Enron Mentions - 02/16/2001 ,
 Power Politics: Energy Crisis Offers Clues to the Workings Of Bush=20
Administration --- Cheney Does Heavy Lifting And Bush Rides Agenda; Taste f=
or=20
Horse-Trading --- `A Lot of Pain in the West'
The Wall Street Journal, 02/16/2001

Generators: No Plans To Build Peaking-Power Plants In Calif
Dow Jones, 02/16/2001

Developments in California's Electricity Crisis
Associated Press Newswires, 02/16/2001

Bush Pushes Energy Plan in Mexico Trade: President Wants to Cut Hemispheric=
=20
Barriers for Oil, Gas and Electricity But it May Be a Hard Sell South of th=
e=20
Border
Los Angeles Times, 02/16/2001

Enron Corp. to Increase Investment in Argentina, Cronista Says
Bloomberg News, 02/16/2001

Petrobras, Repsol Plan $300-Mln Bolivian Pipeline, Valor Says
Bloomberg News, 02/16/2001=20

Governor of Buenos Aires Shoots for the Presidency, the People's Discontent=
=20
His Ammunition
The Wall Street Journal, 02/16/2001

`Terms of Reference of Godbole Panel Must Include DPC Review'
The Times of India, 02/16/2001

Indian Trade Unions Urge Government to Take Over Enron Project
Asia Pulse, 02/16/2001

India: Enough is Enough for Enron Corp?
Business Line (The Hindu), 02/16/2001

MSEB Tightening Screws on Power Thefts, Defaulters
The Times of India, 02/16/2001

India State Pays Bills to Enron, But Electricity Crunch Persists=20
International Herald Tribune, 02/16/2001

Universal Signs Video-on-Demand Deal=20
The Industry Standard, 02/16/2001

California Questions Dominate Industry Conference
Reuters, 02/15/2001

Judge in Court Challenge to Gov. Gray Davis Steps Down=20
Associated Press, 02/15/2001=20

Calpine Says California Must Address Debt to Traders=20
Bloomberg News, 02/15/2001

Enron Saga Spills Over Into Cyberspace
Hindustan Times, 02/15/2001

Williams' EnergyNewsLive.com Features Top Energy Newsmakers=20
PR Newswire, 02/15/2001=20

Electric Deregulation Trial Run Begins
Associated Press Newswires, 02/15/2001

---------------------------------------------------------------------------=
---
-----------------------------------------------

Power Politics: Energy Crisis Offers Clues to the Workings Of Bush=20
Administration --- Cheney Does Heavy Lifting And Bush Rides Agenda; Taste f=
or=20
Horse-Trading --- `A Lot of Pain in the West'
By Jeanne Cummings
Staff Reporter of The Wall Street Journal

02/16/2001
The Wall Street Journal=20
A1
(Copyright (c) 2001, Dow Jones & Company, Inc.)=20

WASHINGTON -- George W. Bush had barely celebrated his belated presidential=
=20
victory when he was hit by the energy crisis in the West.=20

In a series of telephone calls to Mr. Bush's Texas ranch before Christmas,=
=20
Utah Gov. Michael Leavitt spent hours raising the alarm with the=20
president-elect's top aides. A supply squeeze had sent utility bills soarin=
g=20
not just in California but in neighboring states as well, with the prospect=
=20
of bigger spikes in the months ahead.

How Mr. Bush went on to handle the crisis, the first big challenge of his=
=20
presidency, offers some early clues to how his White House will function. H=
e=20
has leaned heavily on Vice President Dick Cheney to handle the details. Tha=
t=20
allowed Mr. Bush to stick doggedly to his chosen public message -- and=20
shielded the president from some difficult policy choices. Even Mr. Leavitt=
=20
never insisted on speaking directly to the new president, who was busy nami=
ng=20
his cabinet.=20

Mr. Bush bent his free-market, limited-government principles to accommodate=
 a=20
crisis, but so far by only a little: He offered a single two-week extension=
=20
of Mr. Clinton's executive order directing suppliers to sell power to nearl=
y=20
bankrupt California utilities. While turning to national issues, Mr. Bush=
=20
remained open to a state-level problem, offering his former gubernatorial=
=20
colleagues a sensitive ear.=20

And he worked hard to use unexpected events to help buttress his arguments=
=20
for his policy agenda. Just as he has used the economic slowdown to garner=
=20
support for his tax-cut agenda, he hopes to use the Western energy crisis t=
o=20
win political support in Congress for his controversial agenda of expanding=
=20
exploration into environmentally sensitive areas in Alaska and the Rocky=20
Mountains.=20

Such exploration might not yield energy for years, or yield much power at=
=20
all, especially of the sort California needs. But it's a pet project of a=
=20
White House where the president and vice president are both veterans of the=
=20
oil industry. Winning the necessary support for exploration is part of the=
=20
challenge of drafting a comprehensive energy bill, which a team of top aide=
s,=20
led by Mr. Cheney, is working to produce within 45 to 60 days.=20

The energy problem has shadowed Mr. Bush throughout the first month of his=
=20
presidency. It commanded his private attention every day of his first week =
in=20
office, even as he was publicly unveiling education-reform proposals. More=
=20
recently, he has received regular briefings from Mr. Cheney, who is=20
consulting key members of Congress and energy experts. The matter will move=
=20
front and center today when the president makes his first foreign visit, to=
=20
Mexico, where he is expected to discuss expanded natural-gas exploration an=
d=20
trade with Mexican President Vicente Fox Quesada. At the same time, Mr.=20
Cheney will be back in Washington convening the first working meeting of th=
e=20
various cabinet secretaries whose departments will be affected by a nationa=
l=20
energy bill.=20

Some top Republicans believe the energy crisis could cast an even larger=20
cloud over Mr. Bush's first year than the softening economy -- especially i=
f=20
the continuing supply squeeze leaves Western consumers facing new price=20
increases this summer, as widely predicted. "We recognize that this is a=20
challenge we will be faced with at least through the summer. We're obviousl=
y=20
monitoring it very closely," says Energy Secretary Spencer Abraham.=20

The problem has its roots in California's 1996 energy-deregulation bill,=20
signed by former GOP Gov. Pete Wilson. As part of the negotiations over the=
=20
bill, the state's utilities agreed to buy power on short-term contracts,=20
making them vulnerable to wholesale-price swings. The law also capped=20
consumer bills, which meant rising fuel costs couldn't be passed along to t=
he=20
users.=20

The situation became critical last year when natural-gas prices spiked upwa=
rd=20
at the same time that hot summer weather and a booming economy increased=20
usage and low rainfall depleted the region's hydroelectric power. Californi=
a=20
soon began gobbling up any available power in the Western region's electric=
=20
grid, which drove wholesale rates sky-high and wound up increasing the=20
utility bills of consumers in neighboring states. Idaho residents, for=20
instance, saw their bills rise by 25%, while California users still benefit=
ed=20
from retail-price caps.=20

So Gov. Leavitt wasn't the only Western governor trying to get the new=20
president to focus on the issue. Wyoming Gov. Jim Geringer raised it on Jan=
.=20
9, when he and Mr. Bush were standing together in the pasture parking lot o=
f=20
the Bush ranch, awaiting the arrival of other Republican governors invited =
to=20
a Bush-sponsored barbecue. The issue was also discussed later among all the=
=20
governors, but only in broad terms, participants say.=20

Three days later, Clinton administration officials convened the first meeti=
ng=20
of all the parties involved in the California crisis. To provide a voice fo=
r=20
Mr. Bush's team, Clinton aides invited the president-elect's friend and=20
fellow Texan Kenneth Lay, head of Houston-based Enron Corp. As the largest=
=20
trader of gas and electricity in North America, Enron has profited from the=
=20
energy crisis. During the 2000 campaign, Mr. Lay donated more than $300,000=
=20
to the GOP, according to the Center for Responsive Politics.=20

A second meeting was held four days later and the rough outlines of a=20
solution began to emerge, but time had run out on the Clinton team. The onl=
y=20
question left was how to handle an executive order to keep the lights on in=
=20
California.=20

On the Wednesday before Inauguration Day, Gene Sperling, Mr. Clinton's top=
=20
economic adviser, and his Bush counterpart, Lawrence Lindsey, sat down for =
a=20
final discussion in a second-floor office at the White House. They agreed t=
o=20
one last Clinton order that would reach, by three days, into the Bush term.=
=20
The goal was to give the Bush team some breathing room.=20

The next day, Mr. Bush and his top advisers settled into the Blair House in=
=20
Washington to put the finishing touches on his inaugural speech. But their=
=20
work was at times interrupted by discussions about the energy crisis. That=
=20
night, Mr. Lindsey arrived and briefed the president on his meeting with Mr=
.=20
Sperling.=20

On Inauguration Day, Mr. Bush received a congratulatory call from Californi=
a=20
Gov. Gray Davis, who had stayed in Sacramento because of the crisis. In tha=
t=20
call, Davis aides say, the Democratic governor made his first direct pitch =
to=20
Mr. Bush for an extension of the Clinton executive order forcing energy sal=
es=20
to California utilities. While the two men diverge politically, they had=20
worked together on issues affecting border states. Last June, Mr. Bush was=
=20
one of three U.S. governors who joined six Mexican governors at a dinner=20
hosted by Mr. Davis in Sacramento's Crocker Art Museum. Their shared=20
experiences as state leaders made Mr. Bush sympathetic to Mr. Davis's reque=
st=20
for extra time to get a recovery bill through the state legislature.=20

On Sunday night, Mr. Abraham, the new energy secretary, called Mr. Davis to=
=20
hear another pitch, and the two men spoke again on Monday, the first offici=
al=20
working day of the Bush administration. While Mr. Davis was sounding out Mr=
.=20
Abraham, Mr. Lindsey met with Mr. Bush in the Oval Office and recommended=
=20
that he grant the extension. The strongest argument in favor of issuing the=
=20
order, Mr. Lindsey says, was Mr. Bush's belief that the federal government=
=20
should help states solve their own problems. Later that day, while Mr. Bush=
=20
was highlighting education reform, Mr. Lindsey, Mr. Abraham, Commerce=20
Secretary Donald Evans, Treasury Secretary Paul O'Neill, and Christine Todd=
=20
Whitman, director of the Environmental Protection Agency, began sorting out=
=20
the administration's short-term and long-term responses to the crisis.=20

On Tuesday, Mr. Bush discussed energy with his economic policy team, which=
=20
included Messrs. Cheney and Lindsey, Chief of Staff Andrew Card, Deputy Chi=
ef=20
of Staff Josh Bolten, and top aides Karen Hughes and Karl Rove. Mr. Bush to=
ok=20
a seat in front of the Oval Office fireplace while his aides settled in on=
=20
small couches. The energy crisis had to be managed on two fronts, Mr. Bush=
=20
told the group. Short-term, they had to do what they could for California.=
=20
But an equally important objective needed to be development of a=20
comprehensive policy for the country because of the broad economic=20
implications of the crisis, he said.=20

They weighed setting up a cabinet-level task force, an idea that Messrs. Bu=
sh=20
and Cheney appeared to have already discussed privately. The two men often=
=20
confer each morning, before or after the regularly scheduled=20
national-security briefing. They also chat throughout the day as they come=
=20
and go from meetings. As the group hammered out the details of which agenci=
es=20
needed to be represented on the task force, it was not lost on anyone that=
=20
the energy crisis in the West may also be an opportunity to build support a=
nd=20
a sense of urgency for their national energy agenda.=20

Mr. Bush tested the political waters the next day in the Cabinet Room durin=
g=20
a meeting with bipartisan leaders from Capitol Hill, according to Nevada=20
Democrat Sen. Harry Reid. This time, it was the president who raised the=20
subject, and Western lawmakers jumped at the call for stronger leadership a=
nd=20
action on the issue. The conversation didn't go into specifics though,=20
because "we would have gotten into an argument" over Mr. Bush's support for=
=20
drilling in Arctic National Wildlife Reserve, recalls Mr. Reid, an ardent=
=20
opponent of that proposal and a staunch supporter of expansion of renewable=
=20
energy.=20

On Friday, the White House was teeming with educators, lawmakers, governors=
=20
and citizens who had come to witness the transition to a new administration=
.=20
After a public event hosted by Mr. Bush to highlight education, four=20
governors -- Messrs. Leavitt and Geringer, Arizona's Jane Dee Hull, and=20
Idaho's Dirk Kempthorne -- slipped into Mr. Cheney's tiny West Wing office =
to=20
talk about energy. The room smelled of fresh paint, and the glasses were so=
=20
new that they lacked the presidential seal. For nearly an hour, Mr. Cheney=
=20
probed the governors about how the crisis was affecting their states and=20
constituents. None of the governors brought the issue up with Mr. Bush.=20

The governors decision to seek out Mr. Cheney rather than intrude on Mr.=20
Bush's choreographed agenda created an awkward moment the following Monday=
=20
when Mr. Bush announced the creation of the Cheney-led energy policy group.=
=20
"Can't think of a better man to run it than the vice president," Mr. Bush=
=20
said. "We're very aware in this administration that this situation in=20
California is beginning to affect neighboring states. Western governors cam=
e=20
to see the vice president," he said, and then rushed to add -- "and they ca=
me=20
to see me, as well."=20

Since that announcement, Mr. Cheney has taken over the job of creating an=
=20
energy-policy bill and Mr. Bush receives regular updates from Mr. Lindsey,=
=20
including a session held last night just before the president's trip to=20
Mexico. But the potential political and economic ramifications of the energ=
y=20
crunch on the new administration are as layered as the problem itself. And =
as=20
consumers face the full cost of the crisis, pressure will become enormous o=
n=20
Mr. Bush to wade deeper into it.=20

Administration officials worry that high energy costs could prompt consumer=
s=20
to cut household budgets and persuade factories to begin layoffs. The "soft=
=20
landing" that the Bush administration is counting on could become a hard on=
e=20
and threaten the government surpluses Mr. Bush must have to sustain his tax=
=20
cut and other domestic initiatives. As Mr. Bush himself warned when he=20
unveiled his national energy policy during a September campaign stop in=20
Saginaw, Mich.: "Our nation has had three recessions in the last generation=
,=20
and each one was tied to an energy shock."=20

The Western energy crisis also will continue to test the balance between Mr=
.=20
Bush's commitment to open markets and his sympathy for the plight of a fell=
ow=20
governor. The decision to extend the Clinton forced-sales order was "a very=
=20
difficult call," Mr. Lindsey says, in part because the help provided to=20
California came at the expense of the utility customers in other Western=20
states, several of which are governed by Mr. Bush's close Republican=20
colleagues. "This was not a costless extension," Mr. Lindsey says. "There's=
 a=20
lot of pain in the West for having done the two-week extension."=20

But the supply crunch that drove up wholesale costs this winter may only ge=
t=20
worse as temperatures warm in the West and residents from California to New=
=20
Mexico turn on their air conditioners. Republican officeholders, wary of th=
e=20
sort of political backlash that helped cost one California Congressman his=
=20
seat last November, are pressing for further federal intervention. Alaska=
=20
Sen. Frank H. Murkowski, the powerful chairman of the Senate Energy and=20
National Resources Committee, says a market-based cap on wholesale prices m=
ay=20
be needed for a transitional period.=20

But Mr. Bush is flatly rejecting the idea of price caps. "A short-term dela=
y=20
of a needed solution," he says. The idea is also anathema to Mr. Cheney,=20
whose first White House tour during the Ford administration was dominated b=
y=20
an energy crisis made more complex by President Nixon's policy of price=20
controls. Nasdaq Chairman Frank Zarb, who served as Mr. Ford's energy czar=
=20
and worked with Mr. Cheney and other aides while crafting an energy policy,=
=20
says the price controls were "just a dumb idea." In a recent interview, Mr.=
=20
Lindsey said even a temporary cap on natural gas or electricity is not=20
something he'd recommend. "Anyone who looks at the history of price caps=20
would have to suspect one that was so-called temporary," he says.=20

But adhering to free-market principles could yet become a drag on Mr. Bush'=
s=20
popularity, warns former U.S. Sen. Bennett Johnston, a Democrat Mr. Bush on=
ce=20
considered for energy secretary. If the administration takes no action and=
=20
prices remain high, he says, "people will start trying to find somebody to=
=20
blame."=20
---=20
John Fialka contributed to this article.



Generators: No Plans To Build Peaking-Pwr Plants In Calif

02/16/2001
Dow Jones Energy Service=20
(Copyright (c) 2001, Dow Jones & Company, Inc.)=20

(This article was originally published Thursday)=20
By Jessica Berthold=20
OF DOW JONES NEWSWIRES=20

LOS ANGELES -(Dow Jones)- Major electricity suppliers with experience=20
building power plants in California said Thursday they have no plans to=20
construct new peaking units in the state for operation by summer 2001.

Their position raises questions about whether Gov. Gray Davis will be able =
to=20
get 5,000 megawatts of new power on California's grid by July, a target he=
=20
announced last week.=20

Davis' plan offers incentives to generators, but it also leaves key issues=
=20
unsettled, creating uncertainty in the market. And time is short. If the ne=
w=20
plants are to come on line, construction will have to begin by mid-March.=
=20

"We're not going to be able to have any peakers this summer," said Mark=20
Palmer, spokesman for Enron Corp (ENE). "It's not possible physically, and=
=20
there's no market that would allow plants to be profitable."=20

Davis' plan calls for 5,000 megawatts of additional generation to come on=
=20
line in the state by July 2001. Roughly half of that power will come from=
=20
large plants now under construction and from easing environmental=20
restrictions, thus allowing plants currently off line to run as long as=20
operators buy emission credits.=20

The other half will come from peaking generation units - typically small=20
units designed to run only during periods of high demand. The state=20
Independent System Operator has contracts for construction of 1,279 MW wort=
h=20
of peakers. The governor hopes to get 1,000 MW more through an emergency=20
order cutting the permit process from four months to 21 days.=20

But generators say cutting permit time is not enough of an incentive for=20
generators to build in the state.=20

"While the governor's announcement about streamlining the approval process=
=20
appears attractive on the face of it, there are still problems of=20
creditworthiness and regulatory uncertainty," said Richard Wheatley,=20
spokesman for Reliant Energy (REI). "We have to allocate our equipment for=
=20
projects which will have the greatest potential to succeed. We don't have a=
ny=20
projects that could be on the ground in California this summer."=20

Generators Fear They Won't Recover Investment=20

Generators say they are wary of investing more capital, in part because the=
=20
state Department of Resources would likely be signing the contracts for the=
=20
1,000 MW of emergency power, and they've been burned once already by the DW=
R.=20

Generators thought the DWR was covering the state's entire "net short"=20
electricity needs in recent weeks. But last week, the agency said it has no=
t=20
been paying for power it deemed unreasonably priced. That means the bills g=
ot=20
passed to the state's two investor-owned utilities, which haven't paid thei=
r=20
power bills in weeks due to cash and credit problems.=20

Another problem, say generators, is that they don't know what rate of retur=
n=20
they can expect from the peakers. The governor's order says the peaker powe=
r=20
must be sold only to the DWR and at a "reasonable rate" - but that rate has=
=20
not been defined.=20

"Exactly how the state determines reasonableness is the key question," said=
=20
Tom Williams, spokesman for Duke Energy (DUK).=20

Williams added that Duke wouldn't build peakers for the summer, because the=
=20
company "already has enough risk in that market right now."=20

If the state could guarantee a workable market for power this summer,=20
generators would rush to build in the state, because they'd know they could=
=20
recover their costs, said Enron's Palmer. But with the state's history of=
=20
price caps, generators simply see to much uncertainty, he added.=20

A Mirant Corp. (MIR) spokeswoman said the company had not announced any pla=
ns=20
to build new peakers. Calpine Corp. (CPN) said it was still considering its=
=20
options, but planned to concentrate this summer on larger generation projec=
ts=20
already under way in California.=20

ISO Peaker Program Also In Jeopardy=20

The ISO peaker program, which has 1,279 MW of projects due on line by summe=
r=20
and currently in various stages of completion, is also in jeopardy due to=
=20
generators' concerns they won't be paid enough to cover their investment,=
=20
said an ISO spokesman who helps manage the peaker program.=20

"Credit concerns are a real issue among generators at this point," said Bob=
=20
Theaker, ISO manager of reliability contracts. "The way our tariff authoriz=
es=20
us to pay generators, we would levy an uplift on people who serve load=20
through the ISO grid - in essence, it comes down to the utilities."=20

Theaker said the governor is still looking into ways that generators would =
be=20
paid for their peaker contracts, given that the utilities are unable to pay=
.=20

"A lot of projects are in suspended animation right now as people wait to s=
ee=20
how they will get paid,"=20

Theaker said. "We don't know how far (the governor's) discussions have=20
progressed, but it's got to be resolved soon because the development and=20
building of these projects requires a 3-4 month lead time."=20

Theaker added that mid-March would be the latest that construction could=20
begin or resume if the state expected to see any power from peakers by June=
=20
15.=20

-By Jessica Berthold; Dow Jones Newswires; 323-658-3872;=20
jessica.berthold@dowjones.com




Developments in California's electricity crisis
By The Associated Press

02/16/2001
Associated Press Newswires=20
Copyright 2001. The Associated Press. All Rights Reserved.=20

A look at developments in California's electricity crisis:=20

THURSDAY:

- California power regulators extend a Stage 3 alert for the 31st straight=
=20
day, scrambling to find enough power to avert rolling blackouts.=20

- Gov. Gray Davis says he is convinced the state acquisition of Southern=20
California Edison and Pacific Gas and Electric Co.'s transmission systems=
=20
would make the utilities financially viable again. He gives Democratic=20
legislative leaders his utility debt-relief plan, but swears them to secrec=
y=20
and declines to release details himself.=20

- The California Energy Commission's plant siting committee recommends that=
=20
the commission license a 500-megawatt plant in western Kern County. The=20
Western Midway Sunset Cogeneration Project would be located near Derby Acre=
s=20
and be the fifth power plant approved for the county since April 1999. It=
=20
would produce enough electricity for about a half-million households.=20

- The state Public Utilities Commission extends an order to help PG&E suppl=
y=20
its customers with natural gas. The PUC votes unanimously to let the utilit=
y=20
use its revenue to pay off natural gas bills first for at least 90 more day=
s.=20

- Eight "renewable energy" suppliers, including wind-, solar-and geothermal=
=20
electricity generators, among others, form a creditors committee to decide=
=20
how to deal with Edison's failure to pay about $210 million in bills from=
=20
them since November.=20

- Electricity wholesalers and state power grid officials disagree on the=20
meaning of a key Federal Energy Regulatory Commission ruling.=20

FERC says the ISO can't waive a requirement that PG&E and Edison be=20
creditworthy. Suppliers say that backs up their argument that the state,=20
already buying a third of the power the strapped utilities' customers use,=
=20
must take responsibility for last-minute power buys the Independent System=
=20
Operator makes to fill gaps in Edison's and PG&E's supplies. The ISO conten=
ds=20
the ruling backs up their argument that they can keep billing Edison and PG=
&E=20
for the emergency power they buy from the wholesalers, regardless of the=20
utilities' ability to pay for it.=20

- The chairman of the House energy panel says California's power problems=
=20
should not signal the demise of electricity deregulation. Rep. Billy Tauzin=
,=20
R-La., holding a hearing on deregulation, says problems similar to=20
California's could develop in other states if competition in the electricit=
y=20
markets is handled unwisely.=20

- Assemblyman John Dutra, D-Fremont, proposes legislation that would make o=
il=20
refineries, pipelines and fuel production plants among the last hit if ther=
e=20
are rolling blackouts.=20

- A hearing on a lawsuit by Duke Energy against Davis is delayed after U.S.=
=20
District Judge Matthew Byrne in Los Angeles recuses himself, saying he owns=
=20
500 shares of Edison International stock and is a friend of John Bryson, he=
ad=20
of Southern California Edison's parent company.=20

Duke is challenging Davis' authority to seize long-term energy contracts=20
owned by Edison and PG&E. Davis commandeered the contracts rather than see=
=20
them sold by the California Power Exchange to pay utility debts.=20

- In another federal court case in Los Angeles, a group of energy wholesale=
rs=20
and the exchange agree to delay their legal battle while federal regulators=
=20
consider the underlying issues. The exchange has tried to charge power=20
generators to cover payments owed to it by Edison and PG&E. Enron, Avista a=
nd=20
other generators oppose the so-called charge backs. The exchange argues it=
=20
had no choice after Davis commandeered the utilities' contracts, which had=
=20
served as collateral for their debts.=20

- PG&E's stock closes at $12.84 per share, up .34 cents. The stock of Ediso=
n=20
International, the utility's parent, rises .06 cents a share to close at=20
$12.31.=20

- Talks continue on an attempt by AES Corp. owner of a Huntington Beach pow=
er=20
plant that has agreed to pay $17 million to settle air pollution claims, to=
=20
crank up two dormant generators to feed the state's ailing power grid. The=
=20
proposed retrofitting is the subject of a workshop in Sacramento to discuss=
=20
how AES would account for its environmental impacts. The move requires stat=
e=20
permission; consumer groups and local leaders oppose it.=20

WHAT'S NEXT:=20

- U.S. District Judge Frank Damrell Jr. holds a hearing Friday in Sacrament=
o=20
on the ISO's attempt to continue requiring three major wholesalers to sell =
it=20
power. He is weighing whether to replace his temporary restraining order=20
against the three companies with a preliminary injunction, the next step=20
before a permanent injunction.=20

- The governor plans Friday afternoon to announce his proposal to help Edis=
on=20
and PG&E pay off their debts.=20

- A judge in Los Angeles holds a hearing Friday on Duke Energy's challenge =
of=20
Davis' authority to seize long-term electricity contracts owned by Edison a=
nd=20
PG&E.=20

- State power regulators anticipate a Stage 3 power alert will remain in=20
effect at least through Friday.=20

- A federal judge in Los Angeles holds a hearing Tuesday on energy=20
wholesalers' challenge of the state Power Exchange's attempt to make them=
=20
cover payments owed it by Edison and PG&E.=20

- An order from Davis requiring businesses to substantially reduce outdoor=
=20
lighting after business hours takes effect in mid-March. Businesses that fa=
il=20
to comply face a potential fine of $1,000 a day.=20

THE PROBLEM:=20

- High wholesale power costs, high demand, transmission glitches and a tigh=
t=20
supply worsened by scarce hydroelectric power in the Northwest and=20
maintenance at aging California power plants are all factors in California'=
s=20
power crisis.=20

Much of the problem is blamed on the state's deregulation of the power=20
industry. The state Public Utilities Commission ordered Edison and PG&E to=
=20
sell their power plants and buy wholesale electricity. Meanwhile, the state=
's=20
1996 utility deregulation law froze the rates the state's investor-owned=20
utilities could charge their customers.=20

Edison and PG&E say they've lost nearly $13 billion since June to high=20
wholesale prices they are barred from passing onto ratepayers, and are clos=
e=20
to bankruptcy. Electricity and natural gas suppliers, alarmed by the two=20
companies' poor credit ratings, are refusing to sell to them, leading the=
=20
state to start buying power for the utilities' nearly 9 million residential=
=20
and business customers.



Business; Financial Desk
Bush Pushes Energy Plan in Mexico Trade: President wants to cut hemispheric=
=20
barriers for oil, gas and electricity. But it may be a hard sell south of t=
he=20
border
EVELYN IRITANI
TIMES STAFF WRITER

02/16/2001
Los Angeles Times=20
Home Edition
C-1
Copyright 2001 / The Times Mirror Company=20

When President Bush meets today in Mexico with President Vicente Fox, he wi=
ll=20
deliver the same message he did to Canadian Prime Minister Jean Chretien la=
st=20
week in Washington: Let's share energy.=20

Bush wants a "hemispheric energy policy" that, although only vaguely define=
d=20
so far, would foster the seamless flow of oil, natural gas and electricity=
=20
among the three nations and reduce barriers that limit foreign access to=20
energy resources.

It is a goal that Chretien embraces but that presents Fox with big practica=
l=20
and constitutional problems.=20

And the White House initiative faces opposition from other quarters as a=20
result of California's power debacle, which is now drawing blame for soarin=
g=20
energy prices in Canada and Mexico, as well as the United States. It has=20
sparked a global reassessment of energy deregulation and could turn America=
's=20
energy industry into the latest target for anti-globalization forces.=20

"The energy companies could easily become a poster industry for the message=
=20
that, if globalization means a market economy, then that's bad news," said=
=20
Gary Hufbauer, a trade analyst at the Institute for International Economics=
=20
in Washington.=20

As the world's biggest single consumer of energy, the U.S. has a point of=
=20
view that to some outsiders--especially in energy-producing countries such =
as=20
Mexico and Canada--is purely one of self-interest. Critics liken the U.S.-l=
ed=20
deregulation effort to economic imperialism disguised as free trade, where=
=20
the U.S. forces other countries to open their energy markets to powerful=20
American firms that then siphon off the energy for SUV-driving,=20
electricity-gobbling Americans.=20

"We now have a continental energy market largely run by American corporatio=
ns=20
that is based on a model of increased consumption and the premise that we'l=
l=20
never run out [of energy]," said Maude Barlow, chairwoman of the Ottawa-bas=
ed=20
Council of Canadians, that country's largest public-interest group.=20

In his first few weeks in office, Bush has used California's electricity=20
shortage as ammunition to promote the need for a long-term energy policy=20
centered on greater development of oil and natural gas. One element would=
=20
have oil, gas and electricity flow more freely within North America.=20

So far, the former Texas oilman's plans for a continental energy market hav=
e=20
been long on rhetoric and short on details. U.S.-Canada trade in energy is=
=20
already largely unfettered, with Canada sending $27.6 billion in energy=20
products south in 1999. And U.S. energy firms are major players in Canada.=
=20

"We are in the business of selling them oil and gas and electricity,"=20
Chretien said after meeting with Bush.=20
But as its own energy reserves dwindle and its appetite grows, the United=
=20
States has a lot to gain from reducing barriers everywhere to trade in oil,=
=20
gas and electric power, an economic enterprise valued at between $600 billi=
on=20
and $1 trillion worldwide.=20

That is why Washington over the years has sought to open up energy markets=
=20
through pacts such as the North American Free Trade Agreement and the World=
=20
Trade Organization.=20

Previously, energy services such as oil production and electricity=20
transmission were not part of trade agreements because those areas were=20
largely controlled by government-owned monopolies. But today, at least 100=
=20
countries are in some stage of energy deregulation or privatization,=20
according to Robert Michaels, a deregulation expert at Cal State Fullerton.=
=20

Deregulation advocates argue that tearing down these barriers will foster=
=20
investment in infrastructure in energy-rich but undeveloped countries,=20
speeding the construction of power systems. They point out that nearly 2=20
billion people around the world don't even have access to electricity or=20
other forms of commercial energy.=20

But the California experience has changed attitudes everywhere. Energy=20
analyst Lawrence Makovich of Cambridge Energy Research Associates in=20
Cambridge, Mass., has been traveling the globe urging anxious governments n=
ot=20
to turn their backs on energy deregulation because of California's failed=
=20
deregulation scheme.=20

"We are at a very critical point here," Makovich said. "Are we going to=20
continue and fix this market and get things right, or retreat back toward=
=20
government control and regulation?"=20

Trade agreements such as the WTO establish rules on how markets should be=
=20
liberalized and the proper role of government. A U.S. proposal to add energ=
y=20
services to the WTO trade pact, for example, would require countries to do=
=20
away with excessive tariffs on drilling equipment and prohibit preferential=
=20
treatment for domestic firms in bidding for oil concessions or getting acce=
ss=20
to electrical grids.=20

"There are reasons why historically these [energy markets] were set up as=
=20
integrated monopolies, because they knew security of supply was essential t=
o=20
any modern economy," said Ellen Gould, an economist in Vancouver, Canada, w=
ho=20
served on the board of BC Hydro, British Columbia's publicly owned utility.=
=20
"You can't have the lights go out. [But] you can't introduce market forces=
=20
unless you're prepared to see a little blood."=20

Political and economic tensions over energy in the NAFTA region, especially=
=20
in Canada, illustrate the obstacles facing the Bush initiative.=20

Under NAFTA, Canada agreed to reduce government intervention and ensure a=
=20
more stable flow of energy across the border in exchange for increased acce=
ss=20
to the much larger U.S. market. That included a pledge not to give Canadian=
=20
customers preferential treatment by charging them less than foreigners and =
to=20
maintain exports at a certain level, even if Canada was experiencing a=20
shortfall or price surges at home.=20

Since then, Canada's exports to the United States have jumped dramatically.=
=20
Canada's share of the U.S. natural gas market has tripled to 15%.=20

Throughout California's energy crisis, Canadian producers and governments i=
n=20
resource-rich provinces have enjoyed a windfall because of the resulting=20
price run-ups.=20

But in Alberta, which in January became the first Canadian province to=20
deregulate electricity, a sharp spike in gas and electricity prices has=20
triggered a consumer and business backlash. Energy has become a hot issue i=
n=20
an upcoming provincial election, and the government has provided hundreds o=
f=20
millions of dollars in energy rebates to unhappy customers. Even the=20
province's largest manufacturers have pronounced electricity deregulation a=
=20
mistake.=20

Steven Shrybman, a trade attorney in Ottawa, believes Canada signed onto a=
=20
pact that undermined its sovereignty while allowing the United States, by=
=20
getting more oil and gas from Canada, to reduce its dependence on oil from=
=20
the Middle East and lessen the likelihood of going to war to keep its cars=
=20
and heaters fueled.=20

From the American point of view, Shrybman says, "I regard these provisions =
of=20
NAFTA as an alternative to the Iraq war."=20

In Mexico, the constitution requires that natural resources remain under=20
domestic control. The country was exempted from most of NAFTA's energy=20
market-opening provisions. That has made foreign firms wary of investing in=
=20
Mexico's energy sector.=20

"You can't have any foreign ownership, and yet they want investment and=20
joint-venture partners," said Enron's Hillings. "There's an awful lot of ga=
s=20
right around the Texas-Mexico border that's never been developed."=20

Meanwhile, Mexico can't even meet its own burgeoning demand for gasoline or=
=20
electricity. By some estimates, Mexico needs to invest $30 billion in energ=
y,=20
including natural gas to feed new power plants, money that Fox has said wil=
l=20
have to come from outside investors. U.S. energy firms are already building=
=20
power plants in Baja California and other parts of Mexico, but nearly all t=
he=20
output is needed in Mexico itself.=20

Sergio Rivas, an economist at Primer Enfoque, an energy consulting firm in=
=20
Mexico City, predicted that Fox will have trouble persuading Mexicans=20
suffering brownouts themselves that they should provide energy to their=20
wealthier northern neighbors.=20

"People would ask, 'How is it possible we are thinking to supply electricit=
y=20
to the United States when we don't have enough for our own consumption?' "=
=20
Rivas said.=20

"In the political sense, this issue is very, very complicated."=20

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)=20
Oil, Gas and Power=20
Energy imports from Canada and Mexico soared in the 1990s, but President Bu=
sh=20
wants more.

GRAPHIC: Oil, Gas and Power, Los Angeles Times;=20



Enron Corp. to Increase Investment in Argentina, Cronista Says
Bloomberg News, 2/16/1 8:18 (New York)

Buenos Aires, Feb. 16 (Bloomberg) -- Azurix Corp., a unit of the world's=20
largest energy trader Enron Corp., will boost investment in an Argentine=20
water concession by 50 percent this year under an accord that ends months o=
f=20
wrangling, the daily Cronista reported.

Azurix will spend an additional $44 million this year to improve drinking=
=20
water services under its concession to deliver potable water and other=20
services to Buenos Aires province, the paper said.

The agreement brings to a close a conflict in which Buenos Aires Governor=
=20
Carlos Ruckauf threatened to revoke Azurix's contract by convening a specia=
l=20
legislative sessions after residents complained of poor service.

Houston-based Azurix has invested $94 million of the $439 million it promis=
ed=20
to win a 30-year water concession with Argentina's most populous province.=
=20
Residents of Bahia Blanca, a port and petrochemical center, complained in M=
ay=20
of foul smelling water.

(El Cronista, 2/16, p. 11) {ELCR <GO>}

--John Lyons in Buenos Aires (5411) 4321-7738 or ajones5@bloomberg.net=20
through the New York newsroom at (212) 318-2300/lm




Petrobras, Repsol Plan $300-Mln Bolivian Pipeline, Valor Says
Bloomberg News, 2/16/1 7:59 (New York)

Rio de Janeiro, Feb. 16 (Bloomberg) -- Petroleo Brasileiro SA, the=20
state-control oil company, and Repsol YPF SA plan to build a $300 million=
=20
Bolivian pipeline to transport natural gas, avoiding a pipeline in which=20
competitor Enron Corp. has a stake, Valor newspaper reported.

Petrobras, Repsol-controlled Petrolera Andina SA and France's TotalFinaElf =
SA=20
plan to build the 420-kilometer (260 miles) pipeline to link gas reserves a=
t=20
Bolivia's San Antonio and San Alberto fields to the $2 billion,=20
Petrobras-controlled GasBol pipeline that carries the gas to Brazil's most=
=20
industrialized regions. Construction will take about 20 months, Valor said.

The 24 million cubic meters a day pipeline will allow the companies to avoi=
d=20
paying high tolls to Houston-based Enron, which shares with Bolivia's=20
government control of a competing pipeline, known as Yabog, the daily said.

Petrobras, which only recently lost its monopoly rights to supply Brazil wi=
th=20
gas, is battling Enron and companies such as U.K.-based BG Plc for gas supp=
ly=20
contracts in Brazil, hoping its recently constructed 30 million cubic meter=
 a=20
day GasBol pipeline will allow it to undermine competitors. Brazil's petrol=
eum
regulator ANP recently dealt Petrobras a blow, allowing Enron and BG to=20
transport gas through GasBol while Petrobras fails to use its full capacity=
.

<Valor B3 2/16 http://www.valoronline.com.br>

--Joshua Schneyer in Rio de Janeiro (5521) 516-1552 through the Sao Paulo=
=20
newsroom (5511) 3048-4530/bh

=20


International
Governor of Buenos Aires Shoots for the Presidency, the People's Discontent=
=20
His Ammunition
By Pamela Druckerman
Staff Reporter of The Wall Street Journal

02/16/2001
The Wall Street Journal
A9
(Copyright (c) 2001, Dow Jones & Company, Inc.)

BUENOS AIRES -- While many Argentines were still nursing hangovers on New=
=20
Year's Day, Buenos Aires Gov. Carlos Ruckauf was holding a news conference.=
=20

His urgent message to the nation: "I'm going to be the next president."

Never mind that Argentina's sitting president, Fernando de la Rua, was just=
 a=20
year into his four-year term. Mr. Ruckauf was once again reveling in his ro=
le=20
as the self-appointed spokesman for victims of a painful recession widely=
=20
blamed on Mr. de la Rua.=20

Governor of a state comprising more than a third of the country's populatio=
n=20
and total output, Mr. Ruckauf has struck a chord with beleaguered Argentine=
s=20
by sounding off about surging crime and stubbornly high unemployment. He ha=
s=20
also sided with local businesses against foreign competitors and free-trade=
=20
deals and with consumers against aspects of the country's sweeping=20
privatization program.=20

The strategy has paid big dividends for the 56-year-old governor. In recent=
=20
opinion polls, he ranked twice as popular as Mr. de la Rua and had a higher=
=20
positive rating than any other politician on the national scene.=20

But certain positions have increasingly put Mr. Ruckauf at odds with=20
multinational companies operating in Buenos Aires state. Last month, his=20
administration ordered the state legislature to review a $439 million=20
water-distribution contract held by Azurix Corp., which is majority-owned b=
y=20
Houston's Enron Corp., following a contract dispute. Mr. Ruckauf crossed=20
swords with Wal-Mart Stores Inc. of Bentonville, Ark., recently, when his=
=20
government backed a law that greatly restricts the size of new hypermarkets=
,=20
a move seen as an effort to protect local retailers.=20

Observers tend to view Mr. Ruckauf's more-populist platforms as a vehicle f=
or=20
the governor's political ambitions, rather than the product of deeply held=
=20
beliefs. Before becoming a firebrand governor, Mr. Ruckauf was a low-profil=
e=20
sidekick as vice president to former President Carlos Menem, who was a=20
confirmed believer in free markets. Analysts note that Mr. Ruckauf regularl=
y=20
courts foreign investors to buy the state's global bonds and appointed a=20
former Argentine ambassador to the U.S., Diego Guelar, to nurture high-leve=
l=20
contacts with U.S. officials. "He's a total pragmatist," says political=20
analyst Rosendo Fraga. In terms of Mr. Ruckauf making major policy changes,=
=20
he says, "there's a low probability that he'll do it."=20

Mr. Ruckauf has also drawn the ire of some within his own Peronist party,=
=20
which ceded the presidency to Mr. de la Rua's Alliance party in December=20
1999. Party chief Mr. Menem, along with several other Peronist governors, a=
re=20
believed to have their eyes on the 2003 presidential race. And many were=20
jarred when Mr. Ruckauf attacked his opponent in the gubernatorial race for=
=20
being pro-abortion in an appeal to the party's ultraconservative wing.=20
Abortion is generally outlawed in the largely Catholic country and typicall=
y=20
isn't raised as an issue in political campaigns.=20

But the governor's no-holds-barred message is resonating strongly with=20
ordinary Argentines, who quickly soured on their new president when he fail=
ed=20
to bring fast economic relief. In almost daily declarations, Mr. Ruckauf ha=
s=20
called for a crackdown on youth violence, sweeping tax cuts and increased=
=20
funding for small and medium-sized businesses. He has attacked Brazil,=20
Argentina's partner in the regional trade pact Mercosur, for robbing jobs=
=20
from Argentina. And he recently led an appeal to the national government fo=
r=20
a "social aid package" to accompany the nearly $40 billion financial packag=
e=20
led by the International Monetary Fund in December. "I make proposals that=
=20
are absolutely clear," Mr. Ruckauf said recently.=20
Opponents say Mr. Ruckauf's popularity surge is just a blip on the screen=
=20
that will disappear when the economy bounces back, as it shows some signs o=
f=20
doing.=20

So far, though, enthusiasm for Mr. Ruckauf hasn't been mitigated by the fac=
t=20
that he hasn't actually managed to cut crime and that unemployment has stuc=
k=20
close to 15%. He also hasn't taken the fall for his state's worsening=20
finances: Late last year, Standard & Poor's downgraded the province's forei=
gn=20
and local-currency debt. S&P analyst Diana Mondino says current expenses ha=
ve=20
increased "dramatically" under Mr. Ruckauf's administration.=20

"Ruckauf's strong image has more to do with his personal attributes than hi=
s=20
performance," explains pollster Graciela Romer. According to her surveys on=
=20
unemployment and security issues, "People don't think the facts have change=
d."




`Terms of Reference of Godbole Panel Must Include DPC Review'
The Times of India News Service

02/16/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)

MUMBAI: N.D. Patil, chairperson of the coordination committee of the=20
Democratic Front coalition, has categorically told chief minister Vilasrao=
=20
Deshmukh that the terms of reference for the Godbole committee must include=
 a=20
review of the Dabhol power project.=20

Mr Patil told The Times of India News Service that the terms should also=20
provide for reviewing all clearances given to the project and examining all=
=20
the relevant laws and notifications.

Mr Patil, a former minister of the Peasants and Workers party and a respect=
ed=20
politician, is a staunch opponent of the project. He has demanded the=20
scrapping of phase II of the project saying that it is exploitative and wou=
ld=20
imposes a severe burden on the state's finances and the consumers.=20

Mr Patil is of the view that the second phase can be scrapped as the=20
agreement with Enron violates several provisions of the Contracts Act. Some=
=20
experts feel that phase II would be so deleterious to the state and the=20
consumers that it would be more acceptable to bear the costs of scrapping i=
t.=20

The Godbole committee will make recommendations not only on the Dabhol powe=
r=20
project but also on two other major proposed private sector projects of=20
Reliance at Patalganga and Ispat group at Bhadrawati.=20

The Maharashtra state electricity board had signed power purchase agreement=
s=20
for both the projects during the Shiv Sena-BJP administration. However, the=
=20
MSEB told the government that it would find it difficult to absorb the high=
=20
volume of additional power. The Ispat project has a capacity of 1082 MW and=
=20
Reliance 447 MW.=20

Besides, if the proposed 500 MW plant of BSES comes up at Saphale near=20
Palghar, it would further create problems w.r.t cost of purchasing power fo=
r=20
the MSEB, sources said. Ideally, BSES should be ready to give a cross-subsi=
dy=20
to MSEB, sources said. Sources said the BSES was making a lot of profit sin=
ce=20
it catered to a large number of affluent consumers in Mumbai. ``While they=
=20
take away the cream, we are forced to cater to the rural areas at a low pri=
ce=20
and suffer losses,' the sources said. A senior official said the state=20
electricity board should also benefit from Mumbai's affluence.=20

The board has protested to the government against the proposed BSES plant a=
t=20
Saphale. BSES must compensate MSEB, the sources said. BSES has submitted=20
another proposal for a 500 MW coal-based unit at Nandgaon near Amravati. ``=
It=20
should not even be discussed until BSES meets its obligations by paying=20
stand-by charges for the Dahanu plant,'' the sources said.=20

Meanwhile, MSEB has launched a major drive to disconnect power supply to=20
those defaulting on bills. The daily number of disconnections has gone up=
=20
from nearly 12,000 to 20,000, the sources said on Saturday. Staff members w=
ho=20
take stern action against defaulters are being rewarded.=20

MSEB chairperson Vinay Bansal has assured honest officials that they will n=
ot=20
be penalised in any way in their drive against power thefts and defaulters.=
=20

Nearly 150,000 meters are being installed in the next few months as part of=
=20
the energy audit exercise. Power thefts will be monitored and guilty=20
employees will be suspended. So far 185 employees have been suspended=20
including one superintending engineer and 12 class I officers.=20

Oil mills in Gondia and Bhandara district of Vidarbha are opposing the=20
introduction of electronic meters as these cannot be tampered with, sources=
=20
said.



Indian Trade Unions Urge Government to Take Over Enron Project

02/16/2001
Asia Pulse=20
(c) Copyright 2001 Asia Pulse PTE Ltd.=20

MUMBAI, Feb 16 Asia Pulse - The government of India's Maharashtra state has=
=20
been urged by the Trade Unions Joint Action Committee (TUJAC) to take over=
=20
phase I of Enron's gas project and cancel phase II, saying that "whatever=
=20
compensation" necessary could be made by the government and the people of=
=20
Maharashtra.=20

Addressing a rally organised by 30 employees trade unions under the TUJAC=
=20
banner yesterday at Shivaji Park in the central Mumbai, the State Governmen=
t=20
Employees Confederation leader R G Karnik said, the TUJAC would organise a=
=20
protest march on March 15, to protest the proposed changes in the Maharasht=
ra=20
labour laws.

The TUJAC will go ahead with the march if both the federal and the state=20
governments did not change their decision which goes against the interests =
of=20
workers and the people of the state, Karnik claimed.=20

Any kind of revision of phase II is not going to help the people of=20
Maharashtra in the long run, TUJAC leaders said.=20

On the country' economic policies, "The federal government has to adopt a=
=20
rethinking on the new economic policies as it has affected the public,=20
economically and mentally," the TUJAC Deputy Convenor, A D Golandas, said.=
=20

The employees from the satellite towns of Mumbai Thane, Nashik and Pune=20
participated in large numbers in the rally, the leaders added.=20

(PTI) 16-02 2122



India: Enough is enough for Enron Corp?

02/16/2001
Business Line (The Hindu)=20
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) -=
=20
Asia Intelligence Wire=20

MUMBAI, Feb. 15. IN its quest for higher returns, Enron Corp would sell=20
assets, such as its stake in Dabhol Power Company (DPC), if the price is=20
right, says an article in BusinessWeek, quoting Enron executives.=20

The February 12 story on Enron's activities worldwide, also talked about ho=
w=20
Enron had faced a barrage of criticism in many Third World countries.

Not only has the Dabhol project been a draining experience, but it is no=20
longer seen as a wise investment, says the article. It quoted the Enron=20
President, Mr. Jeffrey K. Skilling: "We shouldn't be in there building=20
$2-billion power plants. ... Our cost of capital is too high to do that."=
=20

A spokesperson for Enron India, however, said the reference in the article =
to=20
the selling of its stake did not mean it intended to sell out of DPC=20
altogether.=20

"It is with reference to what we have already announced. We are looking for=
=20
someone to buy the additional 15 per cent we have in the company following=
=20
the Maharashtra State Electricity Board acquiring only half of the 30 per=
=20
cent stake it was to take. We have already appointed Credit Suisse First=20
Boston for the same, we want to revert to the earlier equity stake we had,"=
=20
said a spokesperson for Enron India.=20

On Mr Skilling's comment that Enron should not be "in there building=20
$2-billion power plants," Enron India spokesperson said the reference was t=
o=20
building new plants in India. "We have no further plans to build more plant=
s=20
here."=20

Kripa Raman




MSEB tightening screws on power thefts, defaulters
The Times of India News Service

02/16/2001
The Times of India=20
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)=20

MUMBAI: The Maharashtra State Electricity Board (MSEB) has started tighteni=
ng=20
its grip on defaulters and power theft in the wake of the Enron crisis. The=
=20
drive has already borne fruit with revenue collections rising and cases of=
=20
power theft in the wane.=20

Making this claim, a top MSEB official said that the government would have =
to=20
decide the fate of the DPC project at the political level and not depend on=
=20
the Godbole committee for solutions.

Speaking to TOINS on the condition of anonymity, he said that over the past=
=20
few months MSEB had shown better recovery; the collection in January was Rs=
=20
911 crore against Rs 795 crore in December. It is expected to be around Rs=
=20
875 crore in February. Also, electricity lines of more than 20,000 defaulte=
rs=20
were being disconnected on a daily basis.=20

Generation, too, has shown considerable improvement. Plant load factor (PLF=
)=20
of MSEB's generation plants has achieved a peak capacity of 71 per cent,=20
which is a national record, he stated.=20

The main problem was MSEB's tariff structure, he said. The official pointed=
=20
out that 1.18 crore of MSEB's 1.30 consumers were subsidised, i.e. nine out=
=20
of every ten enjoy receive power at concessional rates. He, however, pointe=
d=20
out that despite these shortcomings, MSEB continued to be one of the most=
=20
efficiently run SEBs in the country.=20

The official conceded that power thefts continued to be a major cause of th=
e=20
losses and also accepted the fact that there existed a nexus between power=
=20
pilferers and some MSEB personnel. He revealed that nearly 200 MSEB officer=
s=20
had been punished for turning a blind eye on power thefts.=20

The official said the Rajadhyaksha committee, appointed some of years ago b=
y=20
the former Shiv Sena-BJP government to review Maharashtra's power situation=
,=20
had strongly recommended metered power supply all over the state. Neither=
=20
this recommendation nor other important recommendations have been=20
implemented. Describing agriculturists' demand for power as a=20
`subsidy-induced demand', the official said it had been observed that=20
electric motors were left running even after the required amount of water w=
as=20
drawn. This was happening simply because power was cheap, he said.


India State Pays Bills to Enron, But Electricity Crunch Persists =20
John Elliott - Special to the International Herald Tribune=20

Friday, February 16, 2001=20

BOMBAY - The Indian state of Maharashtra has paid Enron Corp. $17 million i=
n=20
overdue bills from a troubled power project,
temporarily easing tensions with the U.S. company.

But the payment of the bill came only after Enron intensified the standoff=
=20
with the state, calling in the federal government, and it resolves none of=
=20
the issues that prompted the dispute. Meanwhile, a severe energy shortage i=
n=20
India continues to worsen.

The confrontation was prompted by increases last year in the price of power=
=20
from the Enron plant, which was begun in 1995 amid a backlash of nationalis=
t=20
sentiment against the big outside investor. The state government called in=
=20
December for Enron's entire $3 billion, 2,184-megawatt project in Dabhol to=
=20
be renegotiated for a second time and stopped paying its bills.

That provoked the company last month to demand payment of overdue bills. It=
=20
invoked a central government guarantee intended to reassure skittish foreig=
n=20
investors.

The power minister, Suresh Prabhu, who comes from Maharashtra, stepped in a=
nd=20
on Monday the state government paid the $17 million due. "We spoke to the=
=20
state government and they have made their payment," Mr. Prabhu said. "Now=
=20
both sides need to talk and we need to solve this situation."

While the $17 million November payment was finally made, Enron says it is=
=20
still owed additional payments from the project.

The Enron project is part of a much wider problem. There is a national=20
shortage of power amounting to about 20 percent at peak periods, but=20
virtually bankrupt state electricity distribution boards throughout the=20
country can neither pay their bills nor provide financial guarantees for=20
builders of new power projects.

"Given the financial health of the state electricity boards, we shall very=
=20
soon reach a state of no return if we do not take corrective measures," Mr.=
=20
Prabhu said, adding that new generation, transmission and distribution=20
projects costing more than $200 billion would be needed in the next 10 year=
s.

Mr. Prabhu has two immediate aims. One is to solve the Enron dispute and=20
salvage what is left of India's reputation as a destination for foreign=20
investment. At the same time, he is pushing the state electricity boards to=
=20
revise their finances. For example, 90 percent of the Maharashtra board's=
=20
power is sold below cost - some of it is virtually free - and one-third of=
=20
its revenues disappear in theft and other distribution losses.

Analysts suggest Enron and its bankers might be willing to discuss revising=
=20
some of the Dabhol deal if they believed that the board, which is both its=
=20
customer and a partner in the project, had sufficient revenues to be able t=
o=20
pay its bills on time. For that to happen, the state government would have =
to=20
introduce changes that reduce subsidies, implement a tougher rate structure=
=20
and strengthen bill collection. The state government, however, is riven wit=
h=20
political divisions, and some leftist parties plan state-wide demonstration=
s=20
next month where they will call for the project to be scrapped.

The problem is urgent because Dabhol's second phase is due to be commission=
ed=20
in two stages in July and August, adding at least $40 million a month to th=
e=20
bills that Enron sends to the board. Then, in January, liquefied natural ga=
s=20
will begin to flow from Abu Dhabi and Oman under contracts that have alread=
y=20
been finalized.

The state will find it difficult to meet these deadliness on its own. One=
=20
solution being discussed is for the state to call off its dispute with Enro=
n=20
over the existing phase of the project and pay all outstanding bills. At th=
e=20
same time it would demand renegotiation of phase two, with the aim of=20
reducing Enron's rates and off-loading some of the project to the central=
=20
government.

The project's bankers, which include Citibank, Bank of America, ANZ Grindla=
ys=20
and ABN-AMRO, would then come under pressure to reduce financing charges,=
=20
possibly by reducing interest payments and rescheduling debt in U.S. dollar=
s=20
to Indian rupees. Enron would also be asked to reduce standing charges, whi=
ch=20
are imposed irrespective of how much electricity the company produces and=
=20
currently cost $20 million a month.

Meanwhile Enron, which is refocusing on more developed economies, is=20
reviewing its other projects in India. It has canceled a 50-50 joint ventur=
e=20
with Calcutta-based Ispat Industries for a gas-based power project at an=20
Ispat steelworks. A plan to build a telecommunications and Internet backbon=
e=20
across Maharashtra, in a joint venture with the state electricity board, is=
=20
also being reviewed.=20



Universal signs video-on-demand deal=20
By LAURA RICH=20
The Industry Standard, February 16, 2001

Universal Studios has announced it will distribute new releases and extensi=
ve=20
film archives through video-on-demand service Intertainer.=20

Subscribers to the digital cable channel will be able to choose among 300=
=20
movies from eight major movie studios at any time. The addition of Universa=
l=20
gives Intertainer the broadest selection of major motion pictures among=20
video-on-demand players, which include Blockbuster, CinemaNow and SightSoun=
d.=20
Intertainer is rolling out a service in partnership with Enron Broadband.=
=20

``Intertainer is a terrific partner for our ongoing VOD efforts because of=
=20
its experience in the category,'' Holly Leff-Pressman of Universal Televisi=
on=20
& Networks Group said in a statement.=20

Intertainer is a relatively small competitor from an audience standpoint. T=
he=20
company was formed in 1997 and just launched its VOD service last spring. T=
he=20
service is currently available in Cincinnati and Willow Grove, Pa., and wil=
l=20
be rolled out in seven more cities by the end of summer. Currently, there a=
re=20
fewer than 10,000 subscribers to Intertainer.=20

Intertainer's deal with Universal comes as Hollywood mulls the digital futu=
re=20
for film. Most studios are digitizing their films and drawing up plans to=
=20
deliver their libraries over the Internet to consumers and movie theaters.=
=20
Sony's Web-based MovieFly system is gearing up for a spring launch, and=20
Disney also is said to have a VOD system in the works. The rest of the=20
studios are said to be in varying stages of talks with Sony or Disney.=20

Intertainer continues to make strides even though studios have a history of=
=20
despising the middleman. Blockbuster has long locked horns with the studios=
,=20
which have complained that the chain was reaping ancillary film revenues th=
ey=20
should have controlled.=20

By aligning with Intertainer, the studios are supporting a new middleman by=
=20
bolstering it with a larger selection of movies than their own services=20
likely will have. Antitrust concerns prevent the studios from grouping all=
=20
their content in a single jointly owned channel. But they also are better o=
ff=20
distributing their films to as many outlets as possible.=20



California Questions Dominate Industry Conference
Reuters, February 15, 6:41 pm Eastern Time=20
By Janet McGurty=20

NEW YORK, Feb 15 (Reuters) - Hundreds of Wall Street investors gathered her=
e=20
on Thursday hoping to hear just how much risk top U.S. energy companies fac=
e=20
from California's power crisis, which has already brought the state's two=
=20
largest utilities close to bankruptcy.=20

As California moved into its 31st consecutive day of top-level power alerts=
=20
-- and lawmakers worked to piece together a rescue package designed to save=
=20
the state's cash-strapped utilities -- industry executives here tried to=20
downplay their exposure to the crisis.=20

``I am very comfortable with where we are in California,'' Ken Lay, the=20
outgoing chairman of Enron Corp. (NYSE:ENE - news), the nation's largest=20
buyer and seller of electricity, told the UBS Warburg Energy Conference.=20

Tom Mason, of California-based independent power producer Calpine Corp.=20
(NYSE:CPN - news), said his company's position was ``not precarious'' and=
=20
that he thought the problem would be settled through legislation next week.=
=20

``But the fuse is very short,'' Mason said.=20

Indeed, California's two investor owned utilities, subsidiaries of San=20
Francisco-based PG&E Corp. (NYSE:PCG - news) and Edison International=20
(NYSE:EIX - news), have run up more than $12 billion in combined debt buyin=
g=20
electricity in the wholesale market, costs they have been unable to pass on=
=20
to consumers under the state's 1996 partial deregulation law.=20

How and when the utilities will pay those bills remains to be seen -- leavi=
ng=20
a dark cloud over any company that has sold power to the state.=20

Steve Bergstrom, President and Chief Executive of Dynegy Inc. (NYSE:DYN -=
=20
news), one of the three companies which recently filed suit against the=20
state, said he had confidence the situation would be reasonably resolved.=
=20

``Our purpose is to get back 100 cents on the dollar,'' he said, adding the=
=20
suit was not meant to drive the utilities into bankruptcy.=20

Along with Dynegy, Mirant Corp. (NYSE:MIR - news) and Reliant Energy Inc.=
=20
(NYSE:REI - news) -- which in total own power plants with the capacity to=
=20
provide one-fifth of California's peak power needs -- filed the suit, seeki=
ng=20
assurance they will be paid the $400 million they are owed by the utilities=
.=20

For its part, El Paso Corp. (NYSE:EPG - news) admitted to having about $100=
=20
million in exposure for selling electricity and natural gas to California.=
=20

This is about double to what the compan Gu??? their their exposure.=20

And James Donnell, president of Duke Energy North America (NYSE:DUK - news)=
,=20
reiterated that Duke is owed a total of about $400 million, adding that it=
=20
has $110 million in reserve.=20

Other executives at the conference were more circumspect in front of the Wa=
ll=20
Street audience.  AES Corp. (NYSE:AES - news) senior vice president Kenneth=
=20
Woodcock said his company had less than $20 million in receivables due to=
=20
them from their operations in California. The largest chunk of that is the=
=20
$8.5 million owed by PG&E for buying out a long-term contract.=20

AES had purchased some old generating plants, some built as far back as 194=
9,=20
which they thought would be used as back-up.=20

But most were pushed up to running at 25 percent capacity because of=20
electricity demand, after running at just two percent of capacity for years=
.=20

``You can't put a Model T out on the Interstate and run it without it=20
breaking down,'' said Woodcock, answering criticism that outages at some of=
=20
the power plants which feed the state were calculated to raise wholesale=20
power prices.=20



Judge in Court Challenge to Gov. Gray Davis Steps Down=20
GARY GENTILE, AP Business Writer
Thursday, February 15, 2001=20
,2001 Associated Press=20

(02-15) 19:38 PST LOS ANGELES (AP) -- A federal judge who owns 500 shares o=
f=20
Edison International stock recused himself Thursday from a lawsuit filed by=
=20
another energy company against Gov. Gray Davis.=20

U.S. District Court Judge Matthew Byrne said he felt obligated to step down=
=20
because Edison is a company ``that clearly could be, if not will be, affect=
ed=20
by the outcome of this litigation.''=20

``Better now than later,'' Byrne said.=20

Based on Thursday's closing price of $12.31, Byrne's stake in Edison would =
be=20
valued at approximately $6,155. Byrne said he has owned the shares since=20
1991.=20

In addition, the judge said he is a longtime friendship with John Bryson,=
=20
president and chief executive officer of Edison International, Southern=20
California Edison's parent company.=20

Edison is not a party to the suit filed by Duke Energy, but an Edison lawye=
r=20
was in the courtroom and said the utility was interested in the outcome.=20

The case was transferred to Judge Terry Hatter and the hearing rescheduled=
=20
for Friday afternoon.=20

Duke is challenging Davis' authority to seize long-term energy contracts th=
at=20
were owned by Edison and Pacific Gas & Electric. Davis commandeered the=20
contracts under his emergency authority rather than see them sold by the=20
California Power Exchange to pay debts owed by the utilities for power boug=
ht=20
on the exchange.=20

Duke argues that the governor exceeded his authority because the contracts=
=20
are regulated under federal law.=20

In a related case, a group of energy wholesalers and the power exchange=20
agreed to delay their legal battle while federal regulators consider the=20
underlying issues.=20

The exchange has tried to charge power generators to cover payments owed by=
=20
Edison and PG&E.=20

Enron, Avista and other generators have balked at the so-called ``charge=20
backs.'' The exchange argues it had no choice after the governor commandeer=
ed=20
the utilities' contracts, which had served as collateral for their debts.=
=20

The court hearing was continued to Feb. 20. But both sides may agree to=20
further delays while the Federal Energy Regulatory Commission rules on the=
=20
issue.=20

,2001 Associated Press



Calpine Says California Must Address Debt to Traders=20
Bloomberg News, 2/15/1 17:19 (New York)

(Updates with Mirant comment on generators balking on power sales to=20
California ISO in sixth paragraph.)

New York, Feb. 15 (Bloomberg) -- Calpine Corp. Executive Vice President=20
Thomas Mason said power generators may force California utilities into=20
bankruptcy within a week if concerns about unpaid electricity bills aren't=
=20
addressed by the state legislature.

Calpine, a power-plant owner and developer, won't push Edison International=
=20
and PG&E Corp., owners of California's two biggest utilities, into=20
bankruptcy, Mason said. He declined to say which companies might.

San Jose, California-based generator Calpine has been in talks with the sta=
te=20
and Dynegy Inc., Mirant Corp. and Reliant Energy Inc. on credit and payment=
=20
issues, Mason said.

``The fuse is short,'' Mason said. ``The legislature cannot let the credito=
rs=20
sit out and stew much longer.''

Mason declined to say how much Calpine is owed by the utilities. Calpine=20
recently has sold most of its power to cities in California or to power=20
traders.

Generators are balking at the state's request to continue selling some powe=
r=20
to the California  Independent System Operator, which runs the state power=
=20
grid, Mirant Chief Financial Officer Raymond Hill said in an interview. ``T=
he=20
real issue is whether generators will have to sell to an uncreditworthy=20
buyer,'' he said.

The state had proposed establishing the Department of Water Resources as it=
s=20
buying agent.

On previous sales to the California utilities, ``we are optimistic for an=
=20
outcome that will make us all whole,'' Hill said. ``It pays us to have=20
patience on an eventual political solution to this.''

Mirant, previously called Southern Energy Inc., is based in Atlanta. It's t=
he=20
power-plant development and energy-trading arm of Southern Co., the largest=
=20
U.S. power producer and owner of Atlanta's electric utility.

                                 Dynegy

``I don't believe that (utility) bankruptcy is in the cards still,'' Dynegy=
=20
President Stephen Bergstrom said.
=20
Dynegy, based in Houston, is a U.S. electricity and natural-gas trader.

''My interest isn't in driving anyone to bankruptcy,'' Bergstrom said. ``My=
=20
interest is getting paid, 100 cents on the dollar, what Dynegy is owed, and=
=20
that's really what's driving us.''

Duke Energy Corp., the biggest U.S. utility owner and an energy trading=20
company, has power plants in California. It took a $68 million charge in th=
e=20
fourth quarter to write off bills it might not be able to collect from=20
California utilities.

``So long as we believe that general progress is being made toward a=20
solution, and that we get a chance to shape that solution, then we're willi=
ng=20
to continue to forbear'' on credit, Duke Energy North America Chief Executi=
ve=20
James Donnell said.

                               Legislation

Legislation will be needed to resolve generators' concerns that they won't =
be=20
paid for sales to utilities, Calpine's Mason said.

``I thought back in January surely it would be resolved by February, and no=
w=20
in February, I think, surely it will be resolved by March,'' Enron Corp.=20
Chairman Ken Lay said. Houston-based Enron is the world's biggest energy=20
trader.

The executives spoke in interviews at the UBS Warburg Energy Conference in=
=20
New York.

Shares of Calpine fell $1.01 to $45.99. Rosemead, California-based Edison=
=20
rose 6 cents to $12.31, and San Francisco-based PG&E rose 34 cents to $12.8=
4.=20
Enron fell $2.10 to $77.90, Charlotte-based Duke fell $1 to $40.10, and=20
Dynegy rose 78 cents to $52.01. Mirant fell 5 cents to $25.60.

--Jim Polson in New York, (609) 279-4106 or jpolson@bloomberg.net, and Jim=
=20
Kennett, (713) 335-5595 or jkennett@bloomberg.net, through the Princeton=20
newsroom, (609) 279-4000/pjm




Enron Saga Spills Over Into Cyberspace
Hindustan Times - India, Feb 15, 2001
BY SIDDHARTH ZARABI

THE ENRON imbroglio, after having hogged headlines in the print and=20
television media recently, has now spilled over into cyberspace.=20

A number of US-based non-resident Indian (NRI) academics and professionals=
=20
have come together and formed a group =01* Enron Action =01* that runs a we=
bsite=20
www.altindia.net/enron.=20

The site carries an emotional call =01&for transparency, for accountability=
, for=20
that lost promise called a democracy=018. And as the name suggests, it has=
=20
extensive information on the chronology of events, legal suits filed in the=
=20
past and, most interestingly, a section that suggests =01&a way out=018 fro=
m the=20
current mess that Maharashtra and the central government find themselves in=
.=20
The crux of the NRIs' argument: scrap the project, as according to their=20
estimates, Maharashtra will end up paying a whopping $30 billion (Rs 1,40,0=
00=20
crore) to Dabhol Power Company (DPC).=20

The NRIs say that under international law, the Maharashtra State Electricit=
y=20
Board (MSEB) can bypass its 'insane' obligations to the DPC, only if an=20
Indian court rules that the DPC agreement (the Power Purchase Agreement (PP=
A)=20
and the agreements surrounding it) was in violation of Indian law.=20

=01&Indeed a court case to this effect, filed by Prayas, an NGO, has been=
=20
rejected by the Maharashtra High Court; an appeal against this dismissal=20
(filed by CITU and A. Mehta) is pending before the Supreme Court=018, says =
the=20
group.=20

Explaining the background of the imbroglio, the NRIs' group says that under=
=20
the laws in force when the PPA was signed, the agreement required mandatory=
=20
economic and technical clearance from a statutory body (the Central=20
Electricity Authority =01* CEA) constituted for this very purpose. The grou=
p=20
says that the CEA did issue a technical clearance to the DPC power plant,=
=20
but, explicitly refused to issue the economic clearance. Instead, the=20
regulatory body observed that the economic issues had been looked into by t=
he=20
Ministry of Finance, which found them satisfactory.=20

The website further claims that petitioners in this court case have contend=
ed=20
that the DPC deal never received the mandatory economic CEA clearance. =01&=
A=20
mandatory CEA clearance was the legal safeguard against signing PPAs at=20
exorbitant rates. As this clearance was never received, the petitioners=20
conclude that the Dabhol PPA has no force in law=018. The group believes th=
at=20
this argument is persuasive, and has hoped that the Supreme Court will as=
=20
well. And, the NRIs are putting their money in what they believe is the=20
truth. A week ago they ran an advertisement in an Indian daily on the=20
controversy. Headlined =01&each of you owes Rs 4 lakh to Enron=018, the ins=
ert=20
claims that the Maharashtra government has been unable to pay DPC Rs 1.59=
=20
billion. But, it has entered into a contract which obligates it to pay Rs 4=
=20
trillion over the next 20 years.=20

Predicting a collapse in the states finances, the NRIs believes that=20
Maharashtra will have no money for roads, drinking water projects,=20
irrigation, education or primary healthcare.=20

Juicy tidbits from www.altindia.net/enron:=20

-Enron deal signed without competitive bidding.=20
-Project supplies electricity at twice the cost of MSEB.=20
-World Bank refused to fund the project.=20
-A Cabinet sub-committee recommended cancellation.=20
-Aug 1995: Maharashtra CM says the project would be scrapped.=20
-Nov 3, 1995: Enron CEO met Bal Thackeray. 11 days later, contract=20
reinstated.=20



Williams' EnergyNewsLive.com Features Top Energy Newsmakers=20
=20
2/15/1 FROM PR NEWSWIRE DALLAS  888-776-3971/=20
TO BUSINESS AND ENERGY EDITORS:=20
 =20
Williams' EnergyNewsLive.com Features Top Energy Newsmakers=20
 =20
OPEC President, U.S. Senate Energy Committee Chairman, Industry CEOs Among=
=20
Those Interviewed=20
 =20
HOUSTON, Feb. 15 /PRNewswire/ -- Williams' EnergyNewsLive.com, the world's=
=20
only real-time energy news and information network, this week has featured=
=20
live interviews with newsmakers ranging from the president of OPEC to=20
chairmen=20
of the U.S. Senate Energy Committee, the California Independent System=20
Operator, Williams and Enron during its coverage of events during Cambridge=
=20
Energy Research Associates' CERA Week 2001 conference here.=20

EnergyNewsLive.com's exclusive live, online coverage of CERA Week, an=20
international gathering of energy-industry executives, is scheduled to=20
conclude tomorrow with its 45th live newscast of the week from the conferen=
ce=20
site at the Westin Galleria.=20

EnergyNewsLive.com delivers energy news and information around the clock=20
via the Internet.  The site features a live, broadcast-quality,=20
streaming-video, energy-focused newscast at the top of every hour during th=
e=20
business day.  EnergyNewsLive.com's home studio is located on the energy=20
trading floor at the Williams (NYSE: WMB) Tulsa, Okla., headquarters.=20

Among newsmakers EnergyNewsLive.com has interviewed this week are:=20
 =20
    --  Chakib Khelil, president, OPEC=20
    --  Sen. Frank Murkowski, chairman, U.S. Senate Energy Committee=20
    --  Gerald Doucet, secretary general, World Energy Council=20
    --  James Hoecker, former chairman, Federal Energy Regulatory Commissio=
n=20
    --  Keith Bailey, president and CEO, Williams=20
    --  Daniel Yergin, chairman, Cambridge Energy Research Associates=20
    --  Jeff Skilling, president and CEO, Enron=20
    --  Robert Mosbacher, former U.S. Secretary of Energy=20
    --  Terry Winter, president, California Independent System Operator=20
    --  Mikhail Khodorkovsky, CEO, Yukos Oil Company=20
    --  Tony Knowles, governor, Alaska=20
    --  Steve Malcolm, president -- Energy Services, Williams=20
    --  Alberto Calderon Zuleta, president, ECOPETROL (Columbian Petroleum=
=20
        Company)=20
    --  Steve Letbetter, chairman, president and CEO, Reliant Energy=20
    --  Ria Kemper, secretary general, The Energy Charter Secretariat=20
    --  Jeroen van der Veer, managing director, Royal Dutch Petroleum=20
Company,=20
        and group managing director, Royal Dutch/Shell Group=20
    --  Richard Bilas, commissioner, California Public Utilities Commission=
=20
    --  Joseph Stanislaw president, Cambridge Energy Research Associates=20
    --  David Lemmon, president and CEO, Colonial Pipeline Company.=20
 =20
Many of the EnergyNewsLive.com programs are available for replay in the=20
site's video library.=20

Among those scheduled to appear on EnergyNewsLive.com newscasts on Friday,=
=20
Feb. 16, are Leonard Hymen, Salomon Smith Barney; Kevin Best, Real Energy=
=20
Inc.; John Egan, director of strategic and marketing issues, E Source and=
=20
Financial Times Energy; Kevin Cooney, vice president -- research, Financial=
=20
Times Energy; and Steven Taub, associate director, Cambridge Energy Researc=
h=20
Associates.=20

The CERA Week coverage coincides with EnergyNewsLive.com's opening of a=20
Houston news bureau and studio.  In addition to the new Houston operation,=
=20
EnergyNewsLive.com operates bureaus in Washington and New York City.=20

EnergyNewsLive.com has a registered user base of more than 9,000,=20
comprised primarily of energy executives, legislators, regulators and=20
institutional energy consumers.  The service is free.=20

Besides live video newscasts, EnergyNewsLive.com also features=20
sophisticated, proprietary models that present weather -- which influences =
an=20
estimated 80 percent of energy market fluctuations -- in the context of=20
energy=20
markets; commodity market analysis and commentary; links to energy-commodit=
y=20
trading exchanges; and a new, real-time, cross-commodity spot and future=20
pricing index called the Williams uE, or universal energy unit.=20

The site is designed to operate optimally at Internet connection speeds=20
that are common in corporate networks or high-speed home connections.=20

EnergyNewsLive.com is powered and distributed by Williams end-to-end.=20
Through its Vyvx Broadband Media offering, Williams Communications (NYSE:=
=20
WCG)=20
provides transmission and distribution services.=20
 =20
/CONTACT:  Kerry Malone of Williams, 918-573-2110,=20
orkerry.malone@williams.com;=20
or Lisa DeMatteo of Mercury Group, 703-299-9470, orlisa-dematteo@mail.am.co=
m,=20
for Williams/=20



Electric Deregulation Trial Run Begins
By DAVID KOENIG
AP Business Writer

02/15/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

With cost savings - and maybe a bit of revenge - on their minds, Texas=20
businesses and consumers began signing up Thursday for the right to shop=20
around for their electric-power company.=20

Deregulation is expected to attract close to 20 power companies - including=
=20
newcomers from outside Texas - who will compete for a slice of the=20
residential, commercial and industrial market.

Customers can sign up for the trial program by contacting one of the=20
companies and requesting service. Service will begin June 1 and serve as a=
=20
test for the broader electricity deregulation that begins next year.=20
Supporters say deregulation say it will provide more competition and lower=
=20
prices for consumers. Utilities are already jostling for position and=20
consumers' attention.=20

An official with New Power Co. - a joint venture of Enron, IBM and America=
=20
Online - said the company might offer one or two months free to some=20
residential customers.=20

Houston-based Shell Energy, a unit of Royal Dutch/Shell Group, said it woul=
d=20
give a year's worth of electricity free to Don Gallagher of Houston, the=20
first residential customer to sign up for its service.=20
"I've only won piddling things - I had a close miss on the Texas Lottery=20
once. This is pretty neat," said Gallagher, a self-employed contractor who=
=20
spent $3,337 on electricity for his 2,900-square-foot house last year.=20

Gallagher said the money he'll save might go for a car for one of his=20
teen-age daughters or for new carpeting. "It'll get spent."=20

Most analysts expect the utilities will be most aggressive in courting larg=
e=20
business customers.=20

"Because a commercial customer is higher volume, there's more potential=20
revenue than going after a lot of residential customers," said Terry Hadley=
,=20
a spokesman for the Public Utility Commission. "And if you're a business,=
=20
paying a lot more than a residential customer for power, you're going to be=
=20
more active" in shopping around.=20

The state deregulation law will allow big investor-owned utilities such as=
=20
TXU Corp. the ability to compete for customers beyond their traditional hom=
e=20
territories - but they also must cut their home-turf rates by 6 percent.=20

State officials expect Dallas-based TXU Electric to eventually lose 40=20
percent of its North Texas customer base. Spokesman Chris Schein said the=
=20
company expects to more than offset its losses by adding customers in Houst=
on=20
- home of rival Reliant Energy - and other Texas cities.=20

The pilot program will be open to 5 percent of the state's electricity user=
s.=20
Residential customers can sign up on a first-come, first-served basis. If=
=20
demand among business users exceeds 5 percent, as is expected, participatio=
n=20
will be determined by a lottery.=20
The trial run is designed to test the electric grid and computer systems th=
at=20
will be used to link power producers and customers who have never before be=
en=20
connected.=20

To help confused customers sort through the implications of deregulation,=
=20
which was approved by the Legislature in 1999, the PUC hired the=20
Burson-Marsteller public relations firm to explain the arcana of deregulati=
on=20
on a special Web site called Texas Electric Choice.=20
---=20
On the Net:=20
Texas Electric Choice site: www.powertochoose.org
mark.palmer@enron.com, meredith.philipp@enron.com, steven.kean@enron.com, 