Competitor joins market for gas / Regulators wary of price claims
The San Francisco Chronicle, 09/11/01

India: Dabhol power 'not expensive'
Business Line (The Hindu), 09/11/01
INDIA'S MSEB MAY FACE US$4.2 BLN LIABILITY FOLLOWING ARBITRATION
Asia Pulse, 09/11/01

Judicial probe against Enron to commence
The Times of India, 09/11/01
USA: Transwestern says good demand for U.S. natgas line.
Reuters English News Service, 09/10/01

Southeast Power Grid Mediation Produces Two Models (Update1)
Bloomberg, 09/10/01




BUSINESS
Competitor joins market for gas / Regulators wary of price claims
Bernadette Tansey
Chronicle Staff Writer

09/11/2001
The San Francisco Chronicle
FINAL
C.1
(Copyright 2001)

Northern California residents who suffered a nasty shock when they opened their heating bills last winter are being offered the chance to fire PG&E and sign up with an alternative natural-gas supplier dangling big savings in a broad-based ad campaign. 
Enron affiliate NewPower says it can beat Pacific Gas and Electric Co.'s prices by locking in a fixed rate for gas that won't fluctuate with market changes. Some regulators and consumer advocates, however, say it may not be a good deal.
Only about 74,000 of PG&E's 4 million residential power customers proved adventurous enough to switch when companies such as Green Mountain set up shop as alternative electricity suppliers under the state's deregulation experiment. And that "retail choice" program for electricity may soon be suspended -- a casualty of the energy crisis. 
But people are free to make private deals for natural gas, which has long been deregulated. NewPower, based in New York state, is the first energy firm to set up as an alternative supplier in California for households that now buy from the utilities. 
NewPower is betting that residents are in no mood to take a chance that PG&E gas rates have stabilized after the spikes that drove bills up by hundreds of dollars last winter. The firm is offering contracts at a set rate for two years, even if market prices shoot through the roof again. 
"You still keep the same reliable service from PG&E," says a NewPower ad placed in California newspapers. "You just pay a lot less for the gas." 
NewPower has also peppered PG&E customers with solicitation letters, though the company won't say how many it has sent out. It also won't say how many utility customers have switched. 
NewPower's natural-gas deal should be closely scrutinized by anyone thinking of signing on, say state regulatory officials and consumer advocates. 
This month, for example, the price being charged by NewPower for gas is more than double PG&E's September rate. And the NewPower rates could remain higher than PG&E's through the winter, if the utility's rate forecasts prove accurate. 
"Right now, the price is fairly low," NewPower spokeswoman Gael Doar said of PG&E's rate of 52 cents per unit of gas for September. "But earlier this year, the price was higher than $1.40." 
In fact, PG&E's record-setting peak rate in January was $1.77. But gas prices have plummeted, and NewPower's critics say they are unlikely to reach the same record highs this winter. 
The stable rate under both plans offered by NewPower tops PG&E's average charges during the height of the energy crisis, a Chronicle analysis found. 
PG&E's average cost per unit of gas from June 2000 to May 2001 was $1.10. When all charges are included, the cost per unit of gas is a flat $1.22 under one NewPower plan and an average of $1.16 under another. 
Doar said NewPower customers will save because they will avoid price spikes during the winter, when households use the bulk of their gas. 
"If consumers are worried about prices going up like they did last year, our product might appeal to them," Doar said. 
Harry Snyder of Consumers Union in San Francisco said he doesn't buy it. 
"They're trying to lock you in now at a rate that is already high but will be way too high shortly," Snyder said. He said NewPower's marketing letter also makes it hard for people to make a cost comparison. 
The letters reassure customers that PG&E will still deliver their gas through utility pipelines, repair the lines, answer service calls and read their meters. 
"But they don't talk about the fact that you'll have to pay PG&E to do that," Snyder said. 
NewPower's marketing letter promoting its Seasonal Saver plan, which offers a rate of 87 cents for most of the year and 35 cents for three summer months, makes no mention of an additional 36-cent fee that customers must pay PG&E, he said. 
Doar said NewPower wasn't trying to confuse people. 
"We're very careful in terms of making sure the consumers understand what they have to pay," Doar said. "Our letters have to be approved by the PUC." 
But Trina Horner, a natural-gas adviser to Loretta Lynch, president of the state Public Utilities Commission, said no one at the PUC has reviewed the mailer. 
"I don't know what NewPower is talking about when they said we approved the letter," she said. 
The PUC has no regulations requiring alternative gas providers to register, file their contracts and honor them, or submit their marketing materials or business plans for review, Horner said. 
Those who went outside PG&E to buy their electricity were dumped back on the utility when prices soared last winter, but Doar said NewPower's gas customers won't have to worry about that. She said the company's contracts bar it from unloading residential customers unless emergencies such as pipeline breaks make it impossible to deliver gas. 
Snyder said evaluating such contracts requires people to predict gas prices like an energy expert, a job that he said is better left for utilities to do on their behalf. 
"Hey, it's me against Enron," Snyder said. "That's not a fair matchup -- I'm going to get beat every time."

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


India: Dabhol power 'not expensive'

09/11/2001
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, Sept. 10. DABHOL Power Company (DPC) has dismissed the Maharashtra State Electricity Board's (MSEB) charges of DPC power being expensive as "grossly misleading". 
The company has claimed that MSEB is in a position to absorb DPC power at 90 per cent plant load factor as contemplated by the power purchase agreement "given that MSEB currently faces a daily shortage of 800 MW to 1500 MW".
"DPC's tariff is not expensive, nor is it Rs 8.80, as claimed by MSEB, if operated optimally," Mr K. Wade Cline, Managing Director, Enron India, was quoted as saying in a news release. 
DPC has claimed its tariff would amount to Rs 3.80 per kWh if the State and Centre waive naphtha levies. 
The company has said it is "ludicrous to state that MSEB's inability to collect more than 42 paise prevent it from affording DPC power" as this is tariff paid by agricultural consumers whereas DPC power is absorbed by all categories of consumers. 
The news release criticised Mr Vinay Bansal, MSEB Chairman, for "misrepresenting facts". 
- Our Bureau

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


INDIA'S MSEB MAY FACE US$4.2 BLN LIABILITY FOLLOWING ARBITRATION

09/11/2001
Asia Pulse
(c) Copyright 2001 Asia Pulse PTE Ltd.

NEW DELHI, Sept 11 Asia Pulse - The Maharashtra State Electricity Board (MSEB) stands to pay up to Rs 200 billion (US$4.2 billion) if the Enron promoted Dabhol Power project wins international arbitration proceedings, MSEB chairman Vinay Bansal said. 
"MSEB's liability, if the US$2.9 billion project is terminated following Dabhol Power Company (DPC) winning international arbitration, could be between Rs 150 to Rs 200 billion," Bansal told PTI.
Of this, the centre's liability would be around Rs 25 billion, he added. 
DPC's May 19 pre-termination notice to MSEB expires on November 19, after which the US energy company would approach its lenders for approval of the final termination notice. 
After terminating the PPA, the DPC would take the arbitration route for recovering its US$48 million dues and investments from MSEB. 
DPC had served a conciliation and arbitration notice on the Centre on April 4, 2001, for not honouring counter-guarantees over the non-payment of dues amounting to Rs 2.13 billion plus interest towards the bills due from MSEB for December, 2000, and January, 2001. 
"We had requested the Centre not to honour its counter guaratee for the 740 MW Phase-I, because the DPC had failed to honour Rs 4.01 billion rebate emanating from the short supply of power on January 28, and the dues must be adjusted against them," he said. 
(PTI) 11-09 1615

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

Judicial probe against Enron to commence
Vinu Lal

09/11/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)

MUMBAI: After two months of delay, the state government has finalised the terms of reference for a judicial probe against Enron to investigate the alleged `failure of governance' occurred in matters concerning DPC. 
Mantralaya sources pointed out that the Cabinet meeting scheduled for Wednesday will take up the terms of reference of the probe for clearance.
Sources said that the probe to be instituted under Commission of Enquiries Act 1952 will examine whether all clearances in tariff given to the project were in accordance with relevant laws and notifications prevailing at both state and Central level. 
The probe will also cover amendments made by the Union ministry of power on DPC tariff notifications and as to whether these were conforming to the regulations of Electricity Supply Act 1948. 
Sources added that investigations will be done to find out whether the renegotiation committee proceedings under the previous Shiv Sena government helped bring down the capital cost of the project. 
Sources said that the terms of reference is on lines of left parties' draft reports submitted to the government. 
The draft report on the terms of reference had suggested detailed investigations on the manner in which guarantees were given at both Central and state level. 
The report added that PPA has prima facie violated several regulations under the Electricity Supply Act 1948. 
Meanwhile, on September 17, arguments will begin on ten separate petitions on the project which will come up before a division bench headed by Justice A Shah. 
This follows the recent move by the Chief Justice which was in response to a request made by the defendants, all cases in Mumbai High Court pertaining to DPC were transferred to this division bench. 
Also another six public interest litigations from Nagpur bench were also transferred to this division bench. Sources added that an official judicial probe into the project will have an impact on the case proceedings. 
The judicial probe proposed by the state will be in accordance with the Supreme Court stance on the project where in a judgment by the apex court had earlier held that it is not in the public interest to permit re-opening of that matter for re-examination of PPA once again.

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

USA: Transwestern says good demand for U.S. natgas line.

09/10/2001
Reuters English News Service
(C) Reuters Limited 2001.

HOUSTON, Sept 10 (Reuters) - Enron unit Transwestern Pipeline (TW) said on Monday that plans to expand its natural gas pipeline system across the Southwest received requests from gas shippers to carry up to 1.3 billion cubic feet of gas a day (bcfd). 
An Enron spokeswoman said the market response had met company expectations and that it would now negotiate contracts with individual shippers for the proposed Sun Devil Pipeline project.
She added that with the end of the open bidding process TW would be better able to estimate the cost of the project, which would add 400 miles of pipeline linking fields in New Mexico's San Juan basin with Arizona and California markets. 
The Sun Devil project aims to meet a surge in the region's gas-fired power generation. The total amount of gas requested from gas shippers is roughly enough to drive eight 1,000 megawatt gas-fired power plants. 
The project could begin delivering gas by January 2004, pending regulatory approval, an Enron statement said. 
TW said it expects to file its Sun Devil application with the Federal Energy Regulatory Commission early next year. 
TW also said it would initiate a community and environmental outreach effort to ensure open communication between the company, governmental oversight bodies, and members of the community during the project-review period, construction of the pipeline, and after the project is in service. 
TW's pipeline system consists of around 2,500 miles of pipeline, with combined east-west delivery capability of 1.7 bcfd.

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

Southeast Power Grid Mediation Produces Two Models (Update1)
2001-09-10 21:39 (New York)

Southeast Power Grid Mediation Produces Two Models (Update1)

     (Rewrites first paragraph; adds details and comments
throughout.)

     Washington, Sept. 10 (Bloomberg) -- About 200 representatives
of utilities, power marketers and regulators in the Southeastern
U.S. couldn't agree on the form a sole regional electricity grid
operator should take, though 45 days of mediated talks ended with
an outline of two possible models, a judge said.

     Federal Energy Regulatory Commission Administrative Judge
Bobbie McCartney presented the two models to the commission,
saying FERC should quickly tell participants which it favors. She
said she recommends the proposal that would set up a for-profit
transmission company and gives key functions to a non-profit
market administrator. It has the ``broadest support,'' she said.

     FERC wants as few as four regional grid operators to replace
dozens of local transmission systems, saying consolidation would
boost competition, expand available energy supplies and discourage
grid manipulation by utilities. In the Southeast, where power is
generally cheaper, utilities and state regulators are resisting
the move, claiming it could boost power bills.

     ``Absent clear commission endorsement of its preferred model,
impasse will continue with the parties polarized to their
respective models,'' McCartney wrote in her 133-page report.

     The Southwest Power Pool Inc., which FERC directed to
participate in the talks, failed to agree on a plan with any of
the other organizations and decided to enter into talks to form a
Midwest regional organization, the judge said. The Southwest Power
Pool covers Oklahoma, Kansas and parts of Arkansas, Louisiana,
Mississippi, Missouri and New Mexico.

                             Northeast

     FERC ordered the talks in July between Southern Co., Entergy
Inc., and other groups that have proposed several smaller
transmission groups in the Southeast. Utilities and other parties
that participated in the FERC talks agreed not to discuss the
negotiations until after the judge issued her report.

     An Entergy spokeswoman said her company was still reviewing
the report and a call to Southern for comment wasn't returned.

     The commissioners have called for similar negotiations in the
Northeast and said they may require discussions aimed at forming
grid operators in the West and Midwest. Most of Texas is separate
from the national grid and won't be required to participate.

     Other participants in the mediation included representatives
from GridSouth, a grid group proposed between Progress Energy
Inc.'s Carolina Power & Light, Duke Energy Corp., and SCANA
Corp.'s South Carolina Electric & Gas Co. and GridFlorida LLC, a
transmission group of Florida Power and Light Co., Tampa Electric
Co. and Florida Power Corp.

     Judge McCartney said the favored plan is a consolidation of
aspects of the proposals submitted by GridFlorida, GridSouth and
Entergy. The second plan contains many of the aspects of the model
proposed by Southern, she said.

     The FERC and many power suppliers say the Southeast is a
natural market for wholesale power and its grid should be operated
by a single organization. Electricity generators and marketers
support a small number of grid operators because it will reduce
the fees they pay to move power from one area to another.

     Enron Corp., the largest U.S. electricity trader, said in a
filing to FERC that the Southeast needs a single organization
``capable of ensuring the security and reliability of the regional
transmission grid, as well as efficient market development in the
region.''

     An independent analysis submitted by Enron shows most of the
Southeastern utilities' power sales are to each other or to market-
trading affiliates inside the proposed region. Smaller control
areas within the region won't be able to manage power flows as
market activity continues to expand in the region, according to
the analysis.

     The judge in charge of the Northeast mediation efforts, which
finished on Friday, is due to report on the progress of those
talks on Oct. 17. The talks sought to link grid operators New
England Independent System Operator, New York ISO and PJM
Interconnection, which runs all or some of the power lines in
Pennsylvania, New Jersey, Delaware, Maryland, Virginia and
Washington, D.C.