Enron Mentions ,
 Two Executives Leave Houston-Based Energy Firm's Broadband Arm
Houston Chronicle - Texas, 08/31/01
Utility could raise some rates by 60 percent
Associated Press Newswires, 08/31/01
INDIA PRESS:Fincl Cos Want MSEB To Buy Dabhol Electricity
Dow Jones International News, 08/31/01
India: US and China: Back to courting
Business Line (The Hindu), 08/31/01




Two Executives Leave Houston-Based Energy Firm's Broadband Arm

08/31/2001
KRTBN Knight-Ridder Tribune Business News: Houston Chronicle - Texas
Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World Reporter (TM)

Two Enron Corp. executives who headed the company's foundering broadband business left Enron to pursue other opportunities, Enron said Thursday. 
Ken Rice, 43, chairman and chief executive of Enron Broadband services left, as did Kevin Hannon, 41, chief executive of Enron Global Assets and Services. Hannon had been president and chief operating officer of the broadband unit.
Both men previously had other executive roles at Enron. 
Rice had most recently been helping Enron to move its pared-down broadband operation into its wholesale services division. Wall Street has been expecting Rice to leave Enron. 
Enron's broadband business suffered as the telecommunications industry melted down. A deal with Blockbuster that fell through earlier this year was also considered a setback. 
For the second quarter, broadband reported a $102 million operating loss, compared with an $8 million operating loss for the same quarter a year ago. 
When Enron reported second-quarter results in July, it said it would significantly reduce spending in broadband "to match the reduced revenue opportunities currently available." 
The elimination of up to 250 broadband jobs in April preceded the announcement. 
The two departures follow Jeff Skilling's surprise announcement about two weeks ago that he was stepping down as Enron's chief executive officer for personal and family reasons.

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

Utility could raise some rates by 60 percent

08/31/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

PORTLAND, Ore. (AP) - Nearly 730,000 Portland General Electric customers could see a rate hike of 30 to 60 percent Friday if state regulators approve the increase as expected. 
PGE's 637,000 residential customers would see a rate increase of roughly 30 percent, while its 90,000 business customers could face increases of 40 to 60 percent, according to PGE estimates.
"The price increase is completely about power costs," said Peggy Fowler, the utility's president and chief executive officer. "We've tried to hold off as long as we could. But these truly are unprecedented times." 
Since late last year, utilities throughout the Northwest have been raising rates by double-digit percentages. PGE avoided the trend by coming out ahead on power trades and deferring some costs. 
The utility serves more Oregonians than any other in the state. Most of its customers are in the Willamette Valley. 
PGE requested the increases a year ago. If the Oregon Public Utility Commission announces Friday it has approved the request - as is expected - the new rates will take effect Oct. 1. 
Customer advocacy groups questioned whether PGE could justify the need for such a large increase. 
"They should be looking for ways to cut spending" to offset the rise in power costs, said Bob Jenks, executive director of the Citizens Utility Board. 
Julie Brandis, a lobbyist for the 19,000-member Associated Oregon Industries, said PGE should cut payrolls and slash operating budgets before raising its rates. 
She said rate increases of up to 60 percent mean thousands of dollars of additional monthly expenses to businesses already struggling to survive. 
"It will greatly impact the economy of Oregon," she said. 
PGE officials said the rate increases reflect the projected costs of buying and generating electricity from Oct. 1 on. 
Power costs beyond what had been anticipated for Jan. 1 through Sept. 30 have been accumulating in a deferred account set up by regulators. The company will file another rate request next spring to recover those costs, officials said. 
PGE serves customers by generating electricity at utility-owned power plants and by buying power on wholesale markets. The split between company-generated and purchased power is roughly 50-50. 
This year, wholesale prices on short-term, or "spot," markets have dropped dramatically, from a high on May 9 of $520 a megawatt hour to Thursday's low of $22.22 a megawatt hour. 
The drop hurts PGE, which earlier this year purchased extra supplies of power in anticipation of profitable trades this summer and fall. 
PGE residential customers pay about 5.8 cents a kilowatt hour, plus a monthly flat fee of $5.50. Customers use, on average, about 1,000 kilowatts a month. 
The increase incorporates a new tiered-rate structure, in which customers pay one rate for the first 225 kilowatt hours and a higher rate for additional energy use.

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

INDIA PRESS:Fincl Cos Want MSEB To Buy Dabhol Electricity

08/31/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI -(Dow Jones)- Indian lenders to U.S.-based Enron Corp.'s (ENE) unit, Dabhol Power Co., are insisting on the resumption of the purchase of power by its sole buyer, the Maharashtra State Electricity Board, from the 740 megawatt first phase of the DPC plant, reports the Economic Times. 
The financial institutions, led by the Industrial Development Bank of India (P.IDB), have said that unless phase I of DPC is reactivated the cash flow of DPC won't improve and it will be difficult for the project to find a buyer, according to the report.
The matter was discussed by a committee comprising the financial institutions, MSEB, Central Electricity Authority and India's Ministry of Petroleum. The MSEB has not given any commitment, but has asked the financial institutions to submit a formal proposal in this connection, the report added. 
The financial institutions supporting Dabhol have an exposure of over 51.25 billion rupees ($1=INR47.14). Enron has a 65% controlling stake in the Dabhol project. 
The DPC's phase I 740 megawatt power plant has been inoperative since May 29 after the MSEB claimed the company's power tariffs were "exorbitant and unaffordable," and stopped drawing electricity. Work on the roughly 95% complete 1,444 megawatt Dabhol phase II was also stopped soon after the dispute began. 
The Dabhol-MSEB dispute is before the courts. 

Web site: http://www.economictimes.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: US and China: Back to courting

08/31/2001
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

POLITICALLY hard and unyielding, but economically flexible and alluring. 
Those are the defining characteristics of the present Chinese leadership.
Even while welcoming American businessmen with open arms and going out of its way to facilitate their business activities in China, Beijing never hesitated to stand firm against the US when its national interests were involved. 
It never allowed its interest in US investment flows to dilute its adherence to its political principles, and it never allowed the frictions in its relations with Washington due to its adherence to its principles to prejudice it in its attitude towards American businessmen. Beijing learnt that what was really important was not the certificate of good governance from American political leaders, but from their businessmen. 
The Chinese leadership also learnt many years ago that: 
* Political frictions between two capitals do not necessarily deter US businessmen so long as they are assured of the safety of their lives and investments and have a free hand in making profits. 
* In a globalising world, business interests are an important component of strategic interests and no US administration, Democratic or Republican, can afford to ignore the views and interests of its businessmen. Ultimately, the compulsions of business interests will prevail over those of ideology and politics. 
Dark clouds had gathered over US-China relations ever since Mr George Bush Jr. was elected the US President in November last. A paranoia over what was projected as likely threats to US interests in the Asia-Pacific region due to the fast-emerging Chinese economic and military power was the dominant feature of the campaign speeches, of the debates in Republican circles before the inauguration, and of the actions of the new Administration in its first few months in office. 
No other members of the new Administration reflected this paranoia more disturbingly than Mr Donald Rumsfeld, the new Defence Secretary, and to a lesser extent, Ms Condoleezza Rice, the National Security Adviser. China was projected as a strategic competitor and not partner as it had been glorified to be by Mr Bill Clinton, the previous President. 
Actions such as the attention to the Dalai Lama when he visited Washington DC and clearance to arms sales to Taiwan in the face of Beijing's opposition were all influenced by the conservative, distrust- China lobby in the Republican Party. 
Gen (retd). Colin Powell, Secretary of State, who is more a professional than an ideologue, found himself without adequate voice in policy-making with regard to China in the first few months. It is the ideologues who prevailed. 
But things started changing from the day Mr Rumsfeld allegedly issued an order suspending periodic interactions between the armed forces of the US and China, which had been initiated by the Clinton Administration as a confidence-building measure. It was reported that the past President, Mr George Bush Sr, the father of the current incumbent, was shocked by this order and pointed out to Gen Powell and Ms Rice the inadvisability of unnecessarily needling China. 
Mr Rumsfeld wriggled out of an embarrassing situation by claiming that his instruction for a case-by-case clearance of future interactions had been misinterpreted by a Pentagon official as suspension of the interactions. It was from that time onwards that one could see Gen Powell playing a more active role in China policy-making and a beginning of a possible diminution in the role of Mr Rumsfeld and Ms Rice. Other influential personalities too joined in strongly deploring the anti-China paranoia being created by the conservative ideologues which, they pointed out, could be counter-productive. 
Dr Henry Kissinger, former National Security Adviser and Secretary of State, was one of the strongest critics of this artificially-created paranoia. How can a nation (China) with an annual defence budget of $12 billion pose a threat to a nation (the US) with an annual defence budget of $350 billion, he asked. He pointed out that just because China was modernising its Armed Forces in keeping with its present-day requirements, it could not be perceived as a threat to American interests. 
China conducted itself during these difficult months in an exemplary manner. It kept up its strong criticism of the US policies towards Taiwan and Tibet and on espionage flights. It joined hands with Moscow in strongly opposing the missile defence initiative of Mr Bush. It kept up its clandestine supply of missile and missile components to Pakistan. According to American intelligence estimates, as quoted by the Washington Times, 12 consignments have gone by ship and road to Pakistan since Mr Bush Jr assumed office. It did not hesitate to prosecute American nationals/residents of Chinese origin arrested on charges of spying, but let them leave the country after a proforma conviction. 
At the same time, it kept reiterating its continued interest in a co-operative relationship with the US and underlining the inevitability of the restoration of the warm vibrations of the past. It stepped up its imports from the US in order to reduce the trade deficit, which is presently unfavourable to Washington. It accelerated negotiations on pending business contracts with US companies. According to the latest Chinese Customs figures, Chinese imports from the US increased 17.9 per cent to $12.5 billion as against only a six per cent increase in exports to the US ($25.02 billion) during the first half of this year. 
Beijing reportedly permitted five of its airline companies to buy 36 Boeing-737 aircraft with a combined price tag of $2 billion and the Air China to purchase four Boeing 737-800s. 
One could see the benign impact of the pressures on the Administration from professional strategic experts and business interests in the changed language during Gen Powell's visit to Beijing in the last week of July, 2001. After his one- day talks in Beijing with President Jiang Zemin and other Chinese leaders, he said: "We view China as a friend, not as an adversary." He never once used the expression, 'strategic competitor'. 
Gen Powell emphasised the Bush Administration's desire to build "constructive, forward-looking relations" with China. "China and the United States have a strong common interest in seeing a stable Asia and a world where economies can thrive and security needs can be met," he added. 
He admitted that major differences remained on issues such as Taiwan, China's proliferation of weapons of mass destruction such as its continued supply relationship with Pakistan and human rights, but added that Beijing had agreed to the subjects of proliferation and human rights being further discussed by experts from the two countries before President Bush's visit to China in October. 
Thus, one could see that Sino-US relations are on the mend as a result of re-thinking in Washington. Mr Clinton too came to office in January, 1992, with a negative image of China which later on turned into a very positive one, but this transformation took some time to come about. In the case of Mr Bush, it has come about within seven months of his assuming office. 
India has valuable lessons to learn from this. Our policy towards the US is perceived by many to be politically malleable, but economically devoid of content. The rapidity with which we welcomed Mr Bush's missile defence initiative, even when the US' closest allies such as the UK preferred to wait and study before reacting, the way we seem to have allowed the positive assessment of the US security experts on Pakistan's Gen Pervez Musharraf to prevail over the negative assessment of our own experts, thereby, creating the Agra embarrassment, show a tendency to let judgments and actions in such matters be influenced by US perceptions. 
At the same time, the economic dimension of India's relations with the US has not received the required attention. Even earlier, the analysts of conservative think-tanks close to the Republican Party viewed the economic management of the Government as lackadaisical. 
This negative perception seems to have been strengthened by the Enron case. There is, consequently, a danger of the interests of US businessmen in India gradually evaporating. 
The country seems to be under an illusion that foreign businessmen will flock to it just because it has a functioning democracy, a modern legal system and a population of one billion. More than this, what is important is their perception that India has a government which manages the economy competently and makes the business atmosphere investor-friendly, for domestic as well as foreign investors. One looks in vain for such a perception. 
B. Raman 
(The author is a former Additional Secretary, Cabinet Secretariat, Government of India.)

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