PBS's Frontline to Air First Television Investigation of California Energy 
Crisis
PR Newswire, 06/01/01

Energy wholesalers on PG&E committee accused of conflict
Associated Press Newswires, 06/01/01

CANADA: Delays could unplug Enron's Ontario power plans.
Reuters English News Service, 06/01/01

USA: NewPower sees savings from smart energy technology.
Reuters English News Service, 06/01/01

Amer Elec Power Completes Houston Pipe Line Buy >AEP ENE
Dow Jones News Service, 06/01/01

California Lawmakers Weigh Plan to Let Business Shoulder Burden of Utility 
Rescue
Dow Jones Business News, 06/01/01

Williams CEO fears bankruptcies in California
Associated Press Newswires, 06/01/01

Saudi Gas Ventures May Offer Promise, Small Returns (Update1)
Bloomberg, 06/01/01



PBS's Frontline to Air First Television Investigation of California Energy 
Crisis

06/01/2001
PR Newswire
(Copyright (c) 2001, PR Newswire)

'Blackout' is a FRONTLINE co-production with The New York Times 
BOSTON, June 1 /PRNewswire/ -- FRONTLINE and The New York Times join forces 
to investigate the story behind the California energy crisis in "Blackout," a 
new documentary airing Tuesday, June 5, at 10 P.M. on PBS (check local 
listings). Through interviews with utility executives, industry insiders, and 
state and federal officials, the one-hour documentary examines how profits of 
both power companies and energy-trading giants have soared amid a 
deregulation process that has produced blackouts and rate hikes for 
consumers. The program also explores why the federal government refused for 
months to intervene in the California crisis, as well as the rationale for 
dismantling the old system of utility regulation.
"Blackout" examines the importance of a new kind of megacorporation: giant, 
national holding companies that trade electricity and gas much like any other 
commodity. With names like Enron, Dynegy, Reliant, and El Paso -- and with 
close ties to high-ranking Republican and Democratic officials -- these 
energy traders have seen their profits explode in recent years even as 
consumers endured power shortages and rate hikes. 
FRONTLINE and The New York Times interview key figures on both sides of the 
energy debate, including Vice President Dick Cheney, California Governor Gray 
Davis, Enron CEO Jeff Skilling, and Curt Hebert, chairman of the Federal 
Energy Regulatory Commission (FERC). State utility executives and citizens' 
advocates, who charge that California's deregulation fell prey to market 
manipulation, are also interviewed. 
Following the broadcast, viewers can learn more about the energy crisis by 
logging on to FRONTLINE's companion "Blackout" Web site -- 
http://www.pbs.org/frontline/shows/blackout. In addition to articles and in- 
depth interviews on the power crunch, the site will feature graphs and 
timelines illustrating the origins of the California crisis, America's 
historical and projected power usage, and the profits of the major power 
companies and energy-trading giants. The site also will offer an analysis of 
the Bush administration's energy plan. 
MAKE YOUR OPINION COUNT - Click Here 
http://tbutton.prnewswire.com/prn/11690X68531669


/CONTACT: Erin Martin Kane of FRONTLINE, 617-300-3500, 
erin_martin_kane@wgbh.org; or Diane McNulty of The New York Times, 
212-556-5244 mcnuldc@nytimes.com/ 12:40 EDT 

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



Energy wholesalers on PG&E committee accused of conflict
By KAREN GAUDETTE
Associated Press Writer

06/01/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

SAN FRANCISCO (AP) - Two of the same energy wholesalers accused of driving 
Pacific Gas and Electric Co. into bankruptcy with high power prices asked a 
federal bankruptcy judge Friday to let them keep selling electricity to the 
utility. 
Critics say that could result in higher bills for ratepayers and less money 
for the rest of PG&E's creditors to share, if the wholesalers' high prices 
keep whittling away at the utility's remaining money.
"We certainly don't believe they should get a safe harbor order so that they 
can do what they've done in the past," said Irving Sulmeyer, an attorney 
representing the city and county of San Francisco. 
Houston-based Enron Corp. and Dynegy Inc., like other power wholesalers, have 
denied gouging Californians on the price they pay for power. 
On Friday, the two companies asked U.S. Bankruptcy Judge Dennis Montali to 
let them keep selling electricity to PG&E's customers via the state 
Department of Water Resources, which has bought electricity on PG&E's behalf 
since January. 
Dynegy and Enron sit on the 11-member creditors committee that will play a 
huge role in how PG&E's fortunes are divided among the more than 50,000 
banks, energy companies and cities to whom the utility owes money. 
The "safe harbor" would shield them from conflict of interest accusations. 
The committee members would be honor-bound not to share information with any 
branches of their companies able to profit from it. 
"They want to be absolved in advance," Sulmeyer said. "What are they so 
concerned about if they're not doing anything wrong?" 
Robert Moore, an attorney representing the voluntary creditors committee, 
said other committee members such as Bank of America and Merrill Lynch also 
are requesting safe harbors so they can continue trading stock and remain 
members. 
"At least four members of the committee would have to resign without it," 
Moore told the judge. 
Montali asked each committee member to file a declaration with the court 
requesting to trade either commodities (electricity) or securities (stock), 
and scheduled another hearing on the issue for June 12. 
--- 
http://www.pge.com 
http://www.canb.uscourts.gov

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


CANADA: Delays could unplug Enron's Ontario power plans.
By Scott Anderson

06/01/2001
Reuters English News Service
(C) Reuters Limited 2001.

TORONTO, June 1 (Reuters) - A planned C$200 million ($130 million) power 
plant for southwestern Ontario may be in jeopardy if the provincial 
government continues to drag its feet on deregulating the province's 
electricity market, the head of Enron Corp.'s Canadian unit said on Friday. 
Enron, the Texas-based energy firm, is slated to build the 400-megawatt Moore 
project near Sarnia, Ontario. But construction of the plant is contingent on 
the government's date for opening the market to competition and time may be 
running out, Ron Milnthorp, president of Enron Canada, told Reuters in a 
telephone interview from Calgary.
"I think we are really looking for a fall date as an optimum time for us to 
align our interests with Ontario," Milnthorp said. 
"If it's put off until spring, I do believe that the project is somewhat in 
jeopardy and would need to be assessed from an operational standpoint against 
all other opportunities that Enron has on its plate." 
Ontario said in April that deregulation would be brought into effect by the 
late spring of 2002, but was accused of raising market uncertainty by not 
setting a specific target date. 
The government may have a better idea of its timetable in September, after a 
key study by the Independent Electricity Market Operator (IMO) and the 
Ontario Energy Board (OEB) is finalized. The two have set up a joint task 
force to prepare for an open the wholesale and retail electricity market. 
Milnthorp said Enron still holds out hope the province will give a target 
date soon after the September study is released. 
"The problem is date certainty. The way things are structured, they have a 
conditional announcement," he said. "We would really like to have a date so 
that we can start investing further capital in that project." 
Although Milnthorp said Enron is "still committed to Ontario," he said the 
company will not invest any further until there is greater certainty. 
"We're on hold at this point," he said. "You can't conditionally invest 
capital. Capital investment is unconditional and we're looking for a date 
that is unconditional also, and I think that is consistent with Enron and 
other outside investors who are going to have the same opinion." 
The company needs about six to 12 months to build the new plant, he said. The 
turbines and most of the required permits are already in place. 
Ontario, Canada's most populous province, has already pushed back its 
original deregulation deadline of November 2000 by one year to try to avoid 
the kind of problems encountered in California and to a lesser extent in 
Alberta. 
California's electricity deregulation has been plagued by skyrocketing costs, 
bankruptcy and rolling blackouts as power demand has increased dramatically, 
while little new generating capacity has been added in the past 10 years. 
In Alberta, consumers have been hit with a series of cost increases as the 
province deregulates its power sector. 
Enron officials say Ontario should not be viewed in the same light as 
California or Alberta. While California's concerns are purely one of supply 
and demand, Ontario already has adequate generating facilities to fuel the 
needs of the province. 
"There are significant differences between Ontario and California and there 
is absolutely no expectation that the scenario that is unfolding in 
California now will unfold in Ontario," said Aleck Dadson, senior director of 
governmental affairs at Enron. 
($1=$1.53 Canadian).

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



USA: NewPower sees savings from smart energy technology.

06/01/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW YORK, June 1 (Reuters) - NewPower Holdings Inc. said it will conduct 
three pilot programs in Philadelphia to test consumers' reaction to "smart" 
energy saving technology. 
With the restructuring of the electricity industry, energy companies expect 
to offer customers new products and services designed to save money and 
conserve energy.
These new products, however, require "smart" meters that tell "smart" device 
to operate when the cost of generating electricity is cheapest. 
Some of these "smart" meters and devices are now available to large 
commercial and industrial consumers but, for the most part, are either too 
expensive or in the development stage for the average homeowner, pending 
testing in pilot programs like the NewPower program. 
"Energy restructuring leads to technological innovation, efficiency and 
environmental benefits," said H. Eugene Lockhart, The New Power Co.'s 
president and chief executive officer. 
Almost all utilities still sell power to residential customers at flat rates 
throughout the day regardless of what that power costs in the wholesale 
market. 
"These pilots are a wonderful example of control being shifted from the 
utility to the consumer. The nation's move to energy restructuring makes it 
possible for consumers to better manage their energy needs," Lockhart said. 
THE PILOT PROGRAMS 
The three pilots consisting of 100 households each will include: a 
time-of-use metering pilot; an HVAC (heating, ventilation and air 
conditioning) load control pilot, and an interactive pilot allowing consumers 
to remotely access their thermostat from any Internet-enabled device. 
New Power said it will install meters in consumers homes in the time-of-use 
metering program. the meters record daily energy use and will enable NewPower 
to better understand typical energy consumption patterns. 
In the HVAC load control pilot, NewPower will install air conditioning 
programmable thermostats in 100 homes to gauge customers' reaction to having 
NewPower remotely alter their thermostat setting by 2 to 6 degrees to help 
the homeowner better manage their energy usage and costs. 
In the remote energy management system pilot, consumers can change their 
thermostat setting from any Internet-accessible device. However, unlike the 
HVAC load control pilot, NewPower said the customer always remains in control 
and may override the adjustment at any time from the Web or a wireless 
device. 
The pilot programs will run from early June to the end of September - the 
peak season for energy consumption when air conditioning pushes electric 
demand to annual peaks. 
NewPower Holdings, based in Purchase, N.Y., through its subsidiary The New 
Power Co., is the first national provider of electricity and natural gas to 
residential and small commercial customers in the U.S. 
- Scott DiSavino, New York Power Desk, +646-223-6072, fax +646-223-6079, 
e-mail scott.disavino@reuters.com.

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


Amer Elec Power Completes Houston Pipe Line Buy >AEP ENE

06/01/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

COLUMBUS, Ohio -(Dow Jones)- American Electric Power Co. (AEP) completed the 
purchase of Houston Pipe Line Co. from Enron Corp. (ENE) for $726.6 million. 
In a press release Friday, American Electric said it will raise the money for 
the acquisition by issuing a noncontrolling, preferred equity stake to 
private investors.
The acquisition included Houston Pipe Line's inventory and a 30-year pre-paid 
lease for the Bammel storage facility. American Power now has daily gas 
capacity of about 3.2 billion cubic feet and more than 6,400 miles of natural 
gas pipeline across Louisiana and Texas. 
New York Stock Exchange-listed shares of American Electric closed Friday at 
$49, down $1.20, or 2.4%, on composite volume of 1 million shares, about 12% 
higher than average daily volume. 
Company Web site: http://www.aep.com 
-Pamela Tate; Dow Jones Newswires; 201-938-5400

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


California Lawmakers Weigh Plan to Let Business Shoulder Burden of Utility 
Rescue
By Jason Leopold

06/01/2001
Dow Jones Business News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Dow Jones Newswires 
LOS ANGELES -- Lawmakers in California are mulling yet another set of ideas 
for rescuing embattled utility Southern California Edison, and this time 
businesses would be on the hook.
In an attempt to deflect charges of a bailout that have thus far stymied 
efforts to restore the Edison International (EIX) unit to solvency, 
legislators are now considering ways to shift the burden of financing the 
rescue from residential ratepayers to the state's largest businesses, aides 
to key state lawmakers said this week. 
The ideas being worked over by Senate President Pro Tem John Burton, Assembly 
Speaker Robert Hertzberg and Assemblyman Fred Keeley have yet to take shape 
as formal proposals. But an aide to Mr. Burton said some key lawmakers are so 
"desperate" to keep Southern California Edison from following PG&E Corp. 
(PCG) unit Pacific Gas & Electric Co. into a bankruptcy filing that they are 
willing to consider anything that will take residential consumers out of the 
equation. 
"The idea is that the large industrial customers are the ones who pushed for 
deregulation in the first place, so they should be responsible for bailing 
out Edison," the aide said. "We're looking to take the burden off of 
residential ratepayers." 
The premise of a plan discussed by lawmakers Thursday is to designate 
Southern California Edison's largest commercial ratepayers as non-core 
customers. Those customers -- some 3,600 users of more than 500 
kilowatt-hours a month -- would be responsible for financing the cost of 
power the utility must purchase or have purchased for it in the wholesale 
market. The non-core customers would also help the utility recoup most of its 
$5.5 billion in unrecovered power costs through a surcharge on their bills. 
Core residential customers would be protected from the wholesale power market 
as the primary beneficiaries of the low-cost power the utilities generate 
themselves or have locked up in long-term contracts. 
The core/non-core proposal is one of several being discussed by lawmakers as 
alternatives to a memorandum of understanding California Gray Davis struck 
with Edison in April. The pact -- which doesn't vary much from an agreement 
in principle reached in February - - has been called dead on arrival by some 
lawmakers, who have been mulling various alternatives rather than moving the 
agreement forward. 
Dominic DiMare, a lobbyist with the California Chamber of Commerce, said the 
chamber has told the Davis administration that shifting the burden of the 
Southern California Edison bailout to businesses is "a very bad idea" that 
could cost the state billions of dollars in economic activity. 
"This (plan) would really screw businesses," Mr. DiMare said. "We just got 
hit with a 50 to 90% rate increase. We're dangerously close to losing our 
businesses to other states." 
Separately, Enron Corp. (ENE) has been lobbying lawmakers for several weeks 
to win approval to sign power-supply contracts with Southern California 
Edison's largest commercial customers, leaving the utility to serve just its 
residential customers and small businesses, aides to Gov. Gray Davis, Mr. 
Burton and Mr. Hertzberg said. 
An Enron executive confirmed that the company sent a four-page proposal to 
Hertzberg proposing that Southern California Edison's large industrial 
customers sign so-called direct-access contracts with Enron. Enron also has 
recently made a presentation about direct access to some members of the 
California Chamber of Commerce. 
Under the proposal, heavy users would be required to contract directly with 
companies like Enron for their power. 
Direct access was a key part of the state's 1996 deregulation plan, but was 
scrapped early this year when the state started buying wholesale power in 
place of the utilities. 
Write to Jason Leopold at jason.leopold@dowjones.com 
Copyright (c) 2001 Dow Jones & Company, Inc. 
All Rights Reserved.

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


Williams CEO fears bankruptcies in California

06/01/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

TULSA, Okla. (AP) - Allegations of price fixing are locking energy suppliers 
out of efforts to solve California's power squeeze, the head of a Tulsa-based 
energy provider says. 
"We have been demonized to the point that we are not a credible voice 
politically," said Keith Bailey, chairman, president and chief executive 
officer of Williams.
California energy regulators say they are close to finishing probes into 
whether electricity wholesalers illegally manipulated the power market, 
driving up prices. 
The Federal Energy Regulatory Commission earlier this year alleged that 
Williams profited from the closure of two Southern California power plants 
owned by a business partner, Arlington, Va.-based AES Corp. 
Williams admitted no wrongdoing but refunded $8 million to settle the 
charges. 
California's inv-estigations are examining the conduct of Williams, as well 
as that of other wholesalers, including Houston-based Enron Corp., Dynegy 
Inc., and Reliant Energy, Charlotte, N.C.-based Duke Energy and Atlanta-based 
Mirant Corp. 
Bailey said California owes Williams more than $600 million for electricity 
sold to the state. 
He said California lawmakers must act soon if they want to keep the state's 
struggling electric utilities from going bankrupt. Bailey said the matter 
could be assigned to a bankruptcy judge if lawmakers fail to establish a plan 
to restore the financial health of those utilities. 
Williams supports short-term price controls to get the utilities back on 
track. The company also supports Gov. Gray Davis' efforts to pass legislation 
that would help Southern California Edison, the state's second-largest power 
provider, pay its debts. 
California's largest utility, Pacific Gas & Electric, rejected a similar deal 
and filed for bankruptcy protection.

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


Saudi Gas Ventures May Offer Promise, Small Returns (Update1)
2001-06-01 14:26 (New York)

Saudi Gas Ventures May Offer Promise, Small Returns (Update1)


     (Updates first, second paragraphs to reflect that Enron quit
the project. Adds quote in 18th paragraph.)

     London, June 1 (Bloomberg) -- Exxon Mobil Corp., BP Plc,
Royal Dutch/Shell Group and four other energy companies are set to
spend $25 billion on Saudi Arabian natural gas ventures that some
analysts say may barely meet managements' profit targets.
     Along with Total Fina Elf SA, Conoco Inc., Phillips Petroleum
Co. and Occidental Petroleum Corp., the partners are scheduled to
sign agreements this weekend for the three projects. Their annual
return on investment may at best be 15 percent, a level some
companies call the minimum to justify spending, analysts said.
     ``Fifteen percent might be a limit,'' said Jon Wright, an
analyst at Merrill Lynch & Co. ``But maybe they are taking the
view that, `We need to be here, we have to be here and it's a
major, important area.'''
     Flush with cash -- Exxon, Shell and BP alone posted net
income of $41.5 billion last year -- oil companies are seeking the
best ways to meet annual growth in energy demand while maximizing
profits. Saudi Arabia has said those who help now will likely get
first crack at the nation's oil fields, the world's largest,
should they open to foreigners.
     Executives from the seven partners are scheduled to sign the
agreements Sunday in the Red Sea coast city of Jeddah, ending
years of talks and marking the return of Western oil companies to
the kingdom for the first time in two decades. Financial terms of
the ventures are to be negotiated later this year.
     ``It's unlikely to contribute to the bottom line in the short
term,'' said Roger Richards, who helps manage more than 3 billion
pounds ($4.26 billion) in the U.K. for Prudential Bache Ltd.
clients. Still, ``it's important to the majors to be in such an
important gas province when it's potentially the door to getting
back into Saudi oil.''

                           Further Talks

     Development of gas fields to fuel power plants and water
desalination factories is part of Saudi Arabia's plan to convert
its power industry from running on oil to gas. The nation wants to
free more crude oil for export and provide jobs for the estimated
15 percent of the population who are unemployed.
     Many analysts said the return on investment will barely match
the companies' targets -- in Shell's case, 15 percent return based
on oil prices at less than half of today's levels.
     U.S. brokerage Fahnestock & Co. estimates returns from the
Saudi projects at 10 percent to 15 percent. Deep-water oil and gas
drilling can pay back 40 percent a year, said J.J. Traynor, an
analyst at Deutsche Bank AG in Edinburgh, Scotland.
     ``The line in the sand for the major oils is a 15 percent
return -- they won't go below that,'' Traynor said. ``In the long
term, maybe oil becomes available. That's 10 or 20 years away, but
you have to be there now.''
     Lee Raymond, Exxon's chairman and chief executive, has said
he expects returns from the Saudi ventures in the ``mid to high
teens.'' That's lower than the 20.6 percent return on capital
Exxon posted last year and rival BP's 23 percent return, when
adjusted for special items.


                         Little Risk

     The benefits of going into Saudi are twofold, analysts said.
Firstly, the winners will have a lead should the country open
access to its crude oil reserves.
     Secondly, the projects carry little risk compared to
exploratory drilling that can cost millions for nothing more than
a hole in the ground. Much of the Saudi reserves are already
mapped, and the government understands it needs Western capital
and expertise.
     ``It's in the Saudis' interests to get Western oil companies
involved again,'' said Will Claxton-Smith, director of U.K.
equities at Clerical Medical Investment Group Ltd., which owns BP
and Shell shares. ``You wouldn't want them to be left out.''
     The kingdom has not yet named the leaders of the $17 billion
South Ghawar gas project, the centerpiece of its plan, or the $4
billion Shaybah field.
     Companies selected for these two developments include Exxon,
Shell, BP, Phillips, Conoco and Total. Saudi Arabia picked Exxon
to lead the estimated $4 billion Red Sea gas development project,
with Occidental and Enron Corp. as junior partners.

                            Enron Quits

     Enron today withdrew from the venture, leaving partner
Occidental to absorb its role, Enron spokesman Alex Parsons said.
He declined to say why Enron pulled out. The company has been
moving away from large infrastructure projects to focus on trading
natural gas, electricity and other commodities.
     ``If we have a continued association with this project, it
will be to provide services under a separate contract directly
with Occidental,'' Parsons said.
     Once the ink dries this weekend, financial negotiations
between the kingdom and the companies should take months, analysts
said.
     ``The companies are keen to get their foot through the door
but they're not going to throw shareholders' money away,'' said
Leo Drollas, deputy executive director of the Centre for Global
Energy Studies, which was founded by former Saudi oil minister
Sheikh Zaki Yamani. ``They are not philanthropic institutions. If
they're not happy, they won't do it.''