RTOs beginning Monday. 
Enron is skeptical that carrots are useful, and is a bigger fan of sticks, Shapiro said. 
Utilities have "gotten quite fat over the last nine or 10 years," Shapiro said, and will shrug off FERC's incentives. "I'm not sure there are a sufficient number of carrots in the world right now to incentivize these companies," Shapiro said.

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

UK: Enron's European electricity trading volumes soar.

10/12/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, Oct 12 (Reuters) - U.S. energy group Enron on Friday said it traded five times as much wholesale electricity in continental Europe during the first half of this year as in the same period last year. 
Continental power trading director Gregor Baeumerich told Reuters the company traded 523 terawatt hours in the first half - roughly equivalent to annual German power demand - up from 93 terawatt hours in the first half of 2000.
"On average we are now doing around 200 deals a day with about 300 counterparties," he said. 
Liquidity in Germany, Europe's biggest power market, had risen partly due to more trading by municipal utilities, he said. 
Baeumerich said volumes in the French power market had risen sharply in recent weeks after Electricite de France last month auctioned off access to 1,200 megawatts of it generation capacity. 
He said annual contracts for physical baseload power for 2002 were trading daily. Up to 30 companies participated in the French market. 
"Utilities from across the continent are trading the French market," said Baeumerich. 
Much of the trading took place on France's borders with neighbouring countries, he said.

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

Northwest Natural Picks Merrill, CSFB to Arrange $2.1 Bln Loan
2001-10-12 13:05 (New York)

Northwest Natural Picks Merrill, CSFB to Arrange $2.1 Bln Loan

     New York, Oct. 12 (Bloomberg) -- Northwest Natural Gas Co.
picked Merrill Lynch & Co. and Credit Suisse First Boston to
arrange a $2.1 billion loan to help finance its acquisition of
Portland General Electric, said bankers familiar with the loan.

     The high-yield loan, the largest announced since the
terrorist attacks of Sept. 11, will include $450 million of
working capital. Another $450 million will be replaced by a junk
bond of the same size, the bankers said.

     Merrill, which advised Northwest on its acquisition, will
manage the bond sale. Credit Suisse advised Enron Corp. on the
sale of Portland for $2.9 billion in cash, stock and assumed debt
to Northwest.

     Portland, Oregon-based Northwest also plans to issue $150
million of common equity once the acquisition is closed, according
to Chief Executive Richard Reiten. The company expects a nine-
month to 12-month regulatory approval period, Reiten said.

     Northwest is forming a holding company to take on the debt
needed to finance the transaction. Standard & Poor's said that the
debt at the holding company is expected to be rated below
investment grade. The utilities -- Northwest Natural and Portland
General -- are expected to keep their investment-grade ratings,
S&P said.



UK: INTERVIEW-Metals screen trade set to evolve - Spectron.
By Andy Blamey

10/12/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, Oct 12 (Reuters) - Electronic trading of base metals futures has established a firm foothold in the market but the nature of online trading platforms looks set to evolve further, says Gavin Gross, head of LME metals at Spectron Futures Ltd. 
UK-based energy and commodities broker Spectron's electronic platform for the trading of London Metal Exchange (LME) contracts has become required viewing for traders alongside the LME's own system LME Select and the Enron Group's EnronOnline.
"I think we've proved that people will trade LME derivatives contracts online, because there are some great advantages to doing so," Gross told Reuters in a telephone interview. 
"And unlike the physical markets, where things haven't really taken off online, all three platforms are pretty much indispensable to the market." 
Both Spectron and LME Select are neutral platforms in which Category 1 and Category 2 LME members trade with each other, while EnronOnline is open to a wider membership but has Enron itself as the sole counterparty in each transaction. 
This leaves a gap in the market for a multi-party trading system open to industry participants beyond the immediate trading community, Gross suggested. 
"I think the clear trend for metals derivatives trading for the future is for open platforms which would allow dealers and clients in the market to interact with each other online," he said. 
Direct access for clients to an electronic trading environment could mean changes in the role of the broker, he said. 
"Clients will have the advantage of more control, more visibility and more transparency in what they do. However, they'll have to pay for services," Gross said. 
"You could see a situation where dealers specialise in different areas - certain dealers would provide credit functions, certain institutions would provide clearing, others would provide execution and certain companies would provide market-making." 
DIFFICULT CONDITIONS 
Difficult market conditions are already forcing metals traders to rethink their activities; this week alone has seen N.M. Rothschild & Sons exit base metals trading and both Bank of Nova Scotia and Enron looking to scale back. 
"On the LME now you've got low volumes, falling volatilities, falling prices and we're in the grips of a bear market. It's very, very poor for business in general," Gross said. 
"There are too many dealers around chasing a shrinking amount of business...Each company is going to have to look very carefully at their business and their staffing levels." 
Spectron has not been immune from declining volumes. 
"Our volumes for the first 12 months of operation were fantastic, way beyond what we had expected. However, our volumes have fallen in the recent quarter," Gross said. 
"That's due to two factors: first, the overall market activity is lower, and second LME Select has managed to attract some of the business that we would previously have had 100 percent of." 
The company is now looking at ways to further develop its trading platform. 
"We're beginning to investigate ways to add certain features and do things differently. That might involve creating an alternative platform where clients could access prices and thereby widen the service," Gross said. 
But, he stressed, "we have to keep the interests of our dealer clients foremost." 
UNCERTAINTY 
In the current environment, the LME's refusal to throw its weight behind either open-outcry floor trade or its new screen system - the exchange has taken pains not to express any preference and to "allow the market to decide" - may prove to be counterproductive, Gross said. 
"By having two systems running side by side ... the exchange is almost moving in two totally different directions," he said. 
"There's a feeling that the ring is doomed, which doesn't do anything to encourage its use, while the reluctance to fully back electronic trading means that you're still only seeing a trickle of business going through Select in terms of overall volumes." 
While preferences vary in different sectors of the market, the current uncertainty is helping no-one, he said: 
"Metals traders just want to trade. They just want to know with some kind of certainty how the market will be structured in future so they can structure their business to support that and make money."

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

USA: Citizen wins two Petroecuador oil contracts.

10/12/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW YORK, Oct 12 (Reuters) - Oil firm Citizen won the remaining two of Ecuador's crude oil contracts by matching the price differential of $6.97 below West Texas Intermediate (WTI) set by another bider, Petroecuador said Friday. 
Petroecuador awarded U.S.-based Citizen two contracts, each of 12,000 barrels per day (bpd), for three months after matching Coastal Petroleum's bid of $6.97 under WTI, with a floor price for WTI at $20 per barrel.
Petroecuador last week retendered eight three-month crude lots, each for 12,000 bpd, following a price dispute with former contract holders that led Ecuador's state oil company to break the deals. 
Enron Corp. and Rio Energy were awarded earlier this week one 12,000 bpd contract each, while Anglo Energy and Coastal each will take two contracts. 
The new contract holders will start loading their first cargo during the first half of November, a Petroecuador official said. 
Petroecuador will set the price of Ecuador's crude for December and January based on market values.

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


British Court Blocks Indian State's Enron Challenge, AP Says
2001-10-12 12:25 (New York)


     Mumbai, Oct. 12 (Bloomberg) -- Enron Corp.'s bid for
international arbitration over its Dabhol Power Co. project to
recover claims of as much as $5 billion can't be delayed with
legal action by an Indian state government, a Commercial Court in
London ruled, the Associated Press reported.

     The injunction prevents the Indian state of Maharashtra from
initiating legal action that would delay arbitration of disputes
over the Houston-based power company's project, AP said, citing
Enron.

     The injunction obtained Wednesday is separate from a case
pending before the state-owned Maharashtra Regulatory Commission,
AP said. The Maharashtra State Electricity Board has said it can't
afford the energy prices negotiated seven years ago.

     An Indian court has ordered a stay until a decision is
reached on whether the commission has jurisdiction in the matter.
Enron has a 65 percent stake in 2,184-megawatt power project,
India's biggest foreign investment, AP said. The company wants to
pull out of India and recover its investment and that of its
partners, General Electric Co. and closely held Bechtel Group.