Performance Reviews: Perilous Curves Ahead Grading employees via forced 
rankings is a valuable management tool, say many companies. A slew of 
employees beg to differ.
Fortune Magazine, 05/28/01

UAE: Enron to pull out of Dolphin project
Middle East Economic Digest, 05/18/01

Bush Energy Text
Associated Press Newswires, 05/17/01

Williams Capital Group's Ellinghaus on Energy Policy: Comment
Bloomberg, 05/17/01

Enron's Maurer on Brazil's Power Regulation Problems: Comment
Bloomberg, 05/17/01

Enron to Provide Gas Prices to NGX, Drops Lawsuit (Update1)
Bloomberg, 05/17/01

Venezuela to Award 11 Gas Tracts June 28-29, First Since 1975
Bloomberg, 05/17/01

USA: U.S. green groups pummel Bush energy plan.
Reuters English News Service, 05/17/01

INDIA: Enron India unit lenders put off cancellation vote to Friday.
Reuters English News Service, 05/17/01

UK: Global Coal website starts e-trading coal.
Reuters English News Service, 05/17/01

CHINA: India tells Enron to renegotiate Dabhol contract.
Reuters English News Service, 05/17/01

Common Cause Statement On Cheney Energy Panel's Report; Recommendations Seen 
As Payback For Big Time Donors
U.S. Newswire, 05/17/01



FORTUNE Advisor/On The Job
Performance Reviews: Perilous Curves Ahead Grading employees via forced 
rankings is a valuable management tool, say many companies. A slew of 
employees beg to differ.
Matthew Boyle

05/28/2001
Fortune Magazine
Time Inc.
187+
(Copyright 2001)

Sanaa Taraman taught at the University of Michigan at Dearborn shortly after 
getting her Ph.D. in industrial engineering, so she knows all about grading 
on a curve. But she never thought she'd be the victim of one. A 25-year Ford 
veteran and the mother of three, Taraman was told last December that she had 
received the rank of C, the lowest grade under Ford's new 
performance-evaluation system. Employees who get a C are not eligible for 
bonuses that year. Two C's in a row are grounds for dismissal. Those in the 
double-C group will "not necessarily" be fired, says Francine Romine, a Ford 
spokesperson. 
Taraman, 54, a senior technical specialist, says she had never before 
received a poor performance evaluation. She claims that her manager signed 
off on a B ranking after she successfully completed a demanding 
assembly-plant project, but that the ranking mysteriously changed to a C a 
week later. Now on medical leave to treat depression, Taraman joined eight 
other Ford employees in filing a class-action lawsuit in February, alleging 
that the auto giant's evaluation system discriminates against older workers. 
"I felt I was a scapegoat," she says. Romine maintains that Ford's ranking 
system "is fair and nondiscriminatory."
In companies across the country, from General Electric to Hewlett- Packard, 
such grading systems--in which all employees are ranked against one another 
and grades are distributed along some sort of bell curve--are creating a 
firestorm of controversy. In the past 15 months employees have filed 
class-action suits against Microsoft and Conoco as well as Ford, claiming 
that the companies discriminate in assigning grades. In each case, a 
different group of disaffected employees is bringing the charges: older 
workers at Ford, blacks and women at Microsoft, U.S. citizens at Conoco. 
Forced ranking systems, also known as forced distribution or "rank and yank," 
have been around for decades. Adherents include several of FORTUNE's Most 
Admired Companies, like Cisco Systems, Intel, and GE (see sidebar). But 
thanks to the slowing economy and an increased focus on pay for performance, 
more companies--a quarter of the FORTUNE 500, by one estimate--have 
instituted such forced rankings or gotten tougher with their existing 
systems. For example, Enron recently expanded its ranking system to cover 
most U.S. employees, and last fall Hewlett-Packard decreed that a full 5% of 
its work force would receive HP's lowest grade, rather than the fuzzy 0 to 5% 
of years past. 
Proponents of forced rankings argue that they facilitate budgeting and guard 
against spineless managers who are too afraid to jettison poor performers. 
"Managers want to live in a Lake Wobegon, where all the children are above 
average, but that's not the truth," says Dick Grote, an HR consultant who has 
designed ranking systems for GE and Texas Instruments. Forced rankings, the 
thinking goes, force managers to be honest with workers about how they're 
doing. 
But critics say they compel managers to penalize a good but not great 
employee who's part of a superstar team. Conversely, a mediocre employee on a 
struggling unit can come out looking great. "In many cases, the lowest 
performer might not be that much lower than the highest," says Paul Spector, 
a professor of industrial psychology at the University of South Florida. 
Most companies guard against this problem by refraining from rigidly applying 
the distribution to smaller teams--but that means the spread has to be made 
up somewhere else. The result: Different managers spend hours haggling with 
one another to meet the overall distribution requirements. This horse-trading 
process can be frustrating and time-consuming, one Microsoft middle manager 
says. While Bill Zolna, a Microsoft spokesperson, denies that the company 
requires managers to assign a certain percentage of employees to each level, 
the middle manager says that there is unspoken pressure to do so. 
Another area of contention is the ranking criteria. In a manufacturing-based 
economy, it was easy to figure out who was up to snuff: Just see whether Joe 
is pumping out (or selling) more widgets than Bob. But today organizations 
use a slew of fuzzy qualitative criteria to evaluate employees. And while 
there's no doubt that teamwork and communication skills are vital, they are 
tough to gauge. After all, one manager's team player is another's sycophant. 
Enron's ranking criteria are "very subjective," admits Mark Palmer, a company 
spokesman, adding, "There aren't easy labels for what type of person someone 
is." 
There's also the danger that forced rankings can become a crutch for poor 
management. "Good managers should have the capability to make these difficult 
decisions without a system forcing it upon them," argues Chris Michalak, who 
designs such systems at Towers Perrin. 
Of course, one reason employees are up in arms about forced rankings is that 
they suspect--often correctly--that the rankings are a way for companies to 
more easily rationalize firings. In his latest message to GE shareholders, 
CEO Jack Welch said, "Not removing that bottom 10%...is not only a management 
failure but false kindness as well." This year Sun Microsystems will use a 
forced-ranking system to identify its worst-performing 10%, who will be given 
90 days to shape up, find another job inside Sun, or ship out. 
So is Sanaa Taraman's situation an anomaly or a taste of things to come? The 
latter, according to New York City employment lawyer Lorraine Ahlers-Mack. 
"There's going to be a lot of litigation surrounding this issue," she warns. 
Managers had better get ready. 
FEEDBACK: onthejob@fortunemail.com 
[BOX] 
PLUS: FAT CEO PENSIONS | NEW OUTSOURCING DANGERS | INTELLECTUAL CAPITAL 
REVISITED [BOX] Making the Grade ENRON Divides employees into six categories: 
superior (5% of employees), excellent (30%), strong (30%), satisfactory 
(20%), needs improvement, and issues (combined, 15%). FORD Last year gave 10% 
of employees A's, 80% B's, and 10% C's (the lowest grade); will give only 5% 
C's this year. GENERAL ELECTRIC Divides employees into top (20%), middle 
(80%), and bottom (10%) categories. HEWLETT-PACKARD Uses a 1-to-5 scale, with 
15% of employees getting 5's (the top grade) and 5% getting 1's; the 
percentage of 2's, 3's, and 4's varies. MICROSOFT Ranks employees from 1 to 
5; most fall between 2.5 and 4.5.


COLOR PHOTO: PHOTOGRAPH BY JOE VAUGHN Sanaa Taraman recently charged Ford 
with discriminatory grading. 
Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


UAE: Enron to pull out of Dolphin project

05/18/2001
Middle East Economic Digest
Copyright (C) 2001 Middle East Economic Digest; Source: World Reporter (TM)

The US' Enron Corporation is to relinquish its stake in Dolphin Energy (DEL), 
the joint venture company formed to develop the Dolphin gas project. DEL is a 
Jersey-registered company, 51 per cent owned by the Abu Dhabi-based UAE 
Offsets Group (UOG). The remaining 49 per cent is split equally between 
France's TotalFinaElf and Enron. 
In March 2000, the three partners signed a project development agreement 
(PDA), which stated that TotalFinaElf would be responsible for the upstream 
element, which would involve developing a block in Qatar's North field, and 
Enron would be the midstream partner, responsible for building a gas pipeline 
to Abu Dhabi, Dubai and Oman, gas marketing and project management (MEED 
10:3:00).
Industry sources say that Enron's plan to give up its stake in DEL is part of 
a new business model developed by the company. The sources suggest that there 
is another factor affecting Enron's decision to pull out of DEL. "The profit 
margin for Enron would be low. At present, the Dolphin project is being 
developed primarily as an upstream initiative," says one. 
The fate of Enron's stake in DEL remains unclear. UOG has not been 
forthcoming with explanations, but an official statement is expected by the 
end of May. Some sources suggest UOG will take over the stake of Enron in 
DEL, but the possibility remains that another company might be invited into 
the joint venture. "There is talk of new partners," says a TotalFinaElf 
official. "But whatever happens, we are staying." Enron officials declined to 
comment.

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


Bush Energy Text
By The Associated Press

05/17/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

Text of President Bush's speech unveiling his energy policy in St. Paul, 
Minn. on Thursday, as transcribed by eMediaMillWorks, Inc. 
BUSH: Thank you for that warm welcome. First, I want to thank my friend Norm 
Coleman. What a great leader he is for St. Paul.
He's a very good friend. I think it's very important for you all to know that 
when Norm calls over there to Washington, I'll answer the phone. 
Traveling with me today are two of my Cabinet officers. First, from the state 
of Michigan, the Energy Secretary Spence Abraham. 
And the EPA Administrator Christie Todd Whitman. 
I appreciate John's invitation to be here and I want to thank the Capital 
City Partnership for giving me the chance to come and deliver a major policy 
address to the nation. 
I'm also pleased to be in the home of the mighty Minnesota Twins. 
Their cost per win is astounding. 
It serves as a good example of what frugality can do for the nation. 
But I'm not here to talk about baseball. The Twin Cities are a great place to 
discuss America's energy challenge. Minneapolis-St. Paul grew up as a mighty 
milling and transportation center because of the power of the Mississippi 
River. Your history was built on energy that was abundant and affordable and 
reliable. So too will be this nation's energy future. 
I invite you to think with me about that future. I had an early look at the 
future this morning right here in St. Paul. I toured a plant that harnesses 
the best of new technology to produce energy that is cleaner and more 
efficient and more affordable. 
The plant boils enough water to heat 146 major office buildings in downtown 
St. Paul. Not a bit of energy is wasted, not even the waste. The excess heat 
generated as the water boils is captured and used to create steam, which 
generates still more electricity to power pumps and to deliver heat. 
The plant is a model of energy efficiency. It is also a model of energy 
diversity. It uses conventional fuels like oil and natural gas and coal, and 
renewable fuels like wood chips. And the plant is a model of affordability. 
While other energy prices rise, District Energy has not raised its heating 
and cooling rates in four years. 
We're beginning to see the power of the future, not only in office buildings, 
but also in our homes and our cars. 
This spring the Sustainable Buildings Industry Council showcased a solar 
powered home so advanced that it actually produces more energy than it uses. 
And some Americans are already driving hybrid cars that can convert to 
battery power to reduce emissions and get up to 70 miles a gallon of gas. 
These are our early glimpses of a future in which Americans will meet our 
energy needs in ways that are efficient, clean, convenient and affordable. 
The future is achievable if we make the right choices now. But if we fail to 
act, this great country could face a darker future, a future that is 
unfortunately being previewed in rising prices at the gas pump and rolling 
blackouts in the great state of California. These events are challenging what 
had become a fact of life in America: The routine, everyday expectation that 
when you flick on a light switch, the light will come on. Californians are 
learning, regrettably, that sometimes when you flick on the light switch, the 
light does not come on at any price. 
I'm deeply concerned about the impact of blackouts on the daily lives of the 
good people of the state of California, and my administration is committed to 
helping California. 
We're helping right now by expediting permits for new power production and by 
working as good partners to reduce our electricity at federal facilities, 
especially during the peak periods this summer. 
My administration has developed a sound national plan to help meet our energy 
needs this year and every year. If we fail to act on this plan, energy prices 
will continue to rise. 
For two decades, the share of the average family budget spent on energy 
steadily declined. But since 1998, it has skyrocketed by 25 percent, and 
that's a hardship for every American family. 
If we fail to act, Americans will face more and more widespread blackouts. If 
we fail to act, our country will become more reliant on foreign crude oil, 
putting our national energy security into the hands of foreign nations, some 
of whom who do not share our interests. 
And if we fail to act, our environment will suffer, as government officials 
struggle to prevent blackouts in the only way possible, by calling on more 
polluting emergency backup generators and by running less-efficient old power 
plants too long and too hard. America cannot allow that to be our future, and 
we will not. 
To protect the environment, to meet our growing energy needs, to improve our 
quality of life, America needs an energy plan that faces up to our energy 
challenges and meets them. 
Vice President Cheney and many members of my Cabinet spent months analyzing 
our problems and seeking solutions. The result is a comprehensive series of 
more than 100 recommendations that light the way to a brighter future through 
energy that is abundant and reliable, cleaner and more affordable. 
The plan addresses all three key aspects of the energy equation: demand, 
supply and the means to match them. 
MORE 
First, it reduces demand by promoting innovation and technology to make us 
the world leader in efficiency and conservation. 
Second, it expands and diversifies America's supply of all sources of energy 
- oil and gas, clean coal, solar, wind, biomass, hydropower and other 
renewables, as well as safe and clean nuclear power. 
Third and finally, the report outlines the ways to bring producers and 
consumers together by modernizing the networks of pipes and wires that link 
the power plant to the outlet on the wall. 
Our new energy plan begins with a 21st century focus on conservation. The 
American entrepreneurial system constantly invents ways to do more with less. 
We pack more and more computing power on to a chip. We carry more and more 
messages over a cable and we squeeze more and more power out of a barrel of 
oil or a cubic foot of natural gas. A new refrigerator you buy today, for 
example, uses 65 percent less electricity than one that was made 30 years 
ago. Overall, we use 40 percent less energy to produce new goods and services 
than we did in 1973. But this steady improvement slowed in the 1990s. 
Our energy plan will speed up progress on conservation where it has slowed 
and restart it where it has failed. 
It will underwrite research and development into energy-saving technology. It 
will require manufacturers to build more energy-efficient appliances. We will 
review and remove the obstacles that prevent business from investing in 
energy-efficient technologies like the combined heat and power system I 
toured this morning. 
Conservation does not mean doing without. Thanks to new technology, it can 
mean doing better and smarter and cheaper. 
Innovation helps us all make better choices. Smart electric meters can tell 
homeowners how they're using power and how they might reduce their monthly 
electric bill. Sensors can turn off lights when people leave a room. And 
innovation is bringing us transmission wires that waste less of the 
electricity they carry from plant to home or to office. 
Conservation on a wide scale takes more than good ideas. It takes capital 
investment. Outdated buildings and factories have to be upgraded or replaced 
to consume less and pollute less. 
And here, some well-intentioned regulations have created a catch-22. 
Procedures intended to protect the environment have too often blocked 
environmental progress by discouraging companies from installing newer and 
cleaner equipment. 
Wise regulation and American innovation will make this country the world's 
leader in energy efficiency and conservation in the 21st century. 
Our goal is to use less additional energy to fuel more economic growth, and I 
know we can do so. I also know that conservation is the result of millions of 
good choices made across our land on a daily basis. 
Yet even as we grow more efficient, even as this nation achieves the 
objectives in conservation, we will always require some additional energy to 
power our expanding economy. We learned that from the California experience. 
California has been an impressive conservation leader. It is the second most 
energy efficient state in the union, but California has not built a major new 
power plant in a decade. And not even the most admirable conservation effort 
could keep up with the state's demand for electricity. 
So the second part of our energy plan will be to expand and diversify our 
nation's energy supplies. Diversity is important, not only for energy 
security, but also for national security. 
Over-dependence on any one source of energy, especially a foreign source, 
leaves us vulnerable to price shocks, supply interruptions and, in the worst 
case, blackmail. 
America, today, imports 52 percent of all our oil. If we don't take action, 
those imports will only grow. As long as cars and trucks run on gasoline, we 
will need oil, and we should produce more of it at home. 
New technology makes drilling for oil far more productive, as well as 
environmentally friendly than it was 30 or 40 years ago. 
Here is the result of one study. And I quote, "Improvements over the past 40 
years have dramatically reduced industry's footprint on the fragile tundra, 
minimized waste produced and protected the land for resident and migratory 
wildlife." Those aren't my words. Those are the words of the Department of 
Energy study conducted during my predecessor's administration. 
Advanced new technologies allow entrepreneurs and risk-takers to find oil and 
to extract it in ways that leave nature undisturbed. Where oil is found 
underneath sensitive landscapes, rigs can stand miles away from the oil field 
and tap a reservoir at an angle. 
And Arctic sites like ANWR, we can build roads of ice that literally melt 
away when summer comes and the drilling then stops to protect wildlife. ANWR 
can produce 600,000 barrels of oil a day for the next 40 years. What 
difference does 600,000 barrels a day make? Well, that happens to be exactly 
the amount we import from Saddam Hussein's Iraq. 
We're not just short of oil, we're short of the refineries that turn oil into 
fuel. So while the rest of our economy is functioning at 82 percent of 
capacity, our refineries are gasping at 96 percent of capacity. 
A single accident, a single shutdown can send prices of gasoline and heating 
oil spiraling all over the country. The major reason for dramatic increases 
in gasoline prices today is the lack of refining capacity, and my plan gives 
the needed flexibility and certainty so refiners will make the investments 
necessary to expand supply by increasing capacity. 
And America needs to generate more electricity. The Department of Energy 
estimates that America will need between 1,300 and 1,900 new power plants 
over the next two decades. A high-tech economy is a high electricity 
consumption economy. Even the sleekest laptop needs to plug into an 
electrical outlet from time-to-time. 
More than half of the electricity generated in America today comes from coal. 
If we weren't blessed with this natural resource, we would face even greater 
shortages and higher prices today. Yet coal presents an environmental 
challenge. 
So our plan funds research into new clean coal technologies. It calls on 
Congress to enact strict new multi-pollutant legislation to reduce emissions 
from electric power plants. My administration's energy plan anticipates that 
most new electric plants will be fueled by the cleanest of all fossil fuels, 
natural gas. Our nation and our hemisphere are rich in natural gas resources, 
but our ability to develop gas resources has been hampered by restrictions on 
natural gas exploration. Our ability to deliver gas to consumers has been 
hindered by opposition to construction of new pipelines that today are more 
safe and more efficient. 
MORE 
I will call on Congress to pass legislation to bring more gas to market while 
improving pipeline safety and safeguarding the environment. 
America should also expand a clean and unlimited source of energy, nuclear 
power. Many Americans may not realize that nuclear power already provides 
one-fifth of this nation's electricity, safely and without air pollution. But 
the last American nuclear power plant to enter operation was ordered in 1973. 
In contrast, France, our friend and ally, gets 80 percent of its electricity 
from nuclear power. By renewing and expanding existing nuclear facilities, we 
can generate tens of thousands of megawatts of electricity at a reasonable 
cost without pumping a gram of greenhouse gas into the atmosphere. 
New reactor designs are even safer and more economical than the reactors we 
possess today. And my energy plan directs the Department of Energy and the 
Environmental Protection Agency to use the best science to move expeditiously 
to find a safe and permanent repository for nuclear waste. 
Our energy plan also supports the development of new and renewable sources of 
energy. 
It recommends tax credits to homeowners who invest in solar homes and to 
utilities that build wind turbines or harness biomass and other 
environmentally friendly forms of power. 
It removes impediments to the development of hydroelectricity. It proposes 
incentives to buy new cars that run on alternative fuels like ethanol that 
consume less oil and, therefore, pollute less. 
It supports research into fuel cells, a technology of tomorrow that can power 
a car with hydrogen, the most common element in the universe, and emit only 
steam as a waste product. 
In all of these ways, we will expand the diversity or our energy supply. But 
as with conservation, new energy supply alone is not the whole answer. There 
is a third element we must address: modernizing the network that delivers the 
supply to the point of demand. 
In 1919, a young U.S. Army officer was ordered to lead a truck convoy 
westward across our country. He was astonished to discover that the journey 
took 62 days. His name was Dwight David Eisenhower. And the memory of this 
bumpy, transcontinental ride led to the creation of a modern transportation 
system. 
Today, our electrical system is almost as bumpy as our highways were 80 years 
ago. We have chopped our country into dozens of local electricity markets, 
which are haphazardly connected to one another. 
For example, a weak link in California's electrical grid makes it difficult 
to transfer power from the southern part of the state to the north, where the 
blackouts have been worse. 
Highways connect Miami with Seattle, phone lines link Los Angeles and New 
York, it is time to manage our interstate highway and phone systems with an 
interstate electrical grid. 
And here, too, technology will make a big difference. Electricity markets 
used to be localized because wires could not carry electrical current over 
long distances. More and better wires can efficiently ship power across the 
country, reducing the threat of local blackouts or outages. And it's just not 
our electricity delivery system that has fallen behind. 
The energy report projects that natural gas consumption will rise rapidly as 
electric utilities make greater and greater use of this environmentally 
friendly fuel. We will need newer, cleaner and safer pipes to move these 
larger quantities of natural gas - up to 38,000 new miles of pipe and 263,000 
miles of distribution lines. 
We'll also need to recognize the energy potential of our neighbors, Canada 
and Mexico, and make it easier for buyers and sellers of energy to do 
business across our national borders. 
And finally, we must work to build a new harmony between our energy needs and 
our environmental concerns. 
Too often Americans are asked to take sides between energy production and 
environmental protection, as if people who revere the Alaska wilderness do 
not also care about America's energy future; as if the people who produce 
America's energy do not care about the planet their children will inherit. 
The truth is, energy production and environmental protection are not 
competing priorities. 
They're dual aspects of a single purpose: to live well and wisely upon the 
earth. Just as we need a new tone in Washington, we also need a new tone in 
discussing energy and the environment; one that is less suspicious, less 
punitive, less rancorous. We've yelled at each other enough. Now it's time to 
listen to each other and to act. 
And it's time to act. 
The energy plan I lay out for the nation harnesses the power of modern 
markets and the potential of new technology. 
It looks at today's energy problem and sees tomorrow's energy opportunity. 
It addresses today's energy shortages and shows the way to tomorrow's energy 
abundance. 
I have great faith in our country's ability to solve the energy problem, and 
our energy plan shows the way. But most of all, I have great faith in the 
American people, our land's ingenuity, our innovation. Our entrepreneurial 
spirits is this country's greatest of all resources. And thank God, they are 
never in short supply. 
God bless. 
END

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


Williams Capital Group's Ellinghaus on Energy Policy: Comment
2001-05-17 12:30 (New York)


     New York, May 17 (Bloomberg) -- Chris Ellinghaus, energy
analyst for New York-based investment bank Williams Capital Group
LP, comments on the U.S. energy task force report. President
George W. Bush released the report today in Minnesota.

     ``The Bush plan includes a courageous, pragmatic and long-
term strategic policy that prepares for a sufficient future energy
supply. Many investors believe that the energy commodity markets
will quickly correct to over-capacity over the next one or two
years. (However) we firmly believe that sufficient energy supplies
will be constrained without new energy policy.''

     ``The Bush plan avoids the politically popular but short-
sighted temptation of curtailing demand and capping prices.''

     ``Price controls of the early 1970s contributed to
stagflation in the late 1970s and early 1980s that we would not
care to see repeated.''

Affect on energy stocks:

     ``We expect the debate over energy policy to be heated and
controversial.''

     ``The plan overestimates the political will of the country to
embrace new coal and nuclear power generation but does envision
the need for greater fuel diversity. Yet, the Bush plan relies
heavily on natural gas for as much as 90 percent of new electric
generating capacity. In addition, without a sound policy for
nuclear spent fuel shortage, we doubt significant new nuclear
construction is likely over the near term.''

     ``As the debate unfolds over the next several months, we
believe the stocks of the energy sector participants could be
jostled periodically with condemning rhetoric. However, we expect
extremely strong realized earnings over the course of the summer
and growing expectations for next year to provide momentum for
power generators, utilities and wholesale energy marketers. We
encourage investors to be patient with these stocks.''


Enron's Maurer on Brazil's Power Regulation Problems: Comment
2001-05-17 15:39 (New York)


     Sao Paulo, May 17 (Bloomberg) -- Luiz Maurer, regulations
superintendent for Enron America do Sul Ltda., comments on
regulation problems in Brazil that have prevented companies from
investing in power generation. Maurer is also vice president of
the Brazilian association of electricity trading companies, known
as Abracel.

On price controls:
    ``There are many barriers in the contracts that must be signed
between the generators and distributors. In the contracts to
purchase natural gas, it still hasn't been determined who will pay
for the foreign exchange losses. The distribution companies do not
have the assurance that they will be allowed to transfer to their
customers all the costs'' beyond their control.

     The ceiling rate for distributors to buy energy from
generators ``has been increased twice but it still does not cover
some types of costs such as changes in the electricity
transmission costs. There is a proposal in which the ceiling rate
would be defined by the market'' and not by the power regulator.

On Petrobras taking over currency costs for distributors:
     ``We will be creating an anti-competitive situation. Another
natural gas distributor will be in disadvantage against Petrobras.
It would not be a measure that would foster competition in the
next four years. The best measure is to let the consumer pay for
the foreign exchange losses.''

     Abracel and other industry associations ``have proposed the
creation of a tracking account that would accumulate the losses
and gains with the currency plus the financial cost over time so
that this would be transferred to the final consumer in the next
annual rate adjustment.''


Enron to Provide Gas Prices to NGX, Drops Lawsuit (Update1)
2001-05-15 16:26 (New York)

Enron to Provide Gas Prices to NGX, Drops Lawsuit (Update1)

     (Adds closing share price.)

     Houston, May 15 (Bloomberg) -- Enron Corp., the world's
biggest energy trader, agreed to provide natural-gas pricing
information to NGX Canada Inc. and drop a C$100 million
($64.7 million) suit against the Canadian gas exchange.
     Enron sued NGX in November after the Internet exchange, a
unit of the company that owns the Stockholm Stock Exchange,
changed providers of its gas-pricing data and didn't include
trades on EnronOnline, Enron's Internet exchange, when calculating
gas-price indexes.
     Calgary-based NGX agreed to include EnronOnline trades in
calculating its Alberta Gas Price Indices by August, Enron
spokesman Eric Thode said.
     NGX, owned by Stockholm's OM Gruppen AB, is used by about 90
percent of Canadian gas traders, and many traders use EnronOnline
to sell gas from western Canada, the biggest supplier of the
cleaner-burning fuel to the U.S.
     Houston-based Enron fell $1.76 to $56.99.


Venezuela to Award 11 Gas Tracts June 28-29, First Since 1975
2001-05-17 13:36 (New York)


     Caracas, May 17 (Bloomberg) -- Venezuela said it will award
11 potentially rich natural gas tracts in a June 28-29 auction
expected to clear the way for over $1 billion in investments.
     Thirty-four companies, the majority foreign, qualified to
participate in the auction, the first since the country's natural
gas industry was nationalized in 1975-1976.
     The auction is expected to generate between 8,000 and 10,000
jobs, said an Energy and Mines Ministry spokeswoman.
     Venezuela, with about 147 trillion cubic feet in reserves, is
counting on private companies to spur development. Venezuela is
preparing distribution and transmission projects, which would also
tap private investment.
     Among the expected bidders are Enron Corp. and Perez Companc
SA.


USA: U.S. green groups pummel Bush energy plan.
By Patrick Connole

05/17/2001
Reuters English News Service
(C) Reuters Limited 2001.

WASHINGTON, May 17 (Reuters) - Environmentalists expressed deep 
dissatisfaction with the energy crisis plan which President George W. Bush 
unveiled on Thursday, calling it wrongheaded and dangerous to forever seek 
increasing supplies of oil, coal, natural gas and nuclear power. 
Activists from the full spectrum of America's environmental lobby took issue 
with at least some of the expansive $10 billion plan.
Many claimed the plan would harm public health by dirtying the air or 
destroying designated wilderness areas in the west or in Alaska. The 
long-term measures would be costly and offer no short-term relief to 
consumers facing power shortages and record-high gasoline prices this summer, 
green groups said. 
"The president's plan won't produce affordable energy for Americans now, or 
ten years from now," said Philip Clapp, president of the National 
Environmental Trust. 
"What the president's plan will do is drive up air pollution in our cities 
and turn the last 5 percent of our public lands that we've protected for 
future generations over to the oil and coal companies." 
GREENPEACE DUMPS COAL 
Coal was the theme of protests by members of the Sierra Club and Greenpeace, 
who used the fuel as props to disparage the White House plan to use vast 
domestic supplies of coal. 
Greenpeace activists dumped five tons of coal and five fake drums of oil and 
nuclear waste outside Vice President Dick Cheney's residence on Thursday. 
Cheney, the former top executive of oilfield services giant Halliburton Co , 
headed the task force which wrote the energy plan. 
The drums were labeled with the logos of Exxon/Mobil, Chevron, Texaco, BP and 
Enron. 
Sierra Club protesters trailed Bush as he swung through Minnesota and Iowa, 
holding news conferences at coal-fired power plants to offset what they 
termed misleading appearances by Bush at environmentally friendly facilities 
used to promote the White House recommendations. 
"It would be more honest for President Bush to stand in front of the dirty 
and dangerous coal and nuclear plants that his plan promotes," said Carl 
Pope, executive director of the Sierra Club, which claims some 650,000 
members. 
Environmentalists portrayed the crisis report as the work of the energy 
industry, which has close ties to the Bush administration, and out of touch 
with the pro-conservation, pro-efficiency sentiments in the nation. 
"If they are so enamored with dirty power, they can have it, because the 
American people don't want it." said Andrea Durbin, Greenpeace Campaigns 
Director. 
WILDERNESS AREAS THREATENED 
Other green groups criticized the White House energy plan for proposing a 
review of federal lands that ban oil and gas development. 
The vast majority of federal lands in the west are already open to oil and 
gas drilling, leaving mostly designated federal wilderness areas and national 
monuments off limits to development, according to Susan Daggett, an attorney 
with Earthjustice Legal Fund in Denver. 
"These areas have been protected for a reason, and typically they have very 
little in the way of recoverable oil and gas reserves," Daggett said. 
The National Audubon Society said the search for energy in "wild" lands would 
mean small amounts of new production at the cost of wrecking what were once 
unmolested places. 
"The energy policy encourages the blowing off of mountaintops in West 
Virginia, destroying endangered cerulean warbler habitat for a small amount 
of coal," said John Flicker, president of the Audubon group. 
Although the White House plan backs drilling in the Arctic National Wildlife 
Refuge, that provision lacks Senate support to go forward, according to 
congressional sources. 
NO CLIMATE CHANGE HELP 
One gaping hole in the Bush plan, according to global warming experts, is the 
lack of new initiative to help solve the problem of carbon dioxide emissions, 
which many scientists blame for worsening climate change. 
"It costs less to include carbon dioxide as part of a comprehensive system of 
pollution reductions now, rather than putting it off into the future," said 
John Stanton, vice president of the National Environmental Trust. 
Bush has rejected U.S. participation in international talks to finalize the 
Kyoto Protocol. The treaty sets targets for industrialized nations to cut, on 
average, by 5.2 percent the amount of carbon emitted under 1990 levels by 
2010. 
The new White House plan instead seeks legislation to cut other pollutants 
like nitrogen oxide, sulfur and mercury. 
Cheney has said if people are worried about carbon emissions, they should 
back nuclear power generation. Green groups scoffed at the idea of nuclear 
power as an environmentally friendly fuel, citing the hazardous waste from 
plants and public fears of a major "Chernobyl" style disaster.

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


INDIA: Enron India unit lenders put off cancellation vote to Friday.

05/17/2001
Reuters English News Service
(C) Reuters Limited 2001.

BOMBAY, May 17 (Reuters) - Local and foreign lenders to Enron Corp's troubled 
Dabhol Power Company (DPC) squabbled on Thursday, forcing the postponement of 
a vote that would decide whether DPC will pull the plug on a controversial 
deal to sell power to an Indian state, a source close to the deal said. 
Indian lenders, led by State Bank of India, , the country's largest 
commercial bank, opposed allowing DPC to terminate its contract as it would 
affect their finances, the source added.
Foreign banks, whose exposure comprises only 30 percent of the project's 
total debt of around $2 billion, wanted to give DPC the go-ahead to cancel 
the contract. 
The lenders, who discussed the issue in a conference call on Thursday 
evening, have now decided to vote on the issue on Friday, the source added. 
The lenders' dispute once again highlights the controversy surrounding the 
$2.9 billion, 2,184 MW power project that was promoted in 1991 to bring 
electricity to one of India's most backward regions. 
The project's first phase of 740 MW was completed in May 1999 while the 
second phase of 1,444 MW is slated to begin generation next month. 
Dabhol, which is 65 percent owned by Houston-based Enron, signed a contract 
with Maharashtra State Electricity Board (MSEB) to sell all the power 
produced. 
But MSEB reneged on the contract by refusing to buy power from the second 
phase citing high costs. It has also not paid Dabhol $48 million for 
electricity purchased in the past months. 
Last month, Dabhol issued a notice of arbitration to MSEB and also got its 
board approval for issuing a notice to terminate the contract. 
Such a move, analysts say, would hit India hard and affect foreign investment 
flows into the country's power sector. 
($1=46.93 Indian rupees).

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


UK: Global Coal website starts e-trading coal.

05/17/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, May 17 (Reuters) - London-based internet coal trading platform Global 
Coal, set up by some of the world's biggest mining groups and commodity 
trader Glencore, said on Thursday it was pleased with its first two days of 
live trading. 
"On our first day (Wednesday) 60,000 tonnes of coal traded representing $2.26 
million and already today (Thursday) 120,000 tonnes has traded," Global 
Coal's head of marketing John Loewen told Reuters.
"We are pleased with the way it is going." 
Among Global Coal's main backers are miners Rio Tinto Plc/Ltd , Anglo 
Amercian Plc and Billiton Plc , and utilities utilities TXU Europe and Enel . 
Loewen said Global Coal's e-platform, wwww.globalcoal.com, was allowing 
parties to contract business using the Standard Coal Trading Agreement 
(Scota). 
"There is a real need to have a standard contract, since coal is not 
homogeneous", Loewen said. 
Loewen said there was vast potential for business as coal trading liquidity 
improves. 
"We have already seen the success of Enron, although EnronOnline differs 
substantially from Global Coal in that it (Enron) is the counter-party". 
Loewen said he did not want to put a number on future transaction levels. 
"Lets just say we would like to see millions of tonnes trading". 
Global Coal acts as a platform for buyers and sellers to conduct trade and 
the company takes a commission on each deal. 
While coal may no longer enjoy the dominance it had 100 years ago in the west 
during the "King Coal" era, it still accounts for over a quarter of world 
energy use and generates over a third, 38.4 percent of global electricity, 
according to the International Energy Agency. 
Spot coal trading has become increasingly popular in Europe over the last 18 
months or so as the European electricity market liberalises and utilities 
seek out the cheapest fuel in a competitive market.

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


CHINA: India tells Enron to renegotiate Dabhol contract.

05/17/2001
Reuters English News Service
(C) Reuters Limited 2001.

HONG KONG, May 17 (Reuters) - India has told U.S. energy company Enron Corp 
that it should renegotiate its contentious power purchase agreement with the 
Maharashtra state government, Finance Minister Yashwant Sinha said on 
Thursday. 
"We have suggested to Enron that they should seriously renegotiate the power 
purchase agreement with the government of Maharashtra, because there are 
certain elements in that power purchase agreement which can undergo a 
change," Sinha said at a business luncheon in Hong Kong on Thursday.
Enron and India have been sparring for six months over payment defaults by 
the Maharashtra State Electricity Board (MSEB) for power purchased from Enron
's Indian unit, Dabhol Power Company (DPC). 
A Dabhol spokesman on Thursday declined to comment on Sinha's statement. He 
reiterated the company's previously stated position that it is ready for a 
dialogue to resolve all issues, but a renegotiation of the contract is not on 
offer. 
DPC has already held a meeting with a Maharashtra government committee and is 
slated to meet them again on May 23. 
"Since the purpose of the meeting is only to hear out the committee and 
understand their thoughts, we will not present any proposal," Dabhol said in 
a statement on May 3. 
DPC is building the world's largest natural gas fired power plant on India's 
western coast. The 740 megawatt (MW) first phase of the facility began 
operating in 1999. The plant's generating capacity will triple to 2,184 MW 
when phase two is completed next month. 
MSEB agreed in 1995 to buy all the power produced by the plant, but now says 
the power is too expensive, and is refusing to take the additional 
second-phase capacity. Its change of mind has sparked concern over the fate 
of the project. 
DPC has already issued a notice of arbitration, and last month its board 
authorised management to terminate the contract. A vote on Thursday by 
lenders to the project is expected to endorse the board's decision, a source 
close to the matter told Reuters. 
Sinha said he had no comment on the vote. He also declined to reveal the 
federal government's opinion of MSEB's refusal to buy the second-phase power.

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


Common Cause Statement On Cheney Energy Panel's Report; Recommendations Seen 
As Payback For Big Time Donors

05/17/2001
U.S. Newswire
(Copyright 2001)

WASHINGTON, May 17 /U.S. Newswire/ -- Following is a statement by Common 
Cause President Scott Harshbarger on the Cheney Energy Panel's Report: 
While energy consumers are subjected to rolling blackouts in California, all 
Americans are subjected to a permanent blackout when it comes to the 
closed-door activities of the National Energy Policy Development Group headed 
by Vice President Cheney. According to press reports, not even Congress has 
full knowledge of who is serving on this task force, or a full accounting of 
this secretive body's activities.
The task force's modus operandus does not inspire confidence and many of the 
task force's recommendations -- like easing environmental protections to 
benefit the oil and gas industry -- are what you would expect. Big time 
donors get major league payback, non-donors get higher energy bills and a 
dirtier environment. 
The President and Members of Congress have been very successful at drilling 
for political contributions from the energy sector. In the 2000 election 
cycle, the oil and gas sector contributed $15.4 million in soft money 
contributions to the national political party committees; electric utilities 
contributed $10.1 million more. One company alone, Enron, gave more than $1.4 
million in the last cycle and recently sponsored a major party fundraiser. It 
certainly raises questions about Vice President Cheney's contention that 
conservation is "not a basis for a sound, comprehensive energy policy." 
And these big donors must have been really pleased by President Bush's 
dubious claim that the best way to meet the energy crisis is to cut taxes, so 
that Americans will be better able to pay their higher energy bills! The 
much-vaunted tax cut is, after all, just a revenue shift to the energy sector 
with the taxpayer playing the role of middle-man. 
Taxpayers or anyone else who may feel left out of this secretive process may 
have another chance, however: Energy Secretary Spencer Abraham will be 
holding a private, closed-door briefing on energy policy next Thursday. This 
being Washington, all you need is a big check made out to the National 
Republican Senatorial Committee to attend. 
KEYWORDS: 
ENERGY, POLICY, CAMPAIGN REFORM


Contact: Jeff Cronin or Susan Quatrone, 202-736-5770, both of Common Cause 

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