Aide to Davis Gets Rid of Stock Power: Press secretary sells his of 300 shares in Calpine after being criticized for praising the firm. SEC seeks records from other advisors.
Los Angeles Times, 08/03/01
AROUND MOUNT DIABLO / Danville man gives power to the people
The San Francisco Chronicle, 08/03/01

Conflicts in high places
The San Francisco Chronicle, 08/03/01

Davis aide unloads Calpine stock / Spokesman now seeking advice on his investment in Enron
The San Francisco Chronicle, 08/03/01

Governor's chief spokesman sold energy stocks, he says
Associated Press Newswires, 08/03/01
DEEP POCKETS OF THE ENERGY COMPANIES
The Independent - London, 08/03/01

India's State-run Oil Companies Cut Naphtha Price, Paper Says
Bloomberg, 08/03/01

India won't commit to new round of trade talks until WTO corrects imbalances
Associated Press Newswires, 08/03/01

INDIA PRESS: Reliance Not Interested In Buying Dabhol Pwr
Dow Jones Asian Equities Report, 08/03/01

India: Enron and globalisation
Business Line (The Hindu), 08/03/01

India: Reliance 'not keen on Dabhol Power'
Business Line (The Hindu), 08/03/01

India: Centre 'committed' to resolving Dabhol tangle, says Prabhu
Business Line (The Hindu), 08/03/01

NORWAY: TXU Nordic bids for Trondheim capacity.
Reuters English News Service, 08/03/01

JAPAN: Japan power sector little shaken by deregulation.
Reuters English News Service, 08/03/01

USA: Energy conflict of interest charges fly in Calif.
Reuters English News Service, 08/02/01

U.S. Senate Democrats Vow Fight Over Arctic Drilling (Update2)
Bloomberg, 08/02/01


California; Metro Desk
Aide to Davis Gets Rid of Stock Power: Press secretary sells his of 300 shares in Calpine after being criticized for praising the firm. SEC seeks records from other advisors.
MITCHELL LANDSBERG WALTER HAMILTON; DARYL KELLEY
TIMES STAFF WRITERS

08/03/2001
Los Angeles Times
Home Edition
B-1
Copyright 2001 / The Times Mirror Company

Gov. Gray Davis' chief spokesman said Thursday that he has sold his 300 shares of stock in a California power company in the face of criticism that his ownership constituted a conflict of interest. 
Meanwhile, in a sign that its insider-trading investigation may be intensifying, the Securities and Exchange Commission has in recent days asked some of Davis' energy advisors to supply information about their personal stock trades, according to sources. The SEC began an inquiry last week to determine whether Davis consultants traded energy stocks based on privileged information gleaned in their jobs advising the governor.
The developments came amid an uproar over stock holdings by a number of Davis administration officials and contract employees, several of whom purchased large amounts of stock in energy companies just before or during their employment by the state in energy-related jobs. 
Davis' press secretary, Steve Maviglio, said that he had not been ordered to sell the Calpine Corp. stock, which he bought in May, but that it had become "more of a distraction than it was worth." He had been widely criticized for holding shares in Calpine while publicly praising it as an example of a responsible energy company. Maviglio is not believed to be part of the SEC probe. 
The administration last week fired four state energy traders after finding that they bought electricity from Calpine while owning the company's stock. A fifth trader left to take another job three days after disclosing her stock ownership. And a negotiator of power contracts who owned Calpine stock was fired because he reviewed a state contract to buy power from the San Jose-based company. 
Vikram Budhraja, a key energy consultant to Davis, received a letter from the SEC on Wednesday, a week after California Secretary of State Bill Jones singled out Budhraja's stock transactions in a complaint to the SEC. 
Budhraja's attorney, Stephen Kaufman, said Budhraja received a simple, one-page letter stating that the SEC was conducting an inquiry into possible violations of security fraud laws. 
It is common in the early stages of an investigation for the SEC to send letters asking that individuals voluntarily supply information such as stock-trading records. 
"They asked that we voluntarily provide documents relating to all of my client's stock transactions since Jan. 1," Kaufman said. "We do not believe the SEC matter has any basis whatsoever. And the documentation will show in no uncertain terms that Mr. Budhraja was never involved in insider trading." 
Jones estimated that Budhraja made a 40% profit in January buying and selling stock of Edison International, the parent company of Southern California Edison. He said Budhraja also made a 28% profit in trading stock of Houston energy company Dynegy Corp. that he bought Jan. 11. 
Kaufman said Budhraja's stock purchases do not constitute insider trading because the transactions occurred before state officials first talked with the consultant about a job Jan. 25, so he could not have decided to buy because of confidential information. 
"Insider trading requires the use of knowledge that was not generally available to the public," Kaufman said. He said his client is simply a savvy investor. 
Dispute Over Contract Dates 
Jones, however, said the $6.2-million contract between the Electric Power Group, which Budhraja heads, and the state to manage California's power buying is dated Jan. 18, before he bought his second batch of Edison stock. 
Kaufman maintains that the contract was misdated. 
"Ultimately, the contracts, the invoices, the governor's office and the DWR [Department of Water Resources] will confirm that the first contact was on Jan. 25," Kaufman said. "[Budhraja] came on board on the 29th and he sold his stock that morning." 
Fired trader William Mead, whose purchase of more than $100,000 in Calpine stock was highlighted in Jones' complaint to the SEC, could not be reached Thursday. But he has said he did nothing wrong. 
Former power trader Elaine Griffin, who resigned three weeks ago and still owns about $10,000 of Calpine stock, said Thursday that she has not been contacted by the SEC but would welcome an inquiry. 
"It doesn't matter to me because I didn't do anything wrong," she said. "The state did something wrong by not having us fill out these [financial] statements five months ago when we started. Now it's a big deal." 
Davis spokesman Maviglio said he sold his Calpine shares Thursday morning, two days after questions arose about his purchase of that stock and shares of Enron Corp., a Texas-based generator that has been one of Davis' key targets for criticism. 
Maviglio said he had not sold the Enron stock, but had sent a letter to the state Fair Political Practices Commission asking for advice on whether it was proper for him to own it. He previously had defended his ownership of both stocks, saying that he had not been privy to any insider information. 
FPPC spokeswoman Sigrid Bathen said she could not confirm whether the commission had received the letter and could not comment about Maviglio's specific situation. 
In general, state law requires government officials to disclose any potential conflict of interest and to disqualify themselves from acting on any matter in which they hold a financial interest. 
Maviglio said that Davis has not asked him to resign and that he has no intention of doing so. 
He leavened his predicament with humor, joking--after answering the phone in the governor's press office, a job usually done by a subordinate--that he had been reduced to answering phones as a result of a Los Angeles Times editorial calling for his removal. 
He also observed wryly that he had taken a sizable loss on the Calpine stock, which has followed a general retreat by energy stocks in recent weeks. 
"I took a $1,300 bath, thank you very much," he said.

PHOTO: Steve Maviglio, Gov. Davis' chief spokesman, said he took a loss in selling his stock.; ; PHOTOGRAPHER: Associated Press 
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

CONTRA COSTA FRIDAY
SAM MCMANIS
AROUND MOUNT DIABLO / Danville man gives power to the people
SaM McManis

08/03/2001
The San Francisco Chronicle
FINAL
1
(Copyright 2001)

Consumed by the power crisis, I've pined for a tour of one of Northern California's energy generators, a setup I heard was an impressive sight. It took a while to arrange - you know these moguls - but it was worth the wait. I came away with nothing but admiration for this noble power supplier. 
No, heat stroke has not addled my judgment. This is no valentine to Mirant or Calpine or Enron. I think we've all got some pointed words for those companies, right?
I'm talking about my visit to John Chapman's Danville home. 
Yes, a retired businessman from Danville has gotten into the power business. Well, sort of. 
Chapman is an ardent environmentalist who, four years ago, installed a photovoltaic net-metering energy system at his 3,800- square-foot house. Forty-eight solar panels face 15 degrees to the south on Chapman's roof, and the energy he receives from it not only powers his home but goes onto the PG&E grid for others to use. 
"When I'm exporting power during the day," Chapman says, "my neighbors are using my electricity. I kid them and tell them I'm going to send them all bills." 
Unlike conventional solar-energy systems, Chapman's does not send the power it generates into batteries that are used to power his home. Rather, the electricity is funneled through to PG&E's grid, which serves as kind of a storage unit for his needs. 
Any excess power is sent out to those in Chapman's power block, meaning that PG&E can charge his neighbors for power it obtained gratis from Chapman. At night, when Chapman's photovoltaic cells ebb, he takes back electricity from the grid. It works like a savings account at a bank. 
Sure, it's not exactly gobs of electricity that Chapman is exporting to the grid, but that's not the point. 
"The theory is, you create energy during the day and draw it at night," he said. "It's called metering, and it works. The great thing is that it generates the most in peak hours of the day, when the system's under the most pressure." 
It is an awesome sight to catch a glimpse of Chapman's meter during daylight hours. 
Most of the time, the meter runs backward. 
On the day I visited, the meter was not moving forward or backward. Chapman was using all the energy his system was generating. 
"Oh, that's because I'm heating my pool right now," he said, smiling. 
That smile is born of satisfaction and forethought. Chapman is something of a solar-energy pioneer in these parts. In 1997, he became the first homeowner in Contra Costa County to install a solar system that plugs directly into the grid. It wasn't cheap, though. Light Energy Systems in Concord charged him about $25,000 to install the unit. 
Remember, this was long before regulation and the energy crisis. When some of his neighbors learned of the price tag, they thought he was being extravagant. They don't anymore. 
"Yeah, I feel a little smug," Chapman says. "I didn't do it to save money. Back in 1997, when I made the decision, my bills were normal. I'm just a passionate believer in getting off fossil fuels and developing new technology. I know $25,000 is a lot, but it's coming down. Now, the more this technology is installed, the cheaper it gets. So, someone had to start it." 
It wasn't easy to get PG&E to agree to partner with Chapman is this experiment in clean electricity. He fought long and hard to get the power company to agree to the deal, agreeing to take out insurance in case "I blew up the grid," he recalls with a laugh. 
One year after Chapman's system was up and running, the state Assembly passed AB 1755, a net-metering bill requiring utilities to let residents like Chapman tie their solar power to the grid and get energy "credit." PG&E says only 12 customers in its service area have become net-metering generators. 
"My interest in it is as an environmentalist," says Chapman, who has been involved with the Sierra Club for many years. "It's pollution-free and renewable. Theoretically, there's an unlimited supply of sun. I've read there's only a 75-year supply of oil left." 
Chapman is like a proud poppa showing off his system. Lately, he's become something of a media darling. 
"Even TV stations and newspapers from Japan have come out here to film it," he says. "I'm not out for publicity, just to get the renewable-energy message out." 
Chapman's home is tucked in a cranny of the foothills west of Interstate 680, and the 48 solar panels are not evident from the street. 
But walk around to the south side of Chapman's house, and there they are. Some are propped up on girders, pointed south. They aren't the prettiest sight, but aesthetics were not Chapman's priority. He did say, however, that new technology allows home builders to install solar roof shingles that look only slightly different from regular roof shingles. 
"After the initial cost, I haven't had to do any repairs," Chapman says. "It's not like a common solar house, where you have to replace the batteries every five years. And then, as an environmentalist, you have to find a way to dispose of the batteries, and that's troubling." 
At that point in his presentation, Chapman flung open a pair of French doors near his garage to show off his inverter.It's large, but not imposing. He can hide it behind doors, and visitors might mistake it for a storage space. There are no gaudy generators or towers. There's no blight on the landscape. 
"This is the brains of the thing, where AC turns to DC (energy), and these wires here send it right into PG&E's hookup," Chapman says. "If I didn't choose to use my pool heater and my air conditioning - which I do only when it's really hot - I'd be exporting even more power. 
"If you don't have as big a house as this and don't have a pool, you don't need this huge of a system," he says. "I'd like to see a day when everybody has this." 
Of course, Chapman also would like to see the day when everybody drives electric - or, at least, hybrid - automobiles. He's thinking of buying one himself and, of course, he wants to find a way to recharge it off his personal power supply.

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

EDITORIAL
EDITORIALS
Conflicts in high places

08/03/2001
The San Francisco Chronicle
FINAL
A.22
(Copyright 2001)

HOW MANY more of Gov. Gray Davis' advisers are holding stock in companies that are making big bucks from California's power crisis? 
Surely it's time for Davis to disclose who else among his team of energy experts is profiting along with the companies he accuses of gouging the public.
A growing list of the governor's energy advisers and appointed regulators have stock holdings in booming power companies with whom they have official dealings. 
Ownership of such lucrative energy stocks by officials seeking solutions to a state power emergency that is draining the treasury not only looks bad, it has the strong odor of a conflict of interest. 
Chronicle reporter Bill Wallace revealed yesterday that Bruce Williston, a Davis appointee to the California Electric Oversight Board, has about $1 million worth of stock in Enron Corp., one of the state's major power suppliers. 
On Wednesday, Chronicle reporter Scott Winokur disclosed that the chairman of the California Energy Commission, William Keese, last year owned about $510,000 in stocks of companies his agency regulates and never recused himself from official actions affecting those firms. 
Last week, Davis felt compelled to fire five consultants for conflicts of interest -- a sixth quit -- after it was discovered they were negotiating contracts from power companies whose stock they owned. 
Then, it was disclosed Davis' top spokesman, Steve Maviglio, in June purchased $12,000 worth of stock in Calpine Corp. of San Jose, another major energy provider. 
It does not take a ethicist to know that the governor's advisers, agents and appointees should avoid stocks in energy companies doing business with the state. 
No state official should be -- or even appear to be -- in a position to profit from a crisis that has hurt so many Californians.

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

NEWS
Davis aide unloads Calpine stock / Spokesman now seeking advice on his investment in Enron
Lynda Gledhill
Chronicle Sacramento Bureau

08/03/2001
The San Francisco Chronicle
FINAL
A.5
(Copyright 2001)

Under fire for owning energy stock, Steve Maviglio, Gov. Gray Davis' chief spokesman, yesterday sold his stock in Calpine Corp. 
The revelation comes as Davis' administration continues to be battered by reports that appointees and consultants working on the energy crisis own stock in power companies.
Maviglio, Davis' interim communications director, sold the 300 shares of Calpine that he had purchased last month, said spokeswoman Hilary McLean. 
"He felt it was becoming a distraction," McLean said. 
She said that the sale was voluntarily and that no one had asked Maviglio to sell the stock. 
Republicans and public-interest groups criticized Maviglio for purchasing the stock while the Davis administration was negotiating long-term energy contracts with Calpine and promoting the company's efforts to build power plants in California. 
Secretary of State Bill Jones, who is challenging Davis in 2002, and an editorial in the Los Angeles Times both called on Maviglio to resign. 
But Maviglio won't be fired or reprimanded for the purchase, McLean said. 
Earlier this week, Maviglio said that he had purchased 300 shares of Calpine at $40 each on June 20, after putting in an order on May 31. He denied any conflict of interest and said the stock had been sold earlier this week. 
Shares of Calpine, based in San Jose, closed at $36.80 yesterday. They had dropped 9.2 percent from June 20 to yesterday's close. 
Maviglio also owns stock in Enron, an energy trading company that sells electricity to California. Maviglio bought the stock in February 1996. Those shares were not sold, but he is seeking further clarification on any possible conflict, McLean said. 
Republicans and public interest groups have criticized Davis after disclosures that some advisers and consultants to the state on energy matters owned shares in companies that are trading electricity or negotiating long-term power contracts with California. 
Last week, Davis fired five energy advisers for possible conflict- of-interest problems after they helped negotiate state spot-market purchases or long-term power contracts. Four of the five owned stock in Calpine, and the fifth held Enron shares.

PHOTO; Caption: Steve Maviglio is the latest Gov. Gray Davis aide to become embroiled in controversy. 
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	


Governor's chief spokesman sold energy stocks, he says

08/03/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

SACRAMENTO, Calif. (AP) - Gov. Gray Davis' press secretary sold the 300 stocks he held in an energy company Thursday, after being criticized for owning the stock while he publicly touted the company's responsibility. 
Steve Maviglio said he had not been told to sell the stock in San Jose-based power generator Calpine Corp., but did so because it had become "more of a distraction than it was worth." Critics called his ownership a conflict of interest.
Maviglio has praised Calpine as an example of a responsible energy company. 
Calpine has received about $13 billion in state contracts to supply electricity for up to 20 years. 
Maviglio said he has not sold stock he owns in the Texas-based power generator Enron Corp., but has sent a letter to the Fair Political Practices Commission asking if it is proper for him to own it. 
Maviglio bought the stock for $12,000 and said he had lost $1,300 on it. 
News of his purchase came after Davis' office fired five consultants who helped negotiate state power contracts and held stock in energy companies. 
The Securities and Exchange Commission began an inquiry last week to determine whether Davis' consultants violated any security fraud laws. 
Vikram Budhraja, an energy consultant to the governor, received a letter from the SEC Wednesday, asking for documents relating to Budhraja's stock transactions since Jan. 1, said Budhraja's lawyer Stephen Kaufman. 
"We do not believe the SEC matter has any basis whatsoever," Kaufman told the Los Angeles Times. "And the documentation will show in no uncertain terms that Mr. Budhraja was never involved in insider trading."

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

News
DEEP POCKETS OF THE ENERGY COMPANIES
Andrew Gumbel

08/03/2001
The Independent - London
FOREIGN
3
(Copyright 2001 Independent Newspapers (UK) Limited)

FOLLOW THE money: that is the simple principle explaining how the US House of Representatives approved President Bush's controversial plan to open the Arctic National Wildlife Refuge to oil exploration. 
Congressional members were heavily swayed by the backing they received from oil, gas, coal and other energy companies. The energy sector contributed nearly $65m (pounds 45m) to congressional races in the run-up to last year's elections, 75 per cent of it going to Republicans.
Among the recipients was Billy Tauzin, a Louisiana representative who co-sponsored the energy bill in the House. He received $180,393, while his three co-sponsors received more than $200,000 between them. The average House Democrat received just $8,393 from the oil and gas industry, but the 36 who voted in favour received an average of $17,074. 
Controversy has also raged over the number and identity of energy industry lobbyists canvassed by the White House's special energy taskforce, headed by Vice President Dick Cheney, when it drew up the plan and proposed oil exploration in the Arctic earlier this year. 
Several media organisations have launched lawsuits to try to pressure Mr Cheney into releasing the information. US press reports suggest that figures such as Kenneth Lay, the chief executive of the Texas energy producer Enron and a major Bush contributor, played a key role in writing the policy.

Caption: Dick Cheney: Headed special energy taskforce 
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

India's State-run Oil Companies Cut Naphtha Price, Paper Says
2001-08-02 23:47 (New York)


     New Delhi, Aug. 3 (Bloomberg) -- India's state-run oil
companies such as Indian Oil Corp. and Hindustan Petroleum Corp.
cut the price of naphtha even as international crude prices fell,
the Business Standard reported, without citing sources.
     Naphtha, used by Enron Corp.'s Dabhol power plant to produce
electricity, is now cheaper by 5 percent or 660 rupees ($14) a
ton. The petroleum companies, however, increased the price of
furnace oil by 3 percent or 250 rupees for 1,000 liters. The new
prices took effect Wednesday, the paper said.
     The price cut in naphtha may have been the result of a recent
decline in international crude oil prices, analysts said. Dated
Brent Crude fell to $25.67 a barrel yesterday from $29.34 on June
11, and 32 percent below a one-year high of $37.73 last September.
     This is the second month oil companies reduced the price of
naphtha, which is the key raw material for Reliance Industries
Ltd., India's biggest non-state company by sales. However,
Reliance hasn't been able to benefit from sliding naphtha prices
as its product prices dropped faster in the quarter ended June 30,
hurting margins.


India won't commit to new round of trade talks until WTO corrects imbalances
By RAJESH MAHAPATRA
Associated Press Writer

08/03/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

NEW DELHI, India (AP) - India won't commit to a new round of trade talks until the World Trade Organization corrects imbalances in existing agreements, the country's commerce minister said ahead of a crucial visit by the U.S. trade representative. 
U.S. Trade Representative Robert Zoellick will meet with Commerce and Industry Minister Murasoli Maran and other officials next Wednesday to discuss trade ties and a possible new round of global trade negotiations later this year.
Like most developing countries around the world, India is opposed to a new round of talks proposed by the United States and the European Union because it believes the industrialized nations are benefitting more from the existing agreements than Third World members. 
"We are not going to talk about a new round at all," Maran told The Associated Press in an interview Thursday. 
"We cannot say that benefits of the Uruguay round are equal. There are a lot of ... imbalances. Unless they are addressed to the satisfaction of developing countries, it will be difficult to go further." 
Most developing countries maintain that the Uruguay round of negotiations, which led to the formation of the WTO, has left the poorer countries belonging to the 141-member trade group with too many difficult commitments and not enough in return. 
They complain that the developed countries have raised more non-tariff barriers, while developing countries have had to reduce tariffs, open up their economies to foreign investment and impose patent rules which have heavily burdened some of their industries. 
The United States is keen to get developing countries interested in launching renewed trade liberalization, and as one of the largest and most important developing countries, India's support would help. 
India, however, insists the WTO should first sort out the implementation issues. 
There are differences over implementation of agreements relating to intellectual property rights, agricultural subsidies and trade related investment measures. The WTO is trying to sort out these differences. 
"There is an impression given as if there is no agenda before the WTO. There is a big agenda which contains 200 items. We have not moved an inch on them," Maran said. "They are stonewalling the implementation issues." 
The WTO held a meeting in Geneva earlier this week ahead of the November meeting of WTO trade ministers in Doha in Qatar. After the meeting, WTO Director General Mike Moore said the situation was fragile. 
"The real reality check is that WTO is not prepared for a new round of talks. We should stick to mandated negotiations ... and implementation issues," said Maran, who met Zoellick in Washington two weeks ago. 
After his meeting with Maran, Zoellick told reporters that the United States could help smooth differences between developing countries and the European Union and Japan, both of which support bringing investment and competition policy to the negotiating table. 
"Zoellick is a friend of India and a friend of developing countries. I am sure he will empathize with us," said Maran. 
Zoellick's trip will mark the first Cabinet-level visit by a Bush administration official to India. 
Maran said he was looking forward to Zoellick's visit to further strengthen trade relations between the two countries. 
"There was a paradigm shift in our relations with U.S. during Clinton's time which should be strengthened further," he said, adding that the United States and India have many common trade interests, such as information technology and agriculture. 
However, several thorny issues will be put before Zoellick. 
India likely will express concern over President Bush's decision to investigate whether protection against steel imports is necessary. India has become a major exporter of steel to the United States, provoking the U.S. steel industry to demand higher duties on Indian steel. Enron Corp.'s decision to pull out of a power project in western India following a payment dispute may also be raised. The conflict has left American investors skeptical about investing in India. 
(rkm-bdb)

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


INDIA PRESS: Reliance Not Interested In Buying Dabhol Pwr

08/03/2001
Dow Jones Asian Equities Report
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI -(Dow Jones)- India's Reliance Industries Ltd. (P.REL) isn't interested in buying U.S. energy major Enron Corp.'s (ENE) Dabhol Power Co., the Hindu Business Line reports quoting Reliance Industries Managing Director Anil Ambani. 
"Nothing much is happening in the power sector as a whole. At this point of time, we are focussing on our expansion plans, especially our oil and (natural) gas and telecom businesses," the newspaper quoted Ambani as saying.
Ambani said it was "too premature" to look at the Dabhol project. In the power sector, he said, Reliance was focussing on its Jamnagar plant, located in the western Indian state of Gujarat. 
The Dabhol plant is located in the western Indian state of Maharashtra. 

Web Site: www.blonnet.com 

-By Himendra Kumar, Dow Jones Newswires; 91-11-461-9426; himendra.kumar@dowjones.com

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

India: Enron and globalisation
Kuldip Nayar

08/03/2001
Business Line (The Hindu)
Fin. Times Info Ltd-Asia Africa Intel Wire. Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd. All Rights Res'd

IT IS no more a secret that there was some funny business in the finalisation of the Enron Power project. Both Mr Sharad Pawar and the Shiv Sena government in Maharashtra had gone out of their way to show them favours for reasons not difficult to guess. It was equally clear that the two would one day be taken to task for having preferred personal and party interests to the nation's. Yet, Enron is adopting a righteous stand and asking the Government to buy the $2.9-billion project. Even otherwise, it is a costly project to buy but it is all the more difficult when shady methods were used to clinch the contract and when there are allegations of over-invoicing. 
India is justified in giving vent to unhappiness because the price of Enron's power is three times that charged by the Indian-run company.
Having given an undertaking to buy the electricity from Enron, New Delhi, however upset, cannot rescind the agreement. But the outburst by the US Assistant Secretary of State for South Asian affairs, Ms Christina Rocca, is not understandable. 
Ms Rocca has said India will not get foreign investment until the Enron 'dispute' was settled 'amicably' and that all the MNCs are 'waiting' for the outcome. If this is not arm-twisting, then what is? Ms Rocca is on a 'familiarisation' tour of India and probably has with her Washington's letter promising to lift sanctions imposed when India exploded the bomb. She must have realised that the sanctions have made practically no difference. They have been unproductive. It cannot be America's case that if the MNcs do not invest, India would come around to accepting anything against its national interest. 
True, the multinationals can fill some gaps India may not be able to do on its own in the near future. It is only a question of time. 
India has the potential - and manpower - to transform the country into an economic giant. But to barter independence for a pot of money has never been the nation's ethos. Its long struggle for freedom confirms that. In any case, some day, some government will husband the resources to pull the country out of the mire of underdevelopment and set it on the road to progress. 
Ms Rocca and the multinationals behind her should study Enron's attitude from the beginning. It would be a lesson for them to understand India. 
Enron was arrogant from Day One. The agreement with the Maharashtra State Electricity Board was one-sided. 
From the details of how it came to be signed, one realises how sordid is their story of pressure and perfidy. Who forced the Maharashtra and Central Governments may never be known. But it is known from Enron's own statement that it had to spend Rs 33 crore in 'educating' people on the project. The amount is too low when one finds the Memorandum of Understanding (MoU) was signed within five days of Enron's arrival in Mumbai. There must have been something behind the scenes. 
The MNCs themselves should have gone into the project to find out why India, otherwise working with them normally, has felt so upset over the Enron power project. It is a pity that they know of the 'understanding' and the other methods used to obtain approval for the project. But the trade union spirit does not allow them to say a word, either in public or private. One can find hundreds of faults with India, and Enron can justifiably point towards those. But my argument is different. 
Are the MNCs interested in making a quick buck or making the buyer feel he has not been exploited? Exploitation reminds us of the days of imperialism. It cannot be duplicated in the 21st Century when the countries have cast off slavery. 
This is the crux of problems facing developing countries. The rich G-8 nations fail to appreciate this. They are going ahead with their old policy. They call it globalisation but it is an instrument to capture markets in the underdeveloped or developing countries for the goods which the West cannot sell in its own developed world. 
Protests outside the venue of earlier G-8 meetings should have made them wiser. But they did not. Consequently, thousands of protesters marched in the streets of Genoa (Italy), where the G-8 nations recently met, to express their resentment against global development strategy. 
What happened at Genoa? It looked like a war zone after the initially peaceful protests broke down into riotous confrontations. Small groups clad in black torched cars and smashed shops as larger columns of organised protestors marched on the barricades protecting the port area where leaders of the G-8 industrialised nations had begun a three-day summit. The conflict crossed an ominous threshold with the death of one demonstrator - the first casualty in the wave of protests challenging the morality and standards of globalisation launched during the December 1999 WTO summit in Seattle. 
The US President, Mr George Bush, and his counterparts - the leaders of the UK, Canada, France, Germany, Italy, Japan and Russia - never saw the point of the protests. The issue that moved people from across three continents to travel to Genoa was not whether to globalise, but how to do it in ways that would not leave the majority of people behind. The protests were demanding global justice on a wide range of issues, from debt relief for developing countries to lower barriers against immigration from poorer to richer countries. 
Will the G-8 addresses these issues seriously or will it go on like Enron, from one project to another, bamboozling people and giving the impression that what is being done is in their interest? The answer to this question will give a peep into the strategy of the Enrons of the rich nations.

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

India: Reliance 'not keen on Dabhol Power'
Our Bureau

08/03/2001
Business Line (The Hindu)
Fin. Times Info Ltd-Asia Africa Intel Wire. Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd. All Rights Res'd

MUMBAI, Aug, 2. RELIANCE Industries Ltd is not interested in buying Enron's Dabhol Power Company, Mr Anil Ambani, Managing Director, Reliance Industries, has said. 
Mr Ambani said: "Nothing much is happening in the power sector as a whole. At this point of time, we are focussing on our expansion plans, especially our oil and gas and telecom businesses".
He said it is "too premature" to look at the Dabhol project. In the power sector, the company is focussing on its Jamnagar plant, he added. "Clearly, we have quite a few things moving along (to think about Enron)," he said.

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

India: Centre 'committed' to resolving Dabhol tangle, says Prabhu
Our Bureau

08/03/2001
Business Line (The Hindu)
Fin. Times Info Ltd-Asia Africa Intel Wire. Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd. All Rights Res'd

NEW DELHI, Aug 2. RESOLUTION of the dispute raised by the Dabhol Power Company (DPC) is the responsibility of the State Government and the Centre is fully committed to facilitating an early resolution of the issues raised by the Maharashtra State Electricity Board (MSEB) and DPC, the Lok Sabha was informed on Thursday. 
Responding to the main query raised by the Congress member, Mr. Vilas Muttemwar, during question hour, the Union Minister of Power, Mr Suresh Prabhu, maintained that "we stand fully committed to finding a solution for the Dabhol power crisis which would be beneficial to the State Government of Maharashtra and to the Government of India".
There are two parties to the contract. One is the DPC and the Enron Power Corporation and the other is the MSEB, he said adding that the Central Government gave only a limited counter-guarantee to the phase I of the project. Mr Prabhu clarified that Phase I project was not given any open-ended counter-guarantee by the Centre. 
Refuting the charge made by Mr Muttemwar that the Centre did nothing to resolve the tangle, the Minister said that as per the recommendation of the Energy Review Committee constituted by the State Government under the chairmanship of Dr Madhavrao Godbole, the Group of Ministers (GoM) at the Centre has set up a Negotiating Committee on April 30, 2001 under the chairmanship of Dr Godbole to carry out discussions with the concerned parties. This was with a view to reducing the tariff as well as sale of power of the Dabhol power project. 
The Centre has appointed its own nominee, Mr A.V. Gokak, a former Secretary, to the Negotiating Committee. 
When the member sought to know whether NTPC would take over the project and run, the Minister said that NTPC, a public sector undertaking which supplies more than one-third of power to the country is saddled with 20,000 MW and by taking up this project it would have to raise the tariff besides increasing its own generation capacity by 10,000 MW. In that case, he said, private sector investment would not flow into the power sector as this would give a wrong signal. 
The JD (U) member, Mr Nawal Kishore Rai, sought a White Paper on the whole problem. The Minister said all information relating to the whole project were already in the public domain. Another member sought to know whether it is a fact that under Article 292 and 293 of the Constitution counter- guarantee could be extended only to market borrowing and not to commercial transaction, the Minister recalled that originally counter-guarantee was given in 1994 and was renegotiated in 1996 by the United Front Government. 
In 1998 too it was renegotiated, he said adding that when the entire project is under review, the issue of reviewing counter-guarantee could also be reviewed. 
Jute packaging order: The Union Textile Minister, Mr Kashiram Rana, denied emphatically that the Government has taken a decision to dilute the Jute (Compulsory use in Packaging) Act 1987 under intense pressure from the synthetic lobby. 
He told Mr Amar Roypradhan (AIFB) that Advisory Committee met in June and decided to vary the proportion of use of jute bags by foodgrains including sugar, fertiliser and cement industry in the light of the fact that jute production has not been keeping pace with the increase in foodgrain productions and other material industry which are using jute bags. 
He, however, categorically stated that a final decision on this would be taken by the Cabinet Committee on Economic Affairs (CCEA), he noted. 
Rail safety: The Union Railway Minister, Mr Nitish Kumar, told CPI-M member, Prof A.K. Premajam, said that the Ministry is alive to the overarching need to undertake a massive renewal programmes of rolling stocks, signaling and telecommunications, obsolete bridges and other amenities of the system. 
He said on July 2, the Prime Minister chaired a meeting of the Railways and it was proposed to set up a Special Railway Fund of the order of Rs 17,000 crore for addressing the various renewal programmes of the system so as to minimise accidents and ensure absolute safety to the traveling public.

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

NORWAY: TXU Nordic bids for Trondheim capacity.

08/03/2001
Reuters English News Service
(C) Reuters Limited 2001.

OSLO, Aug 3 (Reuters) - TXU Nordic Energy said on Friday it had made a bid to lease the 770-megawatt production capacity of central Norwegian power company Trondheim Energiverk (TEV). 
TXU Nordic Energy is 80-percent by U.S. energy giant TXU and 20 percent by Finnish PVO.
TXU Nordic Energy said it wanted to lease TEV's hydropower production for an unspecified number of years in return for a capacity tariff to its municipality owner, the city of Trondheim. 
The company declined to comment on the value of its offer. 
"We feel that this solution is the best in order to secure earings for the municipality from the hydropower stations," TXU Nordic Energy's chief executive Evan Edwards said in a statement. 
Norway's strict concession rules prevents private owners - domestic as well as foreign - from full ownership of Norwegian hydropower. 
Rival U.S. energy company Enron last week made a similar offer to TEV estimated at between 3.5-4 billion Norwegian crowns ($386.3 million-$441.5 million) for a 15-20 years lease on its production capacity. 
The city of Trondheim is expected to make its decision next week. Among other bidders for TEV are Norway's state ulitiy Statkraft, Swedish Sydkraft and Birka Energi and Finnish Fortum .

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

JAPAN: Japan power sector little shaken by deregulation.
By Keiko Takagi

08/03/2001
Reuters English News Service
(C) Reuters Limited 2001.

TOKYO, Aug 3 (Reuters) - Japan's major power companies so far remain largely unchallenged despite last year's partial deregulation of the long-protected market, with only a handful of newcomers breaking into the power supply business. 
Since March last year when Japan began to allow non-power utilities to supply electricity to large-lot consumers - estimated at some 30 percent of the power market - only nine firms have registered to enter the power business, the Trade Ministry said.
These include major trading company Marubeni Corp and Diamond Power Corp, a wholly-owned subsidiary of Mitsubishi Corp . 
Of the nine, only six firms have actually sold electricity to customers with their combined share as of May a mere 0.24 percent of the total market, the ministry said. 
Deregulation has, however, achieved a small measure of success as seen in a decline in power utilities' electricity rates to large-lot customers like shopping centers, analysts say. 
Japan's electricity rates are criticised by users as the highest among members of the Organisation of Economic Cooperation and Development (OECD). 
One of the purposes of deregulation was to lower rates. 
It has also prompted power utilities to step up cost-cutting efforts in a bid to remain competitive, they said. 
Analysts in part blamed the lack of new comers to the limited availability of surplus power generation capacity available. 
"Before deregulation, it was believed that there was ample surplus power around. But the reality turned out differently and new entrants are left desperately seeking power to sell," said Satoshi Abe, senior analyst at the Daiwa Research Institute. 
Moreover most new entrants are hesitant about making large new investments ahead of 2003 when the government is due to review the deregulation process, they say. 
Analysts also note that liberalisation has so far been limited to a slice of the market where rates have traditionally been lowest, making it difficult for new entrants to offer competitive prices. 
"The utilities are cutting rates to large-lot users and will lower rates further in anticipation of more serious competition to come," said Takahiro Morita, senior vice president of Moody's Japan. 
"Under these circumstances, new entrants are not willing to build their own power plants as they are unsure if they will be able to offer competitive rates," he said. 
A government report shows that rates paid by large-lot users to electric utilities during the October to March averaged 11.06 yen per kilowatt-hour (kWh), down 5.39 percent from the previous six months. 
2003 HOLDS THE KEY 
Moody's Morita added that he did not expect many newcomers to enter the power market in the next one or two years and sees the outlook for the sector as stable. 
Some foreign firms, however, have expressed an interest in entering Japan's deregulated power sector. 
In March, Enron presented plans to build a liquefied natural gas (LNG) fired power plant in northern Japan, aiming to become the first foreign company to build such a plant in Japan. 
Analysts said competition could heat up if liberalisation comes to include other sectors after the review in 2003. 
"I think new entrants will increase sharply if deregulation extends to small-scale industrial and commercial users, which is about 60 percent of the market," said Tomohiko Iwasaki, senior analyst at the Japan Research Institute. In a recent report the institute said a futures market could be established if the power market is fully liberalised within the next 10 years. 
This, and other power related business activities could expand the total market market to 100 trillion yen ($808.3 billion) from the current 20 trillion yen, with the futures market worth about 83 trillion yen, or five times actual demand.

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


USA: Energy conflict of interest charges fly in Calif.
By Andrew Quinn

08/02/2001
Reuters English News Service
(C) Reuters Limited 2001.

SAN FRANCISCO, Aug 2 (Reuters) - One California energy official holds $1 million in Enron Corp. stock. Another has a portfolio featuring shares in a cornucopia of big energy firms. Even the governor's chief spokesman put $12,000 into an energy generator. 
As California struggles with its worst energy crisis, the question asked up and down the state is: "What's going on here?"
Consumer groups and Republicans say the answer is simple - conflict of interest among top Democratic officials charged with digging California out of its energy mess. 
But officials in Gov. Gray Davis' office have another answer: a politically inspired "witch hunt" aimed at smearing his administration by implying something is rotten in Sacramento. 
Political analysts say the whirlwind of accusations and exposes threaten to create long-term problems for Davis, who is seen as a potential Democratic presidential hopeful. 
"Some of the conflict of interest disclosures struck me as serious and worthy of closer investigation. Some of them seem to me ludicrous," said Bruce Cain, a political scientist at the University of California-Berkeley. 
"But going into the election, people will ask not if he kept the lights on, but if he got the best deal for California, and found people who really had the state's interests at heart." 
Republicans, whose power has waned in the nation's most populous state, jumped on the story. On Thursday, the California Republican Party demanded a probe into Davis' energy strategy. 
"Governor Gray Davis' office is now mired in what can only be defined as a full-blown scandal," Republican spokesman Rob Stutzman said. "It is time for Gray Davis to step up to the plate and explain what is either corrupt or incompetent." 
REPUBLICAN RIVAL MAKES FIRST CHARGE 
Charges of conflict of interest in the Davis team surfaced last month as Secretary of State Bill Jones - a Republican challenging Davis in next year's election - called for a probe of consultants negotiating long-term energy deals designed to protect California from price swings on the spot market. 
While Davis administration officials initially dismissed the charge as "pure politics", the governor fired five consultants over the weekend after belatedly asking them to file required economic disclosure statements. 
This week Davis's chief spokesman, Steve Maviglio, found himself in the spotlight after newspapers reported he purchased $12,000 worth of stock in Calpine Corp. , a generator which has some $10 billion in long-term power contracts with the state. 
Maviglio said he had no plans to resign and Davis expressed full confidence in his ability to push the case against power companies both denounce as "pirates" and "price gougers." 
But the revelations did not stop there, and journalists have been busy digging up financial details on a raft of Davis appointees that create the impression personal greed is driving California's official energy policy. 
In one case, the San Francisco Chronicle reported that the chairman of the California Energy Commission (CEC), one of the state's top energy regulatory bodies, owned as much as $510,000 in energy company stock at one point last year. 
CEC spokeswoman Claudia Chandler said Thursday that this report contained "significant errors" and tarnished the reputation of CEC Chairman William Keese. While the Chronicle said Keese's holdings were in stock and not the far less legally problematic mutual funds, Chandler said in fact the stock was part of managed portfolios over which Keese had no direct decision-making power. 
Keese, in a letter to the chairwoman of the Fair Political Practices Commission Thursday, said he believed there was no conflict of interest, had ordered the energy stocks sold, and established a blind trust for all future stock investments. 
ANOTHER HEADACHE 
On Thursday, a new headache emerged with reports that an official appointed to help oversee key aspects of California's electricity system owned more than $1 million in the stock of energy giant Enron Corp. - a firm singled out for especially harsh criticism by California politicians. 
Bruce Willison, dean of the Anderson School of Business at the University of California-Los Angeles and Davis' appointee to head the California Electricity Oversight Board, filed financial statements in April showing he had more than 11,000 shares of Enron stock before he became a member of the panel. 
But he said he insulated himself from potential conflicts of interest by giving up his vote on any issues that might affect Enron before the board, which is charged with monitoring electric market activities. 
Berkeley's Cain said the whirlwind of bad publicity over the conflict of interest allegations could undercut the successes Davis has had in staving off blackouts and putting California on a more solid energy footing.

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


U.S. Senate Democrats Vow Fight Over Arctic Drilling (Update2)
2001-08-02 19:11 (New York)

U.S. Senate Democrats Vow Fight Over Arctic Drilling (Update2)

     (Adds comment by Enron lobbyist in 17th through 19th
paragraphs.)

     Washington, Aug. 2 (Bloomberg) -- Senate Democrats say they
will fight letting oil companies into the Arctic National Wildlife
Refuge and want to emphasize conservation over production in
energy legislation moving through Congress.
     The House passed a bill early today that would enact part of
President George W. Bush's plan to increase U.S. energy supplies.
Included was his centerpiece proposal, opening a portion of the
Arctic refuge to oil exploration.
     ``I believe there is overwhelming opposition to it in the
Senate,'' Senate Majority Leader Tom Daschle said of the drilling
provision.
     Daschle and fellow Democrats plan to use energy legislation
to draw distinctions between themselves and Republicans on
environmental issues such as global warming and opening federal
lands to energy companies. They say they will emphasize conserving
energy over drilling and mining.
     Senator John Kerry, a Massachusetts Democrat, has vowed to
filibuster any energy package that includes Arctic drilling. ``It
will never pass the Senate,'' Kerry said.
     Kerry was joined in his threat by Democratic senators Joe
Lieberman of Connecticut and Ron Wyden of Oregon who said they too
will use procedural tactics to force advocates of drilling on
Alaska's North Slope to find 60 votes in the Senate.
     ``Drilling in the Arctic National Wildlife Refuge is the acid
test for whether there is going to be a balanced energy bill
coming out of this Congress,'' Wyden said. The House provision
would be ``kryptonite'' for any final legislation in the Senate,
he said.

                          Global Warming

     Senate Democrats, with support from some Republicans, are
already advancing legislation on several fronts that would
pressure the Bush administration to begin taking steps to cut
greenhouse gas emissions in the U.S.
     The Senate Energy Committee approved a research and
development bill that provides $4 billion over 10 years and ties
future funding for science to reductions in carbon dioxide
emissions. Republicans say that would be a step toward bringing
the U.S. under the 1997 Kyoto accord that Bush opposes.
     The Government Affairs Committee approved a bill sponsored by
senators Robert Byrd, a West Virginia Democrat, and Ted Stevens an
Alaska Republican, that would establish a new White House office
for climate change. The bill would require Bush to develop a
national strategy for responding to global warming.
     The Senate Foreign Affairs also added language to a bill
authorizing State Department programs that calls on Bush to return
U.S. negotiators to talks with 160 other nations under Kyoto.

                            Labor Help

     The Arctic drilling proposal was backed in the House by 186
Republicans, who were helped in their cause by support from the
International Brotherhood of Teamsters and other unions. Thirty-
six Democrats broke with party leaders to vote against a ban on
drilling in the 19 million-acre refuge, which is a breeding ground
for migratory caribou.
     The plan would open up 1.5 million acres for potential
exploration. However the House bill limited permanent drilling
facilities to 2,000 acres.
      Senate Republican leader Trent Lott said he was encouraged
by the role labor played in the House vote. Lott, of Mississippi,
said he thinks if unions can convince a few Democrats in the
Senate to vote for drilling, the Alaskan oil plan might succeed.
     ``I am hoping and assuming that labor can move three or four
Democrats in the Senate, and if they can, we can win on this
issue,'' Lott said.
     Jerry Hood, an energy adviser to Teamsters President James
Hoffa, said unions will keep the pressure on as the Senate opens
debate on its energy bill. ``We're going to double our efforts on
this side,'' Hood said.

                     Win for Energy Companies

     Linda Robertson, vice president of federal government
relations for Enron Corp., said the Houston-based electricity,
natural gas and energy trading company sees the House action as an
``important step toward enactment of the president's energy
plan.''
     The House defeated 274-154 an amendment offered by
Representative Henry Waxman, a California Democrat, that Enron
officials said would impose price controls on the entire West
Coast power grid.
     ``That was particularly important for Enron,'' Robertson
said.
     Senators Dianne Feinstein, a California Democrat, and Olympia
Snowe, a Maine Republican are pushing a measure that would raise
fuel economy standards. It would require automakers to raise sport
utility and pickup trucks from 20.7 miles per gallon to 27.5 miles
per gallon over the next six years.

                      Opposing Fuel Standard

     Republicans, along with vehicle makers such as General Motors
Corp., oppose merging the car and truck fuel efficiency standards.
The House rejected a similar proposal and instead voted to require
manufacturers to save 5 billion gallons of gasoline between 2004
and 2010 by making light trucks more efficient.
     ``We have got to be careful that we not just go for some
arbitrary number,'' Lott said. ``We have got to find balance.''
     The House bill includes $33.5 billion in tax breaks and
incentives for energy production that have bipartisan support,
though budget pressures could force Congress to scale them back.
    The energy policy emerging from this Congress is likely to be
limited because political pressure is diminishing as gasoline
prices recede and the California electricity crisis cools.
     Charles Maxwell, senior analyst at Weeden & Co., Greenwich,
Conn., an adviser to institutional investor, said: ``The
centerpiece of Bush's program was the North Slope. Most of us who
have looked at this politically don't think it has a chance of
going through.''