Electricity Cost Data Spread the Blame Power: Many suppliers charged more 
than the firms that Davis has pilloried, records show.
Los Angeles Times, 07/10/01

Duke Energy Asked to Allow Release of Data Power: Senator says the generator 
is refusing to make public some information crucial to the price-gouging 
probe. Firm says it's complying.
Los Angeles Times, 07/10/01

California to get plan for refunds 
Houston Chronicle, 07/10/01

INDIA: CEO of Enron's Indian unit Dabhol quits.
Reuters English News Service, 07/10/01

US Enron Chmn Confirms India Dabhol Pwr CEO's Resignation
Dow Jones Energy Service, 07/10/01

Enron's Kenneth Lay on its $3 Bln Indian Power Project: Comment
Bloomberg, 07/10/01

MORE WORK NEEDED TO REVIVE INDIA'S DABHOL PROJECT: ENRON CHIEF
Asia Pulse, 07/10/01

Tropic Networks reveals investors: $60-million financing
National Post, 07/10/01

India: New engg consultant for Enron project likely
Business Line (The Hindu), 07/10/01

India: Centre firm on Dabhol
Business Line (The Hindu), 07/10/01

Enron has no immediate plan to quit India, says Lay
Business Standard, 07/10/01

Enron seeks CII's help on Dabhol
Business Standard, 07/10/01

Enron takes some heat, but rates a `buy'
Chicago Tribune, 07/10/01

Power Producers' 2Q Bolstered By April, May Prices
Dow Jones News Service, 07/09/01

Enron's Kenneth Lay on India's Dabhol Power Project: Comment
Bloomberg, 07/09/01

Prosecutors to Get Reliant, Mirant, Dynegy Documents (Update1)
Bloomberg, 07/09/01




California; Metro Desk
Electricity Cost Data Spread the Blame Power: Many suppliers charged more 
than the firms that Davis has pilloried, records show.
RICH CONNELL; ROBERT J. LOPEZ; DOUG SMITH
TIMES STAFF WRITERS

07/10/2001
Los Angeles Times
Home Edition
B-1
Copyright 2001 / The Times Mirror Company

SACRAMENTO -- California's energy meltdown involves a far more diverse group 
of wholesale electricity merchants than suggested by Gov. Gray Davis, who has 
aggressively blamed a handful of Texas companies, state records show. 
During the first three months of this year--one of the worst stretches of 
power shortages during the crisis--an assortment of public and private 
entities charged the state prices averaging well above some of those paid to 
Texas firms, according to documents released to The Times on Monday by the 
Department of Water Resources, which now buys power for California.
Among those setting and collecting some of the highest average prices per 
megawatt-hour were a Canadian public utility, a subsidiary of San Diego Gas & 
Electric's parent company, and the Los Angeles Department of Water and Power, 
the report shows. Their average prices ranged from $498 a megawatt-hour 
charged by Powerex, the trading arm of British Columbia's BC Hydro, to $292 
an hour by the DWP. 
In fact, some of the biggest private power companies singled out for 
criticism by Davis and other state officials--Dynegy Inc., Duke Energy and 
Mirant--charged less than the average prices the state paid for the period. 
Those companies' average prices ranged from $146 to $240 per megawatt-hour, 
according to an analysis of the documents. 
The figures cover the various types of spot and longer-term power purchased 
by the state during three months that included rolling blackouts and more 
than a month of razor-thin reserves, leading to continuous power emergencies. 
Davis spokesman Steve Maviglio said the governor has directed his sharpest 
barbs at private out-of-state generators because, in general, they have 
reaped the highest profits over the longest period. 
"You have to look at the whole picture," Maviglio said. 
"The governor was expressing his displeasure with the arrogance of the 
generators who wear cowboy hats," he said. "Their profits were 100% to 400% 
above last year. . . . Just because there are other entities who are charging 
us more [per megawatt-hour] doesn't change the fact that we are getting 
ripped off by companies from Houston, Tulsa, Atlanta or Charlotte." 
The report by the Department of Water Resources was provided to The Times on 
the same day the state released 1,700 pages of documents on California's 
electricity purchases on the volatile spot market for the year's first 
quarter. 
The records detail how the state spent nearly $8 billion buying power in the 
first five months of the year, and underscore the complexity of the state's 
energy problem. They also show that patterns of high prices are not limited 
to a few generators. 
Oscar Hidalgo, a spokesman for the water resources agency, said that the 
reports together show that prices were extremely volatile early in the year. 
"All the prices were high," he said, noting the downward trend in costs since 
his agency began buying power in mid-January. 
The average price per megawatt-hour for all state purchases went from $316 in 
January to $243 in May. Spot prices fell from an average of $321 per hour to 
$271, the reports show. 
In the first quarter of the year, some public entities' prices far exceeded 
those of the biggest private companies. For example, Houston-based Enron, one 
of the nation's biggest power traders, charged an average of $181 per 
megawatt-hour. And Atlanta-based Mirant, which sold the most to the state, a 
total of $706 million, charged an average of $225 per megawatt-hour. 
By contrast, a Calgary, Canada, firm, TransAlta Energy, averaged $335 a 
megawatt-hour, and the Sacramento Municipal Utility District had average 
charges of $330 per megawatt-hour. 
A spokesman for Enron, Mark Palmer, said recently that the "vilification of 
Enron was based on politics, not facts." Spokesmen for BC Hydro could not be 
reached late Monday to comment on its huge sales to the state. In the past, 
the utility has defended its pricing practices, saying it has offered 
last-minute hydroelectric power that helped keep California's lights on. 
A spokeswoman for Sempra, the parent company of San Diego Gas & Electric, 
said late Monday the company was unable to comment because it had yet to see 
the figures released by the state. Officials at DWP, who could not be reached 
Monday evening, have defended their pricing, saying the costs of producing 
the power needed by the state were extremely high. 
More Power Bought Than Projected 
Hidalgo, of the Department of Water Resources, said his agency's efforts, 
coupled with conservation by business and consumers and falling natural gas 
prices, have begun to tame the state's market. 
Still, the state had to purchase $321 million in power in April and May, 
about 10% more than Davis' analysts had projected. 
Hidlago said that was because of hot weather in May and other supply problems 
in April. He said reports will show that power purchases fell short of state 
projections in June and early July. 
The reports also will show that prices paid by the state were down in June 
and July, partly because spot prices have fallen sharply, often to well under 
$100 a megawatt-hour. 
A summary Department of Water Resources report released Monday credited 
Davis' program of nurturing new power generation and establishing long-term 
power contracts with with "moving the California electric energy industry 
closer to normalcy."

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


California; Metro Desk
Duke Energy Asked to Allow Release of Data Power: Senator says the generator 
is refusing to make public some information crucial to the price-gouging 
probe. Firm says it's complying.
CARL INGRAM
TIMES STAFF WRITER

07/10/2001
Los Angeles Times
Home Edition
B-8
Copyright 2001 / The Times Mirror Company

SACRAMENTO -- The chairman of a Senate committee probing suspected price 
gouging during the California energy crisis charged Monday that Duke Energy 
is refusing to allow him to make public information key to his investigation. 
Sen. Joe Dunn (D-Santa Ana) said Duke has made the price bidding information 
from its Chula Vista plant available to committee members and staffers. But 
under a federal confidentiality rule, the data cannot be made public without 
Duke's consent.
The documents concern the Chula Vista plant, which former employees have 
alleged was ramped up and down to drive up power prices during three days in 
January. However, state records show that the agency overseeing the 
electricity grid ordered those gyrations to keep the power flowing throughout 
the state. 
Dunn said Duke's refusal thwarts the committee's investigation and efforts to 
enact possible remedial legislation because the confidential information 
cannot be shared with others in the Legislature or the public. 
Dunn said Duke cited a rule of the Federal Energy Regulatory Commission that 
gives the company the authority to decide which records it makes public and 
which stay secret. 
"The only one who can release the data is Duke. We agreed to be bound by what 
is provided in the FERC tariff, nothing more or less," he said. 
Former Employees Tell of Maneuvers 
Dunn noted that the committee is considering trying to obtain the information 
elsewhere and "release it over Duke's objections." 
Three former workers at the Duke plant near Chula Vista testified last month 
under oath that the plant, among other things, was ramped up and down in what 
seemed to be an effort to maximize revenue during the Jan. 16-18 emergency. 
But Duke countered immediately that it had merely obeyed orders of the 
California Independent System Operator, which keeps the state's electricity 
grid in balance. Duke later provided Cal-ISO documents backing up its 
explanation. 
Duke executives insisted that the former employees failed to provide a full 
picture of the plant's operation during the three days. 
But Dunn, chairman of the select Senate committee on alleged price gouging, 
said Monday that by refusing to authorize release of all the subpoenaed data, 
Duke was guilty of the same tactics. 
"Duke is trying to draw the impression that it has [provided] the full 
picture. But they are fully aware that we cannot draw any final conclusions 
until all that data has been released. That hasn't occurred," Dunn said. 
To make a determination whether the Chula Vista power was withheld to drive 
up prices, Dunn said, the committee must publicly examine "the bids Duke 
submitted from which the ISO issued orders to the plant." They include the 
expensive hour-ahead and day-ahead markets, he said. 
Duke, a North Carolina-based wholesaler that operates several plants in 
California, noted that it considers the information proprietary and 
off-limits to legislators not on the committee. 
Duke spokesman Tom Williams insisted that the generator is attempting to 
comply with the committee's demands. But he was unable to say whether Duke 
would agree to make the bidding documents public along with other records the 
committee plans to turn over. 
"We are complying now," Williams said. "There is some suggestion that we are 
leaving stuff out when we have not had a chance to testify. . . . I don't 
know what we are ultimately going to do." 
The committee had threatened to cite eight wholesale generators unless they 
provide pricing and bidding documents by Wednesday. Six, including Duke, have 
said they would comply to avoid a contempt citation. Two, Enron and Mirant, 
were cited. 
Dunn said the committee on Wednesday likely will give companies that are 
trying to comply an extra week to do so, but others probably will be formally 
charged with contempt in a report to the full Senate. The upper house is the 
final arbiter of such issues. 
Although there is scant precedent for levying penalties against those cited 
for contempt, Dunn said he favors imposing severe fines. In 1929, the most 
recent case, a cement company executive was sent to jail.

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






July 10, 2001
Houston Chronicle
California to get plan for refunds 
Officials celebrate judge's proposition 
By DAVID IVANOVICH and LAURA GOLDBERG 
Copyright 2001 Houston Chronicle 
WASHINGTON -- Power companies failed Monday to reach agreement with 
California over how much to pay in refunds for alleged overcharging during 
the state's electricity crisis. 
And so the judge who tried to mediate those talks will recommend a plan that 
would generate "hundreds of millions, and maybe $1 billion" worth of refunds, 
a far cry from the $8.9 billion California has demanded. 
A marathon, 15-day negotiating session between California and a collection of 
power generators that included Houston-based Reliant Energy, Enron Corp., 
Duke Energy North America, Dynegy and El Paso Corp. ended without the parties 
coming close to clinching a deal. 
"In 15 days you can't work miracles," said Curtis L. Wagner, the 
administrative law judge overseeing the talks at the Federal Energy 
Regulatory Commission. 
As a result, Wagner will propose the five-member commission adopt a plan that 
would result in at least some refunds for power sold between October 2000 
through May. 
California officials quickly seized on that point to claim victory. 
Michael Kahn, head of the California Independent System Operator, called 
Wagner's plan a "ringing endorsement" of his states' claims that refunds are 
necessary. 
But Wagner's methodology for determining how those refunds should be 
calculated tilted toward the power generators' position in many key respects, 
hence the wide disparity between his ballpark estimates and California's 
claims. 
Wagner noted that he had not run the numbers under his methodology. Instead, 
he will recommend regulators hold hearings within 45 to 60 days to determine 
exact refund totals. 
California officials insisted the final refund dollars will total "multiple 
billions." And they left open the very real possibility they will sue in 
federal court to recoup the remaining dollars they believe they are owed. 
California Gov. Gray Davis, who has been a vociferous critic of the 
commission, went on the offensive again Monday. 
"While in the past the FERC has shown little, if any, interest in consumers, 
they now have the opportunity to redeem themselves by returning the $8.9 
billion California has demonstrated it is owed," Davis said in a prepared 
statement. 
During the negotiations, the electric power companies, marketers and other 
suppliers offered to pay $716.1 million, never coming anywhere close to 
California's demands. 
"Not surprisingly, the energy pirates that bilked rate payers out of billions 
of dollars stonewalled and refused to negotiate in good faith with our team 
in Washington," Davis said in his last salvo at the out-of-state generators. 
California wanted Reliant, for instance, to pay $376 million in refunds, said 
John Stout, senior vice president for asset commercialization for Reliant's 
Energy Wholesale Group. 
But that's nearly three times the $127 million operating margin the company 
garnered from its California operations between October and May, according to 
a filing the company made with the Securities and Exchange Commission last 
week. 
Stout said Reliant offered to pay slightly less than $50 million. 
"We were essentially offering to refund one third of the operating margin 
over the relevant period," Stout said. 
But Davis contends: "The energy generators and suppliers refused to recognize 
their responsibility to the people of California and own up to their 
profiteering." 
California's claims for $8.9 billion include sales starting in May 2000. But 
Wagner only considered claims from October onwards. That meant $3 billion of 
California's claims were not part of the settlement talks. 
"For California to continue this bogus claim of $8.9 billion, I think just 
shows that they are not interested in any kind of a settlement," Enron 
spokesman Mark Palmer said. "They are just interested in creating a whipping 
post. The last thing that the political leadership in California wants to do 
is take responsibility for the problem they created." 
Joel Newton, regulatory counsel for Dynegy and a spokesman for a coalition of 
generators, argued that California's analysis did not account for last year's 
rise in natural gas prices, high environmental costs and transportation 
constraints for both electricity and natural gas. 
The settlement talks were organized not only to try to resolve the 
differences over refunds but other outstanding disputes stemming from 
California's power debacle. 
California, trying to move away from its dependence on power purchases from 
the spot market, has been trying to line up long-term power contracts. 
As of June 12, the state had signed deals totaling $42.8 billion with 18 
different suppliers. As a result, California purchased only 1.9 million 
megawatt hours of power on the spot market, down from 4 million in May. 
But with a slew of civil and potentially criminal investigations, some power 
companies have been loathe to sign long-term deals while those disputes are 
still outstanding. 
The power companies pushed, as part of the settlement negotiations, to have 
those other investigations dropped. But California officials refused. 
"We're disappointed that we were unable to reach a global solution," said 
Dynegy spokesman Steve Stengel. 
California is not the only Western state seeking refunds. Other states in the 
region have their own claims, totaling more than $6 billion. 
Wagner has proposed holding a separate negotiating session for those states, 
arguing that their concerns had been given short shrift in the settlement 
talks because of the central battle with California. 






INDIA: CEO of Enron's Indian unit Dabhol quits.

07/10/2001
Reuters English News Service
(C) Reuters Limited 2001.

BOMBAY, July 10 (Reuters) - The president and chief executive officer of 
Enron Corp's Dabhol Power Company, which is involved in a drawn out row with 
an Indian utility, has quit following the expiry of his contract, a Dabhol 
spokesman said on Tuesday. 
Neil McGregor, who has been involved in crucial discussions to solve a more 
than six-month-old dispute with the Maharashtra State Electricity Board 
(MSEB) over payment defaults and high tariffs, will leave for Singapore soon 
to pursue other opportunities, the spokesman added.
"My contract expired on June 30. I have decided against its renewal and will 
pursue other challenges elsewhere in the global utility sector," McGregor 
told the Press Trust of India. 
The wrangle has affected India's image among foreign investors and threatens 
nearly $3 billion of foreign investment. 
Dabhol is building a $2.9 billion, 2,184 MW plant in the western Indian state 
of Maharashtra in two phases. The first phase of 740 MW is up and running, 
while the second phase of 1,444 MW is 97 percent complete.

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


US Enron Chmn Confirms India Dabhol Pwr CEO's Resignation

07/10/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI -(Dow Jones)- U.S. energy major Enron Corp.'s (ENE) chairman, 
Kenneth Lay, confirmed Tuesday the resignation of Neil McGregor, president 
and chief executive of Enron India's subsidiary Dabhol Power Co. 
"Yes, Mr. McGregor's contract with us ended, and he decided to move on on his 
own. He did a good job with us," Lay told reporters.
Earlier Tuesday, India's Economic Times reported McGregor had stepped down 
from his post "to pursue other projects." 
Enron India's managing director, K. Wade Cline, will assume the additional 
responsibility of managing operations of Dabhol Power, the report said. - - 
10/07/01 07-12G 

Lay said a meeting with Federal Finance Minister Yashwant Sinha earlier 
Tuesday aimed at resolving a prolonged payments dispute between DPC and its 
principle buyer, the Maharashtra State Electricity Board, ended 
inconclusively. 
"We discussed the problems of the Dabhol project. We discussed the avenues to 
end those problems. We haven't come to any conclusion today. We didn't expect 
to come to any conclusion today. We're certainly very hopeful that the 
problems of Dabhol Power Co. can, and will be resolved fairly quickly," Lay 
said. 
Enron Corp. has a 65% controlling stake in the US$2.9 billion Dabhol Power 
Project, India's single largest foreign investment. Other shareholders 
include General Electric (GE) with 10% and Bechtel Group Inc. (X.BTL) with 
10%. 
The MSEB has defaulted on payments totaling US$48 million to DPC, which was 
providing electricity from its 740 megawatt power plant located south of 
Maharashtra's capital, Bombay. 
In May, Enron served a preliminary termination notice on the MSEB, which 
stopped buying power from Dabhol. 
DPC said in June that contractors halted work on Phase II due to payment 
defaults. Continuing defaults by the MSEB is making it almost impossible for 
DPC's lenders to disburse additional funds for Phase II construction. 
The stoppage will add to overall project cost, Lay said, adding this was 
beyond the company's control. 
Lay said construction of Phase Two, including the company's liquified natural 
gas import facility, is 85% complete. 
-By Himendra Kumar, Dow Jones Newswires; 91 11 4619426; 
himendra.kumar@dowjones.com

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


Enron's Kenneth Lay on its $3 Bln Indian Power Project: Comment
2001-07-09 09:56 (New York)


     New Delhi, July 9 (Bloomberg) -- Kenneth Lay, chairman of
Enron Corp., the world's biggest energy trader, on its $3 billion
India unit Dabhol Power Co.
     Lay met India's Power Minister Suresh Prabhu in New Delhi
today. He was accompanied by Wade Cline, managing director of
Dabhol Power.

     ``We had a productive conversation. Obviously there are
problems and differences and they need to be solved.''

     Dabhol and the Maharashtra State Electricity Board, its only
customer, have been quarrelling for the past seven months over
unpaid bills. The board no longer buys power from the unit and
construction work on the second phase of the plant was stopped
last month after lenders stopped funding it.

     ``We are working hard and are committed to finding a solution
for investors'' in the project, India's biggest foreign direct
investment yet.
     ``It's premature to say whether we will pull out'' of the
project. ``We have been and remain committed to India.''



MORE WORK NEEDED TO REVIVE INDIA'S DABHOL PROJECT: ENRON CHIEF

07/10/2001
Asia Pulse
(c) Copyright 2001 Asia Pulse PTE Ltd.

NEW DELHI, July 10 Asia Pulse - Enron Corporation said that more work was 
needed to review its controversial Dabhol power project, which is embroiled 
in a payment dispute with Maharashtra State Electricity Board. 
"We did not come to any conclusion and we did not expect to come to any 
conclusion. More work is required by us and the government to review the 
project," Enron Corporation Chairman Kenneth Lay told newspersons after 
meeting Finance Minister Yashwant Sinha.
Enron promoted Dabhol Power Company (DPC) and MSEB are locked in a payments 
dispute which provoked Enron to serve a preliminary termination notice to the 
utility, which in turn stopped buying power from 740-MW phase-I of Dabhol 
project. 
The US energy giant, which holds 65 per cent interest in DPC, has stopped 
construction of the 1,444 MW second phase of the project after completing 85 
per cent of the work, Lay said. 
"It is in the government's and the country's interest to revive the project," 
he said while expressing optimism that an amicable solution to the problem 
would be found soon. 
Lay, who had a two-hour long meeting with Power Minister Suresh Prabhu 
yesterday to discuss the fate of the project, said that the solution should 
take care of the interests of both India and investors. 
Lay, who flew here yesterday, would meet Maharashtra Chief Minister Vilasrao 
Deshmukh tomorrow in a bid to resolve the stand-off with MSEB. 
(PTI) 10-07 1942

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



Financial Post: Canada
Tropic Networks reveals investors: $60-million financing
Kim Hanson
Financial Post

07/10/2001
National Post
National
C04
(c) National Post 2001. All Rights Reserved.

Tropic Networks Inc., an Ottawa-based optical networking firm, will announce 
today that Enron Broadband Services, a subsidiary of Enron Corp. and Anschutz 
Investment Co. were key investors in Tropic's previously announced 
US$60-million financing. 
Enron is the biggest energy trader in North America. Anschutz Co. is the 
financial arm of Anschutz, based in Denver. Tropic Networks makes hardware 
and software that allows major telecommunication companies to deliver 
high-bandwidth data over fibre-optic lines.
In February, the company announced the financing, which still ranks as one of 
the largest financings to be completed in 2001 by a privately held Canadian 
firm. The company will use the proceeds to expand marketing, sales and 
research efforts. 
Anschutz and Enron are members of Tropic's investor partner team, which 
includes Crescendo Ventures, a US$1-billion venture firm in Palo Alto, 
Calif., Goldman Sachs, Altamira, Raza Venture Funds, Celtic House 
International, Kodiak Venture Partners and the Ontario Teachers' Pension Plan 
Board, all of which invested in the latest round. To date, Tropic Networks 
has raised US$67-million through two rounds of financing.

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


India: New engg consultant for Enron project likely

07/10/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

MUMBAI, July 9. INDIAN lenders to Enron's power project are likely to appoint 
a new engineering consultant to work out the cost of different alternatives 
to complete the Dabhol power project. 
According to sources, Stone and Webster (S&W), the consultant which was given 
the mandate to work out the costs of different options to complete the 
project has not got back with its revised report. S&W was given the mandate 
after a meeting of all lenders to the project in Singapore on June 5 and 6.
However, the lenders were not happy with the consultant as it had delayed the 
report and had also failed to get the figures ratified by Enron. Even though 
the lenders wrote to S&W asking it to rework the report, the consultant has 
not done so, the sources said. Therefore, the lenders may change the 
consultant, they said. 
Meanwhile, the lenders are hoping that the Chairman of Enron Corporation, Mr 
Kenneth Lay, would be able to thrash out a solution to the crisis. 
According to sources, Mr Lay would be in a better position to take hard 
decisions such as taking a hit on returns to reduce the cost of power 
generated by Dabhol Power Company (DPC). But they said the company is 
unlikely to back down on the demand for lifting the entire power produced by 
it. 
The Enron Corporation chief is scheduled to meet the Maharashtra Chief 
Minister, Mr Vilasrao Deshmukh, tomorrow. Mr Lay, who is in Delhi meeting 
with Union Ministers and bureaucrats, will reach here on Tuesday. 
Mr Vinay Bansal, Chairman, Maharashtra State Electricity Board, and Mr Vinay 
Mohan Lal, State Energy Secretary, are also likely to attend the meeting, 
sources said. 
He would meet Indian lenders on Wednesday. According to sources, he will meet 
the IDBI Chairman, Mr S.K. Chakrabarti. It is, however, not known if 
representatives of other lenders would be present. Mr Lay's meeting with the 
Chief Minister assumes an added significance as the Democratic Front 
Government is toying with the idea of ordering a judicial probe into the 
Enron issue. A decision on the issue was to be taken at the meeting of the 
Democratic Front Co-ordination Committee last week. However, a final decision 
was postponed to July 11. 
Mr N.D. Patil, Convenor of the Democratic Front, told Business Line that the 
July 11 meeting would be the last one on this issue. "We would not have 
another meeting on Enron. Whatever be the decision, it would be made on July 
11," Mr Patil said. 
According to sources, at the last co-ordination panel meeting, a decision had 
almost been taken to order a judicial probe. However, it was deferred at the 
last minute, probably in view of Mr Lay's visit, they said. 
Dinesh Narayanan

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


India: Centre firm on Dabhol

07/10/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

NEW DELHI, July 9. THE Centre today stuck to its guns and refused to 
entertain Enron worldwide chief, Dr Kenneth Lay's request for buy-out of the 
plant by a Central utility. 
In a meeting spanning nearly two hours between the Enron Chairman, Dr Lay, 
and the Power Minister, Mr Suresh Prabhu, the former sought an expeditious 
process to resolve the Dabhol issue either way.
Sources pointed out that the Enron chief had requested the Government to firm 
up a solution within the next two-to-three months to enable the company to 
take an investment decision on the Dabhol project. 
In other words - whether to pull out of the project or to stay on. 
Dr Lay will also be meeting the Finance Minister, Mr Yashwant Sinha, besides 
the Leader of the Opposition, Ms Sonia Gandhi, on Tuesday. 
He will then go to Mumbai to meet leaders of the ruling NCP combine to 
ascertain the State Government's sentiments. 
During the meeting, Mr Prabhu communicated to Dr Lay the Centre's support 
towards a workable solution acceptable to the stakeholders - namely, the 
State, the Centre and the consumers. 
Besides Central intervention by way of buy-out of the Dabhol plant, Dr Lay 
discussed various other options, including third party sale to identified 
consumers, willingness to reduce tariff by 10 per cent, etc. - options which 
have already been discussed in the past by the Energy review committee set up 
the Maharashtra Government. 
A good part of the meeting was also spent discussing the power shortage 
crisis in California. 
Emerging from the meeting, Dr Lay said, "It was a productive meeting and we 
had constructive discussions. Dabhol is a difficult problem but we agreed 
that it needs to resolved quickly. I will be meeting the Government of 
Maharashtra later this week. We are committed to finding a solution." 
Earlier in the day, Dr Lay met with the Finance Secretary, Mr Ajit Kumar. 
Our Bureau

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


Enron has no immediate plan to quit India, says Lay
Our Economy Bureau NEW DELHI

07/10/2001
Business Standard
3
Copyright (c) Business Standard

Enron has no immediate plans to quit India. The high-profile chairman of 
Enron Corp, Kenneth Lay, told reporters after a two-hour long meeting with 
Union power minister Suresh Prabhu that it was premature to talk about Enron
's exit from the Dabhol power project at this juncture. 
"We had been, and are committed to India," said Lay. He added that the 
problem was complex and Enron was working on finding a solution. Sources said 
that Lay in his meeting with Prabhu discussed various possibilities 
associated with Enron's future in the Dabhol power project.
They added that the Enron chief outlined the conditions for staying with the 
project. The other option discussed for solving the Dabhol imbroglio was to 
find a buyer. AES and a few other companies have already shown interest in 
taking over the project. 
Sources said that in today's meeting the terms on which Enron would like to 
sell its stake to the buyer was also discussed in detail. 
They, however, added that Lay didn't place any alternative proposal to solve 
the ongoing DPC-MSEB payment problem. 
Lay said that the company would hold further consultations with the power 
ministry. The Enron chief is slated to meet finance minister Yashwant Sinha 
tomorrow and Maharashtra Chief Minister the day after to discuss the issue. 
Earlier in the day, Enron India CEO K Wade Cline met finance secretary Ajit 
Kumar to apprise him of the Enron's viewpoint on its future association with 
the Dabhol project. Cline told reporters after the meeting that they wanted 
to prepare both the sides for the subsequent meeting with the finance 
minister. 
He added, "There are a variety of options facing us with the project and we 
are just trying to work through them." Cline said that Enron's plans with the 
Dabhol project would depend on how the government responded to the options 
outlined by them.

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


Enron seeks CII's help on Dabhol
Surajeet Das Gupta New Delhi

07/10/2001
Business Standard
1
Copyright (c) Business Standard

Enron Corporation chairman Kenneth Lay had a quiet meeting today with 
Confederation of Indian Industry brass where they discussed ways to resolve 
the Dabhol Power Corporation imbroglio. 
The one-hour meeting, called on Enron's request, was attended by CII 
president Sanjiv Goenka and director-general Tarun Das. Enron was represented 
by Lay and his team. While details of the meeting are not clear, Enron is 
believed to have sought CII's help in finding a solution to the Dabhol issue. 
Lay and his team also briefed the CII brass on the various meetings they 
would be having in Delhi and Mumbai.

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


Business
TAKING STOCK
Enron takes some heat, but rates a `buy'
Andrew Leckey, Tribune Media Services

07/10/2001
Chicago Tribune
North Sports Final ; N
8
(Copyright 2001 by the Chicago Tribune)

Q. I purchased Enron at $46 a share and it rose to nearly $90. It has since 
plummeted back to around my purchase price. Will the company fare better in 
the future? 
A. It's been a tough year for this Houston-based oil, natural gas and 
communications trader, even though it beat earnings expectations in its 
latest quarter and future prospects remain promising.
Enron (ENE) is owed $580 million by bankrupt Pacific Gas & Electric. The 
company has also been lambasted by California officials who believe it and 
other energy firms forced electricity prices upward by holding back supply. 
Jeffrey Skilling, chief executive and president, was hit by a pie hurled by a 
protestor on a recent visit to San Francisco, indicative of public sentiment 
there toward Enron. Skilling places the blame for the current energy crisis 
on California regulators. 
Meanwhile, plans to sell Enron's Portland General unit to Sierra Pacific 
Resources for $3 billion have gone awry because of that Nevada utility's 
financial problems. 
Enron also pulled out of a 20-year deal with Blockbuster Video to deliver 
movies over the Internet. 
In the international front, the government of India asked for the third time 
in seven years to renegotiate its contract with the Dabhol Power Co., which 
is 65 percent owned by Enron. Construction on the second phase of the 
troubled Dubhol power plant has been halted because of unpaid bills. 
Amid all this turmoil, shares of Enron are down 43 percent in value this 
year, a dramatic departure from last year's gain of 89 percent and 1999's 
increase of 58 percent. 
But at its reduced stock price, it currently rates a solid "buy" 
recommendation from the Wall Street analysts who follow it, according to the 
Boston-based First Call research firm. That consists of 11 "strong buys," 
four "buys" and one "hold." 
Enron's core business of electricity and natural gas trading remains strong 
and growing. The company's earnings are expected to increase 18 percent this 
year, versus 20 percent for the utility industry. Next year's projected 15 
percent increase compares to 7 percent for its peers. The predicted five-year 
annualized growth rate for the company is 16 percent. 
The firm is also involved in the development of an intelligent network 
platform to provide bandwidth management services and the delivery of high 
bandwidth communication applications. The broadband services division posted 
a $35 million loss in the most recent quarter. 
---------- 
Andrew Leckey answers questions Sunday in Business and Tuesday in Your Money. 
Address inquiries to Andrew Leckey, P.M.B. 184, 369-B Third St., San Rafael, 
Calif. 94901-3581, or by e-mail at andrewinv@aol.com.

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


Power Producers' 2Q Bolstered By April, May Prices
By Kaja Whitehouse
Of DOW JONES NEWSWIRES

07/09/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW YORK -(Dow Jones)- Independent power producers should meet analysts' 
second-quarter earnings targets, with increased production offsetting 
tempered June prices. 
Electricity prices remained healthy this quarter, especially in April and 
May. But the value of power cooled in June, weighed down by falling natural 
gas prices, mild weather and battling politicians, analysts said.
Power generators scrambled to pump up June volumes to offset the price drops, 
analysts said. With increased production because of development and 
acquisitions, generators sold more power this quarter than last year, said 
Barry Abramson, an analyst at UBS Warburg. 
Many in the group are expected to post earnings growth of as much as 20. 
Second-quarter earnings generally fall below the first-quarter results 
because the mild weather decreases the demand for heating and the need for 
air conditioning usually hasn't fully kicked in. 
The only glitch was the sudden and precipitous drop in June power prices, 
analysts said. The cost of one megawatt of power during peak hours in 
Southern California plummeted to an average June high of $83 from highs of 
$275 in May. Power prices in the Northeast dipped to an average June high of 
$44 from $60 in May. 
Analysts cited tepid natural gas prices, which help determine the price of 
electricity as a common fuel for generation. 
"Gas prices in June collapsed," said Chris Ellinghaus, an analyst at Williams 
Capital Group. In Southern California, the fuel cost power generators $7 per 
million British thermal unit on the wholesale natural gas market mid-June, 
versus $10.50 per BTU from just a month prior. 
Lower gas prices added pressure to generators that supplied electricity to 
markets with cooler weather compared with last year. Sellers to Northeast 
markets suffered an average loss of $20 per megawatt in peak May and June 
hours this year due to the cooler weather. 
But of those power generators exposed to Northeast markets, only NRG Energy 
Inc. (NRG) was expected to show some weakness. The Minneapolis company 
already said it expects second-quarter earnings of 21 cents to 22 cents a 
share, below analysts' previous expectations of 31 cents. As one of the 
smaller generators, NRG had "less opportunity to make it up elsewhere," said 
Gordon Howald, utility analyst at Credit Lyonnais Securities. 
Analysts now see NRG Energy posting 22 cents a share in the second quarter, 
according to a Thomson Financial/First Call survey. That is down from last 
year's second-quarter profits of 28 cents a share. 
Generators that serve Western power markets are expected to profit again from 
the regions' burgeoning demand and volatile spot market sales. The spot 
market sells electricity contracts like a commodity, and has been fetching 
high premiums as Western demand continues to outpace supply. 
Several companies already said they expect to meet analysts' profit targets, 
despite efforts by the government to implement price controls on the 
wholesale market. 
Houston's Enron Corp. (ENE) said it expects to meet the Thomson Financial 
consensus of 42 cents a share in the second quarter and $1.80 for the year. 
Last year, Enron posted earnings of 34 cents a share in the second quarter. 
Atlanta's Mirant Corp. (MIR) said it expects to achieve previously targeted 
earnings of 45 cents to 50 cents a share, in line with analysts' estimates of 
46 cents for the quarter. Last year, Mirant posted 25 cents a share in the 
second quarter. 
Generators that have tied their production to future contracts in the West, 
such as Calpine Corp. (CPN) and Duke Energy Co. (DUK), are also expected to 
show strong results. Calpine is considered immune to spot market 
investigations brewing in California. As the provider of more than half of 
California's long-term power contracts, the producer is viewed by government 
officials as one of a few helping the state keep its lights on. 
Additionally, the generator has wiped away fears that it would one day be 
swamped with unpaid bills by its largest customer, PG&E Corp.'s (PCG) Pacific 
Gas & Electric. The utility, which filed for bankruptcy protection in April, 
agreed in early July to pay money owed to the generator, as long as a 
bankruptcy court approves. 
Calpine is also considered a strong player because of its natural gas 
reserves. According to Thomson Financial, analysts estimate Calpine will post 
earnings of 30 cents a share in the second quarter, above last year's 
earnings of 19 cents a share. 
Duke Energy Corp. (DUK), Charlotte, N.C., is expected to post earnings of 52 
cents a share in the second quarter, according to Thomson Financial. That is 
above last year's earnings of 44 cents a share. 
Increased production through acquisitions are also expected to boost earnings 
for many generators this quarter. AES Corp.'s (AES) exposure to tumultuous 
Brazil markets is expected to be offset through recent expansion to other 
South American countries such as Colombia, Venezuela and Argentina. The 
Arlington, Va., company is expected post earnings 30 cents a share for the 
second quarter, above last year's earnings of 25 cents a share. 
As for the third quarter, analysts are divided about how they expect the 
generators to fare. Of course, the summer heat should drive demand, but 
volatility on the spot market may be tempered across the nation by price 
controls in California, analysts said. 
Already, California is said to be reducing the amount of energy it buys on 
the spot market in an effort to rein in prices. That should benefit companies 
like Calpine, which sells its production by long-term contracts. But those 
that rely on spot market sales across the country could be hit, especially if 
other deregulated states request similar price caps, analysts said. 
There is also concern that some generators will be asked to return some 
portion of $9 billion in power sales that California officials allege were 
overcharged. But settlement talks end today, and shouldn't yield results soon 
enough to affect second-quarter results, Howald said. "Second quarter should 
be unscathed," he added. -By Kaja Whitehouse, Dow Jones Newswires; 
201-938-5393
kaja.whitehouse.dowjones.com

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


Enron's Kenneth Lay on India's Dabhol Power Project: Comment
2001-07-10 06:10 (New York)


     New Delhi, July 10 (Bloomberg) -- Kenneth Lay, chairman of
Enron Corp., the world's biggest energy trader, speaks after talks
with India's Finance Minister Yashwant Sinha about its $3 billion
Dabhol Power Co. unit.
     Dabhol and the Maharashtra State Electricity Board, its only
customer, have been quarrelling for the past seven months over
unpaid bills. The board no longer buys power from the unit and
construction work on the second phase of the plant was stopped
last month after lenders stopped funding it.

     ``We've had a very productive meeting with the minister of
finance. We discussed the problems with the Dabhol project (and) a
number of different avenues to try and resolve the difficulties.
     ``We didn't come to any conclusions today and didn't expect
to come to any conclusions. It will take more work from us and the
governments of Maharashtra and India. We are very hopeful that the
problems can and will be resolved fairly quickly.
     ``It's in everybody's best interest, the government of India,
the U.S., investors, the government of Japan. We have many
government financial entities involved in this project, the Export-
Import Bank of the U.S. and OPIC (Overseas Private Investment
Corporation) have about $400 million of debt involved in the
project.
     ``The Japanese export bank has about $350 million invested in
the project. The LNG (liquefied natural gas) contracts are with
the governments of Oman and Abu Dhabi. Private sector investors
include Enron, General Electric and Bechtel.
     ``So you have a lot of interest here that would like to see
this resolved fairly quickly.''
     The second phase of the project ``is about 85 percent
complete including the LNG facility. But with non-payments by the
Maharashtra State Electricity Board, the lenders and equity
investors were not willing to continue providing the financing for
completing the construction. Now, it's been demobilized.
     ``This will add additional cost to the project ultimately and
delay its start. We could not avoid that and very much regret it
because Dabhol, both phase one and two as well as the LNG
facility, are great for Maharashtra and for India.''




Prosecutors to Get Reliant, Mirant, Dynegy Documents (Update1)
2001-07-09 19:05 (New York)

Prosecutors to Get Reliant, Mirant, Dynegy Documents (Update1)

     (Adds comments from Oregon in fifth paragraph, background in
seventh paragraph, company comment in 11th paragraph.)

     Los Angeles, July 9 (Bloomberg) -- California's attorney
general can share with Oregon and Washington documents he
subpoenaed from Reliant Energy Inc., Mirant Corp. and Dynegy Inc.
in an electricity price-collusion probe, a state judge ruled.
     Los Angeles Superior Court Judge George Wu today said
California Attorney General Bill Lockyer can release the
information July 12. The generators told the court they plan an
immediate appeal and will ask a higher court to bar distribution
of the papers.
     The states, California's grid manager and Senate, and the
Federal Energy Regulatory Commission are among the agencies
looking into whether generators illegally manipulated the Western
electricity market to charge record prices.
     California is months into an energy crisis that has brought
rolling blackouts and the bankruptcy of PG&E Corp.'s Pacific Gas &
Electric. The documents will advance state probes; if generators
are charged and found guilty of violating state law, they may face
civil or criminal penalties.
     ``The court orders that unless a stay is granted by the Court
of Appeal, the protective order will be lifted as to the
Washington and Oregon attorneys general'' on July 12, Wu said in
an order after hearing oral arguments today.
     The three states are pursuing separate investigations and
each agreed months ago to share any information that could help
the others, said Kevin Neeley, spokesman for Oregon Attorney
General Hardy Myers.
     Oregon's investigation ``has been relatively slow going,''
Neeley said, noting that the state was having difficulty getting
documents.

                    Looking for Refunds

     Wu two weeks ago ruled that Lockyer could share documents
with other California agencies.
     The attorney general and other agencies are investigating
most major generators, such as Duke Energy Corp. and Enron Corp.
Mirant, Dynegy and Reliant were the only companies to challenge
Lockyer's right to share documents.
     Also today, two weeks of Federal Energy Regulatory Commission
talks between power sellers and California on overcharges ended
without an accord. California says it is due a refund of $8.9
billion. The companies say they're still owed money for past power
deliveries.
     Houston-based Dynegy spokesman Steve Stengel said his company
is ``confident that if in fact the attorney general turns over the
documents, any information will be kept confidential'' as
stipulated in the subpoena order.
     Spokesmen for Houston-based Reliant and Atlanta-based Mirant
declined to comment. Reliant shares rose 9 cents to $32.49, Mirant
shares rose $1.58 to $38.35 and Dynegy shares rose 48 cents to
$46.85.