Power Trader Tied to Bush Finds Washington All Ears
The New York Times, 05/25/01

Enron Unit's Cline on Dispute With Indian Province: Comment
Bloomberg, 05/25/01

U.S. Energy Regulator May Be Replaced, New York Times Reports
Bloomberg, 05/25/01

Energy Antics: Oh, Behave!
Los Angeles Times, 05/25/01

Lockyer comes out swinging at oilman / Davis has plenty of company in depths
of poll
The San Francisco Chronicle, 05/25/01

Latest move in dispute threatens Enron project
Houston Chronicle, 05/25/01

Indian State Moves To End Power Pact With Enron's Dabhol
The Wall Street Journal, 05/25/01

Markets / Your Money Dow, Nasdaq Make Modest Gains Wall St.: Politics and
economic concerns weigh down some stocks prior to slated talk by Fed Chairman
Alan Greenspan.
Los Angeles Times, 05/25/01

Dot-coms may be down and out, but the internet is still transforming
corporations
The Globe and Mail, 05/25/01

India Enron Panel Lacks Authority to Solve Dispute, Expert Says
Bloomberg, 05/25/01

India's Negotiator Gokak on Dispute With Enron Unit: Comment
Bloomberg, 05/25/01

India Govt: State Bd To Likely Pay Dabhol Apr Elec Bill
Dow Jones Energy Service, 05/25/01

PGE sees gains despite power costs
Associated Press Newswires, 05/25/01

India: Pachauri rejects Godbole's remarks
Business Line (The Hindu), 05/25/01

India: India, Australia sign pact on energy, mining
Business Line (The Hindu), 05/25/01

India: MSEB slaps notice on DPC
Business Line (The Hindu), 05/25/01

AUSTRALIAN FIRMS EYE INDIAN POWER AND MINING SECTOR
Asia Pulse, 05/25/01

Bechtels out if dues not paid by May 31
The Economic Times, 05/25/01

Govt in a fix over asking NTPC to take over Dabhol
Business Standard, 05/25/01

MSEB rescinds Dabhol PPA
Business Standard, 05/25/01

USA: Business school grads rediscover energy business.
Reuters English News Service, 05/24/01

State utility cancels agreement Enron power purchase pact
Associated Press Newswires, 05/24/01

El Paso's Chairman to Testify in Gas-Price Hearing (Update1)
Bloomberg, 05/24/01

National Desk; Section A
Power Trader Tied to Bush Finds Washington All Ears
By LOWELL BERGMAN and JEFF GERTH

05/25/2001
The New York Times
Page 1, Column 1
c. 2001 New York Times Company

Curtis Hebert Jr., Washington's top electricity regulator, said he had barely
settled into his new job this year when he had an unsettling telephone
conversation with Kenneth L. Lay, the head of the nation's largest
electricity trader, the Enron Corporation.
Mr. Hebert, chairman of the Federal Energy Regulatory Commission, said that
Mr. Lay, a close friend of President Bush's, offered him a deal: If he
changed his views on electricity deregulation, Enron would continue to
support him in his new job.
Mr. Hebert (pronounced A-bear) recalled that Mr. Lay prodded him to back a
national push for retail competition in the energy business and a faster pace
in opening up access to the electricity transmission grid to companies like
Enron.
Mr. Hebert said he refused the offer. ''I was offended,'' he recalled, though
he said he knew of Mr. Lay's influence in Washington and thought the refusal
could put his job in jeopardy.
Asked about the conversation, Mr. Lay praised Mr. Hebert, but recalled it
differently. ''I remember him requesting'' Enron's support at the White
House, he said of Mr. Hebert. Mr. Lay said he had ''very possibly'' discussed
issues relating to the commission's authority over access to the grid.
As to Mr. Hebert's job, Mr. Lay said he told the chairman that ''the final
decision on this was going to be the president's, certainly not ours.''
Though the accounts of the discussion differ, that it took place at all
illustrates Enron's considerable influence in Washington, especially at the
commission, the agency authorized to ensure fair prices in the nation's
wholesale electricity and natural gas markets, Enron's main business.
Mr. Lay has been one of Mr. Bush's largest campaign contributors, and no
other energy company gave more money to Republican causes last year than
Enron.
And it appears that Mr. Hebert may soon be replaced as the commission's
chairman, according to Vice President Dick Cheney, the Bush administration's
point man on energy policy.
Mr. Lay has weighed in on candidates for other commission posts, supplying
President Bush's chief personnel adviser with a list of preferred candidates.
One Florida utility regulator who hoped for but did not receive an
appointment as a commissioner said he had been ''interviewed'' by Mr. Lay.
Mr. Lay also had access to the team writing the White House's energy report,
which embraces several initiatives and issues dear to Enron.
The report's recommendations include finding ways to give the federal
government more power over electricity transmission networks, a longtime goal
of the company that was spelled out in a memorandum Mr. Lay discussed during
a 30-minute meeting earlier this spring with Mr. Cheney.
Mr. Cheney's report includes much of what Mr. Lay advocated during their
meeting, documents show. Both men deny discussing commission personnel issues
during their talk. But Mr. Lay had an unusual opportunity to make his case
about candidates in writing and in person to Mr. Bush's personnel adviser,
Clay Johnson. And when Mr. Bush picked nominees to fill two vacant Republican
slots on the five-member commission, they both had the backing of Enron, as
well as other companies.
Mr. Lay is not shy about voicing his opinion or flexing his political muscle.
He has transformed the Houston-based Enron from a sleepy natural-gas company
into a $100 billion energy giant with global reach, trading electricity in
all corners of the world and owning a multibillion-dollar power project in
India. He has also led the push to deregulate the nation's electricity
markets.
Senior Bush administration officials said they welcomed Mr. Lay's input but
did not always embrace it: President Bush backed away from curbing
carbon-dioxide emissions, an effort supported by Enron, which had looked to
trade emission rights as part of its energy business.
''We'll make decisions based on what we think makes sound public policy,''
Mr. Cheney said in an interview, not what ''Enron thinks.''
The Bush-Lay bond traces back to Mr. Bush's father and involves a personal
and philosophical affinity. Moreover, Enron and its executives gave $2.4
million to federal candidates in the last election, more than any other
energy company. While some of that went to Democrats, 72 percent went to
Republicans, according to an analysis of election records by the Center for
Responsive Politics, a nonprofit group.
''He's for a lot of things we're for,'' said Mr. Johnson.
But when it came to deciding on nominees for the commission, Mr. Johnson said
that Mr. Lay's views were not that crucial. The two most important advisers,
he said, were Andrew Lundquist, the director of Mr. Cheney's energy task
force, and Pat Wood 3rd, the head of the Texas public utility commission.
As governor, Mr. Bush named Mr. Wood to the utility commission. This year,
when the White House filled the two Republican slots on the federal agency,
Mr. Wood was the first choice, Mr. Johnson said.
Consumer advocates and business executives praise Mr. Wood. But Mr. Lay also
had a role in promoting him. Shortly after Mr. Bush was elected governor in
1994, Mr. Lay sent him a letter endorsing Mr. Wood as the ''best qualified''
person for the Texas commission.
In all, there are five seats on the commission, two held by Republicans, two
by Democrats and one held by a chairman who serves at the pleasure of the
president. Mr. Hebert, who became a commissioner in 1997, was named chairman
by Mr. Bush in January.
The Federal Energy Regulatory Commission's mandate to ensure fair prices in
wholesale electricity and natural gas markets makes it crucial to sellers
like Enron as well as consumers.
The movement toward deregulation sometimes leaves the commission caught in a
tug of war: power marketers like Enron are trying to break into markets and
grids controlled by old-line utilities, which operate under state regulation.
The commission's chairman has considerable latitude in setting its agenda.
As part of its oversight of the wholesale electricity markets, the commission
ordered several companies to refund what it considered excessively high
prices this year in California. One lesser offender named in the commission's
public filings -- $3.2 million, of a total of $125 million -- was an Enron
subsidiary in Oregon.
Enron owns few generating assets, but buys and sells electricity in the
market. Many of those transactions resemble the complicated risk-shifting
techniques used by Wall Street for financial instruments.
Mr. Hebert, after he became chairman, initiated an examination into the
effects those techniques have on the electricity markets. ''One of our
problems is that we do not have the expertise to truly unravel the complex
arbitrage activities of a company like Enron,'' he said, adding, ''we're
trying to do it now, and we may have some results soon.''
William L. Massey, one of the agency's two Democratic commissioners, said he
supported the inquiry but had not been aware of it -- an indication of the
chairman's ability to set the commission's agenda.
Finally, the commission is trying to speed the pace of electricity
deregulation by opening up the nation's transmission grid, much of which is
owned by privately owned utilities that enjoy retail monopolies. Some Enron
officials say the commission has been moving too slowly to open the grid.
They attribute some of the problem to utilities. But they also fault Mr.
Hebert.
''Hebert still has undeserved confidence in some of the vertically integrated
companies coming to the table and dealing openly'' with transmission access
issues, said Richard S. Shapiro, an Enron senior vice president.
The utilities, however, maintain that they provide cheap and reliable service
for their customers. Washington lobbyists for one Southern utility said that
Enron was really interested in focusing on the utility's big-business
clients, which under state regulation pay higher rates than residential
customers.
Since 1996, about half the states have moved to open their retail markets to
competition, and the commission has begun to make it easier for outsiders to
use the nation's transmission grid. But the promise of cheaper rates has been
largely unfulfilled. So the push for more deregulation, in which Enron has
been a leader, has slowed, especially when California's flawed program led to
skyrocketing rates and chaotic markets.
Mr. Hebert is a free-market conservative who favors deregulation but also
recognizes the importance of state's rights. A former Mississippi regulator,
he is a protege of Trent Lott, the Senate Republican leader from Mississippi.
Mr. Hebert said Mr. Lott was instrumental in his nomination to the commission
in 1997 by President Clinton.
President Bush elevated Mr. Hebert to chairman on Inauguration Day, a move
Mr. Lay said he told the White House he supported.
Mr. Johnson, the White House personnel chief, said that Mr. Lott and Mr.
Hebert had both been told that Mr. Hebert could remain chairman at least
until the administration's nominees -- Mr. Wood and Nora Brownell, a
Pennsylvania utility regulator -- are confirmed by the full Senate. The
Senate energy committee voted earlier this week to approve the two nominees,
after a hearing last week indicated strong support.
It is widely expected that President Bush will name Mr. Wood to replace Mr.
Hebert as chairman after the Senate acts.
In an interview for a forthcoming episode of ''Frontline,'' the PBS series,
Mr. Cheney suggested as much. ''Pat Wood's got to be the new chairman of the
F.E.R.C., and he'll have to address'' various problems in the electricity
markets, he said.
Mr. Hebert said that no one had told him he was being replaced. If someone
else is named chairman, Mr. Hebert can remain a commissioner until the end of
his term, which expires in 2004.
It was a few weeks after President Bush made him chairman that Mr. Hebert
said he spoke by telephone with Mr. Lay.
Mr. Lay told him that ''he and Enron would like to support me as chairman,
but we would have to agree on principles'' involving the commission's role in
expanding electricity competition, Mr. Hebert said of the conversation.
A senior commission official who was in Mr. Hebert's office during the
conversation said Mr. Hebert rebuffed Mr. Lay's offer of a quid pro quo. The
official said that he heard Mr. Hebert's side of the conversation and then,
after the call ended, learned the rest from him.
Mr. Hebert said that he, too, backed competition but did not think the
commission had the legal authority to tell states what to do in this area.
Concerning the issue of opening transmission access through the creation of
regional networks, Mr. Hebert supports a voluntary process while Enron seeks
a faster and more compulsory system.
Mr. Lay said that while he might have discussed issues relating to the
commission's authority concerning access to the grid, ''there was never any
intent'' to link that or any other issue to Mr. Hebert's job status.
The commission is a quasijudicial agency, so decision-makers like Mr. Hebert
must avoid private discussions about specific matters pending before the
commission. Mr. Hebert and Mr. Lay both said that line was not crossed, but
Mr. Hebert said he had never had such a blunt talk with an energy-industry
executive.
Mr. Lay added that his few recent conversations with Mr. Hebert were nothing
special. ''We had a lot of access during the Clinton administration,'' he
said.
And he said that while making political contributions ''probably helps'' to
gain access to an official, he made them ''because I'm supporting candidates
I strongly believe in.''
Last June, Enron executives were asked to make voluntary donations to the
company's political action committee. The solicitation letter noted that the
company faced a range of governmental issues, including electricity
deregulation.
This year, some people who sought but did not get nominations to the
commission said that Mr. Lay and Enron had had a role in the process.
One was Joe Garcia, a former Florida utilities regulator and prominent
Cuban-American activist. He said he had been ''interviewed'' by a few Enron
officials, including Mr. Lay, who he said had not been as ''forceful or
insistent'' as the other Enron officials.
But in their conversation, Mr. Garcia said, Mr. Lay made clear that he would
be visiting the White House, adding that ''everyone knew of his relationship
and his importance.''
Mr. Johnson, the White House personnel chief, could not cite another company
besides Enron that sent him a list of preferred candidates for the
commission, but he remembered hearing the views of Tom Kuhn, who heads the
utility industry trade group, the Edison Electric Institute. Mr. Kuhn was a
classmate of Mr. Johnson and Mr. Bush at Yale.
As for his conversation with Mr. Garcia, Mr. Lay said he was comfortable with
his candidacy but ''I'm not sure what I told him about my friends at the
White House.''
This article is part of a joint reporting project with the PBS series
''Frontline,'' which will broadcast a documentary about California's energy
crisis on June 5.

Photos: Kenneth L. Lay, left, chairman of the country's largest energy
trader, and Curtis Hebert Jr., chairman of the Federal Energy Regulatory
Commission, differ in their accounts of a conversation about energy
deregulation. (Photographs courtesy WGBH/''Frontline'')(pg. A18)

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

Enron Unit's Cline on Dispute With Indian Province: Comment
2001-05-25 03:53 (New York)

     New Delhi, May 25 (Bloomberg) -- Wade Cline, managing
director of Enron Corp.'s Dabhol Power Co., on the dispute with
the western Indian province of Maharashtra over dues. He was
speaking to reporters in New Delhi after meeting A.K. Basu,
secretary to the ministry of power.

     ``We won't renegotiate on the basis of the Godbole committee
report. We are going back to Maharashtra tomorrow to work on the
problem.''

     Dabhol Power said yesterday the Maharashtra State Electricity
Board, its sole customer, served notice that it's canceling their
seven-year-old power purchase contract.
     The notice came six days after Dabhol gave the board a
``preliminary termination notice'' because of an unresolved six-
month dispute over bills owed by the board.
     Madhav Godbole, also the Indian government's chief negotiator
in the current dispute, headed a committee set up by the
Maharashtra provincial government to suggest ways to lower the
cost of power supplied by Dabhol.

U.S. Energy Regulator May Be Replaced, New York Times Reports
2001-05-25 06:04 (New York)

     Washington, May 25 (Bloomberg) -- Enron Corp. gave more money
to Republican causes last year than any other energy company and
the head of the Federal Energy Regulatory Commission, whose
policies the company object to, may soon be replaced, the New York
Times reported.
     Enron Chairman Kenneth Lay objected to Curtis Hebert Jr's
views on electricity deregulation, telling him he would continue
to support the regulator if he changed perspective, the Times
reported. Hebert may soon be ousted, the Times reported Vice
President Dick Cheney as saying.
     Lay drew up a shortlist of candidates he would like to see
named as Hebert's replacement, the Times said. One Florida utility
regulator who hoped to win the job was interviewed by Lay, it
added.
     ``We'll make decisions based on what we think makes sound
public policy,'' Cheney told the Times. The decision won't be
based on what ``Enron thinks.''

California; Editorial Writers Desk
Energy Antics: Oh, Behave!

05/25/2001
Los Angeles Times
Home Edition
B-14
Copyright 2001 / The Times Mirror Company

Admit it: The only comic relief in this energy crisis has been watching our
leaders go at suppliers and each other like pro wrestlers or Jerry Springer
guests.
In his State of the State address last January, Gov. Gray Davis accused the
big private electric power generators of legalized highway robbery and
threatened to seize their plants if necessary. Then he really got angry,
calling them "the biggest snakes in the world." This past week, Atty. Gen.
Bill Lockyer boosted the rhetoric a notch by declaring he would like to
personally escort the chairman of Enron Corp. "to an 8-by-10 cell that he
could share with a tattooed dude who says, 'Hi, my name is Spike, honey."'
Meanwhile, President Bush and Vice President Dick Cheney have blamed
California for causing its own problems with a "harebrained" deregulation
scheme and mocked the state's power purchases and conservation programs. It's
been fun. Now it's time for our leaders to act like adults.
Davis and Bush always will have their political differences, but the
economies of both the state and the nation are endangered by California's
energy situation. These leaders need to work together as cooperatively as
possible, starting next week when Bush makes his first visit to California as
president.
Davis wrote Bush Wednesday offering to meet with him during his California
visit. Bush spokesman Ari Fleischer said the president looks forward to
discussing energy and other issues. Good start. Let's hope the conversation
is civil and that the civility spreads.
No matter how much California has been abused by the power companies, and it
absolutely has, the state still needs them to help solve the crisis caused by
shortages of electric power generation this year and next. Usually, the
biggest targets of official and public wrath are the investor-owned utilities
such as Southern California Edison and Pacific Gas & Electric Co. But not
this time because, in the view of the state, the utilities have been bled dry
by the power generators' stratospheric prices. The state had to take over the
purchase of power when the generators refused to extend any more credit to
Edison and PG&E. Legal recourse should be pursued, but the threatening
rhetoric needs to subside.
State lawmakers are right to be upset with the White House for refusing to
use its authority to set reasonable temporary wholesale price controls. And
Davis is justifiably upset with Bush and with Cheney, who said the only
solution was to build more power plants--ignoring the fact that the state is
building 10 plants now, with five more on the way, and that the only way to
control wholesale power rates is for Washington to cap them.
If the state hadn't bought the power, the generators would have let the
lights go out. Davis needs to deliver that message, quietly and persuasively,
while Bush is in California. And Bush needs to listen respectfully, like an
adult.

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

NEWS
MATIER & ROSS
Lockyer comes out swinging at oilman / Davis has plenty of company in depths
of poll
Phillip Matier, Andrew Ross

05/25/2001
The San Francisco Chronicle
FINAL
A.21
(Copyright 2001)

The reaction from Gov. Gray Davis' camp to yesterday's poll showing him in
the dumper was quick and blunt.
"Tell me something I don't already know," adviser Paul Maslin said after
being hit with the news that the latest Field Poll showed Davis' job rating
down 18 points since January.
"None of this is news to us," Maslin said.
Heck, these days even nuclear power is more popular than Davis.
But to Maslin, who has been watching his client's popularity drop with every
rolling blackout, the question isn't how Davis is doing today. It's how he
looks in a year and a half when he faces re- election that counts.
And on that score, Davis & Co. seem to be oddly relieved at all the bad poll
numbers that have come out this week.
Because while their guy is definitely in trouble, everyone else is even
deeper in trouble -- especially George W. Bush.
The only announced Republicans running for governor -- Secretary of State
Bill Jones and businessman William Simon Jr. -- aren't even the first picks
of GOP voters.
That honor goes to outgoing Los Angeles Mayor Richard Riordan -- who actually
does very well when matched up against Davis. In fact, if he ran, the polls
show it would be a dead heat.
At this point, however, the only person who seems to think the 72- year-old
Riordan is going to run is his good San Francisco buddy and adviser Clint
Reilly, who has been spending a lot of time in Los Angeles of late.
As for a challenge to Davis from within Democratic ranks?
Well, the most frequently mentioned possibles -- Attorney General Bill
Lockyer and Treasurer Phil Angelides -- both trail Davis in job performance
ratings.
There was one interesting twist that wasn't in the Field Poll.
From what we hear, an energy company recently did a survey of its own that
included a matchup between Davis and Sen. Dianne Feinstein, of all people.
The result: DiFi cleans Gray's clock.
RAIDER REVENGE: The Oakland Raiders may be eating more than crow after losing
their big lawsuit against the National Football League.
They may also have to eat upwards of $10 million in lawyers fees - - and not
just for their own lawyers.
It turns out that under NFL rules, they may also get socked with the bills
for hundreds of hours of depositions, expert witnesses and the NFL's team of
eight to 10 lawyers who charged an average of $350 to $400 an hour.
Not to mention all those weeks the legal team was holed up at Los Angeles'
tony Omni Hotel on Bunker Hill fighting the Raiders' claim to the Los Angeles
market.
And just to add further insult, Commissioner Paul Tagliabue says league
owners haven't ruled out fining and suspending Raiders' boss Al Davis for
bringing his lawsuit against the NFL in the first place.
The Raiders are still considering whether to appeal this week's jury verdict
-- a roll of the dice that would further drive up the legal tab if the team
comes up craps.
As for the odds that Tagliabue might give Davis a pass on paying the league's
trial costs?
"Not a prayer," says one lawyer on the case.
On the other hand, Big Al could always sue them back.
FUNNY NUMBERS: The question of whether there are 3,600 "unaccounted for"
votes from November's election isn't the only funny thing going on down at
the San Francisco Department of Elections.
There's the department's spend-happy ways as well.
"Unbelievable," was how Budget Analyst Harvey Rose summed up the department's
recent request: $1.4 million so it can move from its digs in the basement of
City Hall to a $678,000-a-year office space on Market Street.
All in the name of "efficiency," of course.
THE WILD ZONE: The World Wildlife Fund held its first-ever West Coast
fund-raiser last weekend at the new Presidio park.
The $1,000-a-head fund-raiser, which featured the band B-52's, drew upwards
of 1,200 partygoers to a pair of lavishly decorated hangars -- and included
honorary chairwoman Lauren Hutton, comic Drew Carey and a bevy of local and
New York socialites.
Presiding over it all was World Wildlife Fund chairman Bill Reilly, who also
happens to be a member of the Presidio Trust board that oversees the park.
We're happy to report that unlike University High's Decorator Showcase --
which has its own board connections and is getting free rent at the Presidio
-- the World Wildlife Fund ponied up $10,600 in rent.
Not a bad investment, considering that the party brought in close to
$700,000, according to event organizers.
QUOTE OF THE WEEK: State Attorney General Bill Lockyer has never been known
as a loose cannon, so when he told the Wall Street Journal this week that he
would love to personally escort Enron Corp. Chairman Kenneth Lay into "an
8-by-10 cell that he could share with a tattooed dude who says, 'Hi, my name
is Spike, honey,' " more than a few eyes popped wide.
So what's up?
"I want these generators in Texas and elsewhere to know that we are coming
after them," Lockyer tells us. "And we're not talking about a 10-year fight
to get our money back -- if we have the facts right, we're going to put them
in prison."
Besides, Lockyer says, his "missile" wasn't really meant for "home
consumption" -- rather, it was aimed at the Big Money crowd back East.

PHOTO (2); Caption: (1) Al Davis, (2) Gray Davis

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

May 25, 2001
Houston Chronicle
Latest move in dispute threatens Enron project
By MICHAEL DAVIS
Copyright 2001 Houston Chronicle
Indian officials have upped the ante in the standoff with Enron Corp. over
unpaid power bills at the Houston company's Dabhol Power project. The latest
wrinkle in the longstanding dispute raises questions about the future of the
beleaguered $3 billion project.
Enron received notice Thursday from its sole customer, the Maharashtra State
Electricity Board, that it was canceling a 7-year-old power purchase
agreement.
The board has refused to pay for power from the plant, saying the bills
should be lower because Enron is not living up to its contract. Indian
officials say Enron is not supplying power at full capacity within three
hours of being restarted after a shutdown, as required by the deal.
Enron responded with a statement describing the move as a "deliberate attempt
to further delay the resolution of difficult issues" confronting the board.
Termination of the project at this late stage could trigger an estimated $2
billion in future obligations by India's state and federal governments.
This latest round in the battle capped off a week of turmoil between the
Houston company and Indian political officials over the project.
Last weekend, Enron started proceedings to end the contract by serving the
board a "preliminary termination notice" because of large unpaid power bills.
Enron is owed about $64 million for power sold in December and January.
Then Wednesday, a negotiator trying to resolve the payment dispute between
the company and the electricity board resigned and then retracted his
resignation the same day.
The standoff between Enron and the electricity board and Indian politicians
is expected to continue into next week, when formal negotiations are
scheduled to begin.
Enron is maintaining that the board does not have the right to cancel the
agreement on the grounds it has stated.
There has been speculation that Enron is looking to sell its 65 percent share
of the project, and this latest round of fighting has revived that talk. The
company has answered such questions in the past by saying it is committed to
the project.
"Even if this is resolved, Enron still wants to free itself altogether from
this investment," said Carol Coale, energy analyst with Prudential Securities
in Houston. "What investors are afraid of is a write-off. Enron has $850
million in equity in the project; the rest is debt."
Currently, the first phase of the project is running at about 37 percent
capacity and providing Enron with a 5 percent return on its investment, Coale
said. That ranks it among the company's poorest-performing investments.
Finding a buyer that would pay fair value for the plant with all of its
political baggage could be difficult. Potential buyers are believed to be
Reliance, one of India's largest industrial concerns, or China Light & Power.
India's federal and state governments have guaranteed the payment for power
from the plant as well as loans for the project, the largest single foreign
investment in India.
An Enron spokesman in India described the board's latest move as a "long
shot."
"We have said for some time that there was going to be a lot of noise
associated with this and legal maneuvering," Enron spokesman John Ambler
said. "The odds of this being successful are very small."
Enron is committed to working out a resolution to the dispute, Ambler said,
and is helping to find credit-worthy electric customers that might be able to
step in and buy power that the state of Maharashtra does not need.
Enron has faced ongoing problems in India, almost from the time of its
initial investment in the project in the early 1990s.
In 1995 the state government, then headed by the Hindu ultranationalist party
Shiv Sena, scrapped the project, saying the price of its power was too high.
The project was idled in the midst of the construction of the first phase,
costing Enron an estimated $100,000 a day while work was halted. The project
was eventually restarted after voters chose another slate of politicians in
the region.
The project's first phase of 740 megawatts is on line. The second phase of
1,444 megawatts is scheduled to go into operation later this year, but Ambler
would not confirm when it will actually start operating, if at all.

International
Indian State Moves To End Power Pact With Enron's Dabhol

05/25/2001
The Wall Street Journal
A12
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI -- The sole customer of Enron Corp.'s troubled power project in
India said it is rescinding its contract to buy electricity from the company,
escalating the bitter fight between the two sides over unpaid bills.
The project, Dabhol Power Corp., said it received a letter from the
Maharashtra State Electricity Board announcing the move. But Dabhol said in a
statement that the board "does not have the right to rescind the
[power-purchase agreement] as attempted in their letter." The chairman of the
state electricity board wasn't available to comment.
The $3 billion Dabhol project, India's largest foreign investment, is under
attack by critics who say its rates are too high. Dabhol disputes that claim.
The electricity board's action puts Dabhol in the position of defending a
contract that it, too, has recently indicated a willingness to abandon. About
a week ago, Dabhol gave notice it was formally initiating a procedure to
cancel the contract in six months if the dispute isn't resolved. Dabhol says
it is owed $48 million in unpaid bills by the electricity board. The
electricity board, in turn, claims the bills are offset by millions of
dollars in fines that Dabhol owes due to service lapses.
Dabhol holds guarantees from India's central government to cover bill
defaults, and the government has said it wants to help find a resolution to
the standoff. A meeting with government officials is set for Tuesday, and
Dabhol has said it is interested in hearing about prospects for selling power
to other customers.

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

Business; Financial Desk
Markets / Your Money Dow, Nasdaq Make Modest Gains Wall St.: Politics and
economic concerns weigh down some stocks prior to slated talk by Fed Chairman
Alan Greenspan.
From Associated Press

05/25/2001
Los Angeles Times
Home Edition
C-4
Copyright 2001 / The Times Mirror Company

Stocks ended an uneven session with moderate gains Thursday as investors
vacillated between optimism and fear about the economy. The market also was
trying to determine the effect of the change in leadership in the Senate.
The Dow Jones industrial average closed up 16.91 points, or 0.2%, at
11,122.42 after falling 60 points earlier in the session.
Wall Street's broader indicators followed the Dow's path, advancing late in
the session. The Nasdaq composite index rose 38.54 points, or 1.7%, to
2,282.02, while the Standard & Poor's 500 index moved up 4.12 points, or
0.3%, to 1,293.17.
Thursday's trading was choppy from the start when Vermont Sen. James M.
Jeffords announced, as expected, that he is leaving the Republican Party to
become an independent, ending GOP control of the Senate.
"Everyone is sort of going through their own analysis of what effect the
change in the legislature is going to have for various sectors in the
market," said Charles White, portfolio manager for Avatar Associates.
But analysts said the market's fluctuation mostly came amid unease over the
health of the economy. Investors were trading cautiously ahead of a speech
Federal Reserve Chairman Alan Greenspan was scheduled to deliver Thursday
night before the Economic Club of New York.
"The next quarter or two are going to be weak," White said. "We already know
that. What we want to hear from the Fed chairman tonight is that the fourth
quarter is going to bring recovery. "The reason we have been rallying
[recently] is on the hopes and dreams of the fourth quarter."
Adding to investors' nervousness about the economy were weak housing and
employment news. The Commerce Department reported that new-home sales posted
their largest decline in four years in April as rising layoffs made Americans
feel less secure about making big-ticket purchases.
And the Labor Department said new claims for state unemployment insurance
rose more sharply last week than analysts expected.
It was more difficult to gauge precisely how Jeffords' move was affecting
Wall Street, where some profit taking had been expected following the
market's big run-up since early last month. Stocks have advanced primarily
because of the five interest rate cuts by the Fed this year.
The Dow has jumped 1,732.94 points, an 18.5% increase, from its March low of
9,389.48. Nasdaq has gained 643.22, or 39%, from its April 4 low of 1,638.80.
The market can't be expected to sustain such upward momentum as long as
investors have reason to worry about the economy, said Alan Ackerman,
executive vice president of Fahnestock & Co.
"The averages moved too far too fast without any real strong earnings
development," Ackerman said. "The market has overreacted to the cumulative
Fed rate cuts."
The economy and politics aside, stocks still managed to post widespread
gains. Microsoft rose $2.02 to $71.72, and General Motors advanced $1.41 to
$56.59. Home Depot moved up 83 cents to $53.45, and Intel rose 41 cents to
$29.21.
However, analysts said politics pulled down pharmaceutical and energy shares,
sectors that typically benefit from a Republican Congress. Merck dropped
$1.50 to $72.50 and Enron fell $1.19 to $54.16.
The slowing economy hurt makers of semiconductor equipment, which reported
late Tuesday that customer orders for April dropped 41% from March. Triquint
Semiconductor plunged $4.22 to $20.59.
Advancing issues traded about evenly with decliners on the New York Stock
Exchange, where consolidated volume was slightly below Wednesday's trading
pace.
*
Market Roundup, C6, C7

GRAPHIC-CHART: Daily Diary: Thursday, May 24, 2001;

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

Report on Business Magazine
DIGITAL ECONOMY
Dot-coms may be down and out, but the internet is still transforming
corporations
DON TAPSCOTT

05/25/2001
The Globe and Mail
Metro
27
"All material Copyright (c) Bell Globemedia Publishing Inc. and its
licensors. All rights reserved."

The pendulum of irrational exuberance of 18 to 36 months ago is swinging back
to irrational orthodoxy. Typical is Harvard competitiveness guru Michael
Porter's article in the March issue of Harvard Business Review, "Strategy and
the Internet," in which he joins the chorus exhorting business leaders to
"return to fundamentals" and abandon misguided thoughts of new business
models or e-business strategies.
Porter's line of reasoning is this: The internet arrived. Many companies
attempted to build businesses based on the net. They were called dot-coms.
Most crashed and burned. Therefore, building a company based on the net is
foolhardy.
Porter asserts that "the experiences companies have had with the internet
thus far must be largely discounted and that many of the lessons learned must
be forgotten." Success in today's economy "does not require a radically new
approach." Companies should stick to their time-tested processes, using the
net as a "complement to traditional ways of competing."
Porter divides the world into two camps: the dot-com zealots and the
traditionalists like him. The former raved about web site stickiness and
first-mover advantage, while the latter support concepts such as value
creation, differentiation and profitability. And we can all see who won.
Framed this way, much of Porter's reasoning seems rock solid. After all, who
can defend the dot-com recklessness of 1999 and early 2000? Our grandchildren
will marvel at the era of insta-billionaires and IPO frenzy. But even after a
3,000-point Nasdaq plunge, must we inescapably conclude, as Porter argues,
that the internet is more or less inconsequential?
The answer is, no. Porter's analysis falls short for two key reasons. First,
he grossly underestimates what the internet is and where it is headed.
Second, he doesn't understand its impact on the nature of the firm.
On the first point, Porter maintains the net is just "the latest stage in the
ongoing evolution of information technology." Porter makes the all-too-common
mistake in assuming that today's internet--a network connecting desktop
computers--is basically the same as tomorrow's.
This, of course, is nonsense. The net continues to soar in ubiquity,
bandwidth and function. More than one billion people will be on-line by 2005.
It is the means not only by which computers will connect, but the mechanism
by which individuals and organizations will collaborate, exchange money and
conduct transactions. Mobile computing devices, broadband access, wireless
networks, and computing power embedded in everything from refrigerators to
automobiles are converging into a global network. All other communications
technologies, such as telephone, radio and television, are being sucked into
the net's maw.
The internet of tomorrow will be as dramatic a change from the internet of
today as today's internet is from the primitive, unconnected, proprietary
computing networks of yesterday.
This leads to Porter's second major error. He fails to appreciate that this
complex and ever-expanding communications medium will precipitate deep and
profound changes to the structures of successful businesses.
The 20th-century corporation did everything-it was vertically integrated.
This model worked best because the costs and difficulties of collaborating
with partners outside the firm were greater than performing such activities
inside the corporate walls.
But the digital economy is bringing forward myriad new models-fluid
congregations of businesses, sometimes tightly structured, sometimes
amorphous-that use the net to create value for customers in unprecedented
ways. These new models are possible because the net smashes the costs of
partnering. Companies can now focus on their core capabilities and partner to
do the rest. When done properly, such business webs create better and less
costly products and services than the old corporation.
Established businesses such as Enron, Citibank, American Airlines, Nortel,
Schwab and many product divisions of GE are now transforming themselves by
partnering in areas that were previously unthinkable. Boeing CEO Phil Condit
calls his company a systems integrator, not an aircraft manufacturer. IBM is
a computer company that doesn't make its computers-its partner network does.
Newer companies based on the internet, such as eBay, Travelocity and E*Trade,
are competing well despite volatility in their stock prices. Napster is
causing chaos in the music industry and forcing every company to rethink its
value. Linux and the open-source movement pose a huge threat to Microsoft.
And this is just the beginning.
Yet Porter continues to champion the old, vertically integrated model, and
his HBR article criticizes corporations for partnering. But we can already
see that the traditional model is an increasingly less effective vehicle. It
is akin to entering a Formula One race with a golf cart. No matter how
well-built and skillfully driven, it will never win.
Don Tapscott is chair of itemus (www.itemus.com) and co-author of Digital
Capital. He can be reached at dtapscott@itemus.com

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

India Enron Panel Lacks Authority to Solve Dispute, Expert Says
2001-05-25 07:16 (New York)

India Enron Panel Lacks Authority to Solve Dispute, Expert Says

     Mumbai, May 25 (Bloomberg) -- Indian negotiators lack the
authority to solve a dispute that has shut down Enron Corp.'s $3
billion power plant, India's single biggest foreign investment,
said a former member of the negotiating committee.
     The negotiators will meet Enron officials on Tuesday next
week, though any proposals made will not be binding on either
Dabhol Power Co., 65 percent owned by Enron, and the Maharashtra
State Electricity Board, the official said. Maharashtra, Dabhol's
sole customer, has refused to pay some of its power bills.
     ``Where is the guarantee Enron and the government will accept
what the committee recommends,'' said R.K. Pachauri, director-
general at the Tata Energy Research Institute, a research
organization. Pachauri said he quit the committee because it was
being asked to renegotiate the project, when it was set up to
solve the payment dispute.
     Maharashtra yesterday served Dabhol notice canceling the
power purchase contract, six days after Dabhol gave the board
notice it was set to pull out of the project in six months.
     The board has refused to pay Dabhol 3 billion rupees for
power supplied in December and January, saying the bills should
reflect a 4 billion rupee penalty it imposed on the company Jan.
28 for failing to supply power at full capacity.

                            Meeting

     Other India officials said the two parties can't afford not
to negotiate as there is too much at stake.
     Mahrashtra and Dabhol serving each other notices is ``simply
legal maneuvering,'' said Kirit Parikh, an economist on the prime
minister's economic advisory council.
     ``It won't affect the process of finding a solution because
``the ground reality is neither Enron nor Maharashtra can afford
not to find a compromise'' to the dispute, Parikh said.
     The government needs a solution as it could be left footing
the bill.
     India's federal and state governments, which have guaranteed
the board's payments for power and some of the loans to help fund
the project, may have to pay Dabhol more than 170 billion rupees
($3.6 billion) if it terminates the 2,184 megawatt power project.
     ``We are going back to Maharashtra tomorrow to work on the
problem.'' Dabhol managing director Wade Cline said. Cline was in
New Delhi to meet A. K. Basu, secretary to the ministry of power.

India's Negotiator Gokak on Dispute With Enron Unit: Comment
2001-05-25 05:35 (New York)

     Mumbai, May 25 (Bloomberg) -- A.V. Gokak, the Indian federal
government's nominee in discussions with Enron Corp.'s Dabhol
Power Co. on a dispute over dues with the western province of
Maharashtra, on the next meeting of the negotiating panel.

     ``According to me, the committee is still there. Till the
committee is formally dissolved we exist.''

     Dabhol Power said yesterday the Maharashtra State Electricity
Board, its sole customer, served notice that it's canceling their
seven-year-old power purchase contract.

     ``I have been told even today that the meeting is as
scheduled on May 29 and I will be there to attend it.
     ``There have been any number of instances where such
developments take place and the committee continues its
negotiation.''

India Govt: State Bd To Likely Pay Dabhol Apr Elec Bill

05/25/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI -(Dow Jones)- India's Maharashtra State Electricity Board is likely
to pay its electricity bill for April to U.S. energy major Enron Corp.'s
(ENE) Indian unit, Dabhol Power Co., a senior Power Ministry official said
Friday.
"My understanding is that MSEB will pay up its bill for April to Dabhol Power
under protest," the official said without elaborating.
Jimmy Mogal, Enron India's spokesman declined to comment on the size of the
April bill. MSEB Chairman Vinay Bansal wasn't available for comment.
Media reports have speculated that the bill was around 1.37 billion Indian
rupees ($1=INR46.95).
Dabhol has come under fire because of the relatively high cost of its power.
Critics object to Dabhol charging INR7.1 rupees a kilowatt-hour, compared
with INR1.5/KWh charged by other suppliers.
The $3 billion Dabhol project has been mired in financial disputes since its
main customer, the Maharashtra State Electricity Board, has failed to pay
several of its bills.
DPC confirmed Thursday that the MSEB has declared its contract to purchase
power from the US$3 billion Dabhol plant null and void, but it said the move
by its client was without merit.

-By Himendra Kumar, Dow Jones Newswires; 91-11-461-9427;
himendra.kumar@dowjones.com

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

PGE sees gains despite power costs

05/25/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

PORTLAND, Ore. (AP) - Power prices may have hit an all-time high, but
Portland General Electric showed record revenues in the first part of the
2001.
With earnings of $43 million for the quarter ended March 31, a 10 percent
increase from year-ago levels, PGE clearly has stepped-up sales activity as
wholesale electricity prices have surged.
Utility officials have told state regulators that if the good times continue,
they will share some of the benefits with customers through credits or
refunds.
But the cost of buying electricity for 728,000 Oregon customers has climbed
dramatically, and the volatility casts doubt on the possibility of refunds
for PGE customers this fall.
PGE's quarterly report showed revenue from wholesale power sales rose to $480
million, three times the posting for the same period a year earlier.
"We were able to do fairly well," said James Piro, chief financial officer
for PGE.
But costs also climbed dramatically. Because PGE's power plants produce less
than half the electricity needed to serve the utility's residential and
business customers, it buys power on the same high-priced markets into which
it sells. It also buys natural gas to fuel some of its generators - an
increasingly expensive commodity.
The costs of electricity and fuel totaled $582 million for the quarter ended
March 31, almost twice PGE's tab for the same period of 2000.
PGE's success on the wholesale market involved luck as well as trading savvy.
The utility anticipated a cold winter, along with the increase in demand, and
bought an extra cushion of electricity supplies. When the season proved
unusually mild, PGE found itself with a surplus to sell. Because prices were
on the rise, PGE benefited from subsequent trades.
Dry weather, however, is cutting into PGE's hydropower resources, and
wholesale prices are easing slightly. These conditions could crimp PGE's
ability to continue to profit from power sales and hold down earnings.
On the other hand, if a heat wave sweeps through the region and PGE still has
extra power to sell outside Oregon - to the Southwest, for example - sales
revenue could surge as prices rise.
Under a plan approved by regulators to help deal with volatile electricity
markets, PGE will track all power costs incurred from January through
September. If costs exceed certain levels, a rate increase will result. If
profits exceed certain thresholds, refunds will occur.
Whether increase or refund, regulatory review is required.

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

India: Pachauri rejects Godbole's remarks

05/25/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) -
Asia Intelligence Wire

NEW DELHI, May 24. DR R.K. Pachauri, a member of the Review Committee set up
by the Maharashtra Government on the Dabhol controversy, has voiced his
concern on a fellow member's recent statement in a leading national daily on
the issue.
In a press statement released here, Dr Pachauri has contended Mr Godbole's
statement that, "The committee has also suggested that the judicial enquiry,
headed by a service or a retired Supreme Court judge should be initiated as
soon as possible."
According to Dr Pachauri, this statement needs to be seen in the context of
the fact that three out of the five members in the committee recorded their
strong dissent with this view. "Can the view of two members of the committee,
clearly a minority, be read as 'the committee has also suggested...'," Dr
Pachauri has argued.
According to him, "Can a judicial enquiry really force Enron back to the
negotiating table?"
In the press statement, he has thrown up several other questions -Can the
Maharashtra Government renegotiate a deal with Enron if a judicial enquiry is
in progress, and would the public accept any such deal till the enquiry is
over? And till it is over, the Maharashtra Government would continue to run
up huge bills even as the State is unable to absorb the power generated by
Dabhol.
Our Bureau

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

India: India, Australia sign pact on energy, mining

05/25/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) -
Asia Intelligence Wire

NEW DELHI, May 24. INDIA and Australia have signed a protocol for
strengthening bilateral cooperation in the areas of mining, power,
non-conventional energy sources and coal. The protocol followed two days of
deliberations by the Indo-Australia Joint Working Group on Energy and
Minerals set up in 1999.
After the signing ceremony here on Thursday, the leader of the Australian
delegation, Mr Tim Mackey, Deputy Chief Executive Officer, Department of
Industry, Science and Resources, said that a lot of investments from
Australia may flow into India following the recent policy changes initiated
by the Indian Government.
There are potential opportunities for enhanced cooperation between the
private sectors of the two countries, he said and added that there will be at
least three joint venture projects coming up in the power sector, some in LNG
and gas pipelines and a few technology transfers.
In view of the ongoing controversy about Enron Corporation's Dabhol power
project, Mr Mackey said that Australian companies are not bothered with the
controversy and it will not have any impact on their entry into the Indian
power sector.
He said that there are three proposals for supplying of liquefied natural gas
(LNG) to potential terminals in the eastern coast of India involving
investments worth $3 billion.
Australian firm Woodside, he said, is a partner in Dakshin Bharat Energy
Consortium Ltd selected by Tamil Nadu Industrial Development Corporation
(TIDCO) to establish an LNG terminal at Ennore.
Another Australian firm - Broken Hill Proprietaries (BHP) - to set up an LNG
terminal in the eastern coast for which the spot is yet to be identified. BHP
also has plans to enter the power sector in India.
The head of the Indian team, Dr Aruna Bagchee, Joint Secretary, Ministry of
Mines, said that this second meeting of the joint working group has yielded
very positive results in terms of enhancing bilateral ties between the two
countries and will go a long way in promoting Australian business community
to come and explore the opportunities thrown open in India's mining sector.
Australia has agreed to assist in enhancing the capacities of Indian mining
regulatory and developmental oriental organisations like the Indian Bureau of
Mines and the Geological Survey of India to strengthen customer and
user-friendly basic data.
The next meeting of the joint working committee will be held in Sydney next
year.
Our Bureau

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

India: MSEB slaps notice on DPC

05/25/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) -
Asia Intelligence Wire

MUMBAI, May 24. THE Maharashtra State Electricity Board (MSEB) today issued a
legal notice to Enron under the Indian Contract Act, claiming the power
purchase agreement (PPA) with Dabhol Power Company (DPC) as "void".
In the notice, MSEB has said it had been forced to "rescind" the PPA with DPC
and is "avoiding" the contract. DPC had "misrepresented material facts" while
drawing up the PPA and hence it is "no more bound by the contract", it said.
The notice, which has been served under Section 19 of the Indian Contract
Act, claims misrepresentation in performance of the plant as per clauses 6
and 7 under schedule 6 of the PPA.
A senior MSEB official said, "we were expecting a certain level of
performance from the plant. The contract was entered into as per assurance
about a certain level of plant performance from DPC, which we found to be a
misrepresentation. We are now exercising the option under Indian law of
avoiding the contract."
"MSEB does not have the right to rescind the PPA as attempted in their
letter," DPC said in a statement issued here.
" It would appear that MSEB's notice is a deliberate attempt to further delay
the resolution of difficult issues confronting MSEB. The board has chosen an
obscure and improper justification for attempting to rescind a contract that,
in any event, was signed more than seven years ago. In any case, this basis
and many of MSEB's related claims are already subject of a pending
arbitration initiated by DPC."
According to the MSEB official, although DPC is free to contest the notice,
they can do so only in Indian courts.
The relevant clauses of the PPA relate to making power available at full
capacity within three hours. MSEB has been claiming that DPC has not been
generating power at full capacity and had slapped three penalties of Rs 400
crore each. It had also sought that its bills be adjusted against the amount.
The issue had led to protracted quarrels between DPC and MSEB which ended up
in conciliation, arbitration and now, finally, the termination notices.
According to State Government sources, Enron had an inkling of what was
coming. They also hinted that it could have prompted DPC to serve the
preliminary termination notice (PTN). Banking sources too said the company
had "feared" that MSEB may serve a termination notice.
The board official said MSEB would henceforth not be under any obligation to
buy power from DPC. "But since the plant cannot be shut down, we have offered
to purchase power as per the PPA. Of course, they too are not obligated to
supply power," he said.
The legal notice is, however, not likely to affect the renegotiation.
Dr Madhav Godbole, Chairman of the renegotiation panel, told Business Line
that the legal notice would not affect the normal course of the proceedings.
"The two processes would continue alongside," Dr Godbole said.
* * *
Centre awaits negotiations
NEW DELHI, May 24. THE Centre is willing to consider any worthwhile idea
emerging out of the negotiating committee for the settlement of the dispute
between Dabhol Power and MSEB, according to the Union Power Minister, Mr
Suresh Prabhu.
An official release issued today states that any such proposal has to be
acceptable to both the MSEB as well as the DPC.
Industry sources, however, point out that the Centre's stated position is not
likely to provide a breakthrough since the Centre has endorsed a
consensus-driven approach with its involvement restricted to the
participation of its member Mr A.V. Gokak in the negotiating committee.
A meeting between Dabhol Power Company and Ministry of Power is slated to be
held on Friday following DPC's request to the meet the Power Secretary, Mr
A.K. Basu.
Our Bureau

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

AUSTRALIAN FIRMS EYE INDIAN POWER AND MINING SECTOR

05/25/2001
Asia Pulse
(c) Copyright 2001 Asia Pulse PTE Ltd.

NEW DELHI, May 25 Asia Pulse - The Enron controversy notwithstanding, the
Australian transnational companies plan to invest US$3 billion in the Indian
energy sector over the coming years.
This was announced at the end of two-day meeting of India-Australia Joint
Working Group on Mines and Energy, here.
"Our companies plan to invest $3 billion in the energy sector over the next
few years", Tim Mckey, Head of the Australian delegation said here.
On the mining front Mckey announced that Australian firms were interested in
investing in development of science and technology for cleaning up mines.
Indian delegation headed by Aruna Bagchee, the Joint Secretary (Mines),
briefed the Australian counterparts about the recent changes in the
investment policies aimed at atrracting foreign direct investment.
The meeting also discussed possibilities of cooperation in other areas like
non conventional energy sources.
The working group has identified specific proposals for follow up action
including a projects for mineral processing and benefication of minerals.
(PTI) 25-05 1051

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

Bechtels out if dues not paid by May 31
Anto T Joseph

05/25/2001
The Economic Times
Copyright (C) 2001 The Economic Times; Source: World Reporter (TM)

FRUSTRATED by a series of payment defaults, US-based Bechtel has threatened
the Enron-promoted Dabhol Power Company that it will withdraw from the
controversial project by May 31, if its dues are not paid.
In a letter written to DPC, Bechtel which is the EPC contractor for the 2,184
mega-watt project and also a minority stake holder (10 per cent) in DPC has
said it was stopping civil work at the site in coastal Maharashtra.
Sources from financial institutions said that the unit I of the projects
phase-II, which was slated to be operational commercially by June, will not
be ready by then, after Bechtel stopped work at the site. Around 10 to 15 per
cent of the work is yet to be completed, sources added.
Both Bechtel and DPC refused to comment on these developments. FI sources
said the issue will be discussed threadbare at the meeting in New Delhi on
Friday called by the Centre.
While Bechtel issued the May 31 deadline to DPC to make its outstanding
payments, lenders have refused to bail out the project with any further debt
disbursements.
The preliminary termination notice issued by the cash-starved DPC has
compounded the matter, according to FI sources.
The ongoing payment impasse, involving MSEB and the state and central
governments, has resulted in delays in payments to vendors for the second
phase of the power project.
On May 2, Aric Oakf, project director of Bechtel India, had said his company
was concerned about the payment defaults. He had said that the company was
exploring various options as per the EPC contract.
On May 3, the Economic Times had reported that Bechtel was considering
pulling out of the project. Though there were defaults and delays in payment,
the company had continued with the construction work at the site.
Sources said DPC was not in a position to change the situation, unless
lenders soften their stance and start funds disbursal. The lenders have held
back around $250 million payment out of the committed debt, after the project
ran into a series of controversies.
Bechtel, one of the largest engineering construction firms in the world, has
set up more than 450 power plants, installed more than 6,800 kilometers of
high voltage transmission lines, and is the leading builder of independent
power projects worldwide.

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

Govt in a fix over asking NTPC to take over Dabhol
Santosh Tiwary & P Vaidyanathan Iyer NEW DELHI

05/25/2001
Business Standard
2
Copyright (c) Business Standard

The possibility of National Thermal Power Corporation (NTPC) being roped in
to keep the 2,184 mw Dabhol power project running has been discussed at the
highest level in the government. Enron can sell its 65 per cent stake in the
$1 billion (Rs 4,700 crore) equity of DPC even during the six month period
before the lapse of the preliminary termination notice, according to its PPA
with Maharashtra State Electricity Board. The sale however will have to be
routed through the MSEB.
The government however faces a major dilemma over asking NTPC to take over
the project given the political ramifications of the move which could be
construed by other states as direct bailing out of Maharashtra, sources said.
Given the composition of the Vajpayee-led NDA government, any move towards
taking over Dabhol through NTPC would immediately invite the ire of other
strong allies including Andhra Pradesh chief minister N Chandrababu Naidu.
Several IPPs in Andhra Pradesh and other states are still awaiting financial
closure. Sources said though NTPC's involvement in DPC at present was not
advisable, they noted that the Rs 19,220-crore public sector Navratna had all
the resources and expertise to chip in if Enron exited. With NTPC having
piled up huge reserves of over Rs 15,000 crore, shelling out $ 650 million
(Rs 3,055 crore) to acquire Enron's 65 per cent stake will not be a big deal
if the Centre gives a green signal. Besides, NTPC also has expertise in
handling dual-fuel projects based on gas and naphtha. They said NTPC had
seven such gas/naphtha-based projects including Anta, Auriaya, Kawas and
Gandhar. NTPC officials however declined to comment on this issue. The
possibility of a private player picking up Enron's equity in the $ 3 billion
power project has also not been ruled out. Sources said given the fact that
Madhav Godbole committee recommended keeping the project alive, MSEB would
not pose any hurdle in Enron transfering its equity to any serious Indian
private sector company.

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

MSEB rescinds Dabhol PPA
Our Regional Bureau MUMBAI

05/25/2001
Business Standard
1
Copyright (c) Business Standard

The Maharashtra State Electricity Board today rescinded the power purchase
agreement (PPA) it had entered into with the Dabhol Power Company (DPC) on
May 23, 1993, in response to the preliminary termination notice (PTN) issued
to it by the power major on Saturday. The notice issued to Enron India
managing director C Wade Kline (dated May 23, 2001) by MSEB chairman Vinay
Bansal said: "We are now convinced that your conduct is not bona fide and as
such we are constrained to rescind the PPA with immediate effect." The MSEB
will file a case tomorrow with the state electricity regulatory commission.
DPC, in a release issued here, confirmed having received the termination
notice and added: "In any case, many of MSEB's related claims are already the
subject of a pending arbitration initiated by DPC. Our arbitration notice of
April 12, 2001, should serve as evidence of our confidence in DPC's legal
position and we expect that the issues in arbitration will be resolved to our
satisfaction." The MSEB notice for its part noted: "On January 28, 2001, to
meet our urgent requirement we instructed you to deliver your fully declared
baseload of 657 mw within three hours. You, however, failed to deliver the
energy required and committed a breach of the PPA. Similar defaults occurred
on February 13 and March 29, 2001." It went on to state: "In the letter
addressed to us after January 28, you (DPC) have admitted that your power
plant does not conform to the PPA and is not capable of meeting the
contractual terms in respect of crucial operating characteristics and dynamic
parameters." MSEB has thus justified the termination of the PPA and pointed
out to DPC that in the above mentioned circumstance it was advised of the PPA
being void at its (MSEB's) option. DPC has been blamed by the state
electricity board of intentionally adopting a non-cooperative attitude and
instead embarking upon a campaign to create confusion and obfuscate issues.

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

USA: Business school grads rediscover energy business.
By Carolyn Koo

05/24/2001
Reuters English News Service
(C) Reuters Limited 2001.

NEW YORK, May 24 (Reuters) - Let's face it. Getting a job in the staid energy
business hasn't exactly been considered the pinnacle of success for ambitious
business school graduates.
Maybe it should be, since a national energy crisis makes conditions ripe for
a resurgence of interest in the industry from both newly minted MBAs and
experienced executives.
At the very least, power companies won't soon go out of business given record
profits for many in the last year at a time when dot-coms and tech companies
are struggling or failing.
"The industry is seen as a growth industry with a lot of happenings, and it's
very newsy," said Randy Wheeless, a spokesman for Duke Energy Corp. , a
traditional North Carolina utility which now trades power all over the
country.
After all, with the advent of deregulation, more financially-oriented jobs
are available. Also, students are more aware of energy issues including
blackouts in California, which have featured prominently in the headlines.
And just last week, President George W. Bush, himself a former oilman,
unveiled a new national energy plan to combat the crisis.
That plan calls for the use of cleaner-burning coal and possibly nuclear
power as well as more traditional fuels like natural gas and could open up
brand-new avenues of employment in the business.
Duke's Wheeless noted that the utility has seen more interest in its openings
and, for that reason, has stepped up its recruiting at college campuses.
That interest stems from factors like "the growth of the industry, which
moves at a very dynamic and aggressive pace," said James Peters, a spokesman
for Mirant Corp. , which markets electricity and natural gas and owns power
plants from North America to Asia.
"The hours are better than investment banking and you get the same kind of
money," he added.
Indeed, the power industry has undergone a sea change. Because of
deregulation, "there are new management opportunities and new trading
opportunities in the electricity and natural gas industries," explained
Stephen Brown, director of energy economics at the Federal Reserve Bank of
Dallas.
Deregulation enabled utilities to engage in the profitable business of
selling wholesale power across borders, opening the way for new opportunities
that cater specifically to the strengths of people with financial
backgrounds.
"The new merchant energy companies have built real dynamic cultures with a
commercial orientation and a market focus," said Ron Lumbra, an executive
director who specializes in the merchant energy field at recruitment firm
Russell Reynolds.
"It's a business where there's a huge component in marketing, trading and
structured transactions," he added.
The MBA curriculum, with its emphasis on finance and risk management, teaches
skills that are transferable to the new needs of energy companies.
"With their skill set, they can go into a number of different areas, like
strategic development, risk management, trading and anything on the
commercial side of the business," noted Kim Pollard, a recruiter at Richard,
Wayne and Roberts.
This new emphasis means that energy companies are beginning to look like
high-tech companies. "There's a real demand for talent," Lumbra said. "And
these companies can compete with any company in any industry."
A prime example of a new energy company is Enron Corp. , which trades
everything from electricity to broadband to weather derivatives. Other names
are Dynegy Inc. ; El Paso Corp. ; and Duke Energy. Mirant, for instance,
recruits students from Duke University, University of Chicago and Rice
University, among others.
Exelon Corp. also stepped up its recruiting efforts three years ago,
according to Caryl Sabine, a consultant at Exelon Power Team, Exelon's
wholesale trading and marketing organization.
During the recruiting season in September, Exelon will target business
schools at Harvard, the Wharton School of the University of Pennsylvania, the
University of Chicago, Cornell University and Carnegie Mellon University,
among others.
New business school graduates aren't the only ones considering a career in
the energy sector either.
Lumbra pointed out that at more senior levels there's also "much more
willingness to discuss a move to the energy business," from a cross-section
of other industries, including professional services, technology companies,
industrial companies and financial services firms.
That's partly because of the attention commanded by the energy crisis, which
has included rolling blackouts in California where deregulation failed. With
millions and even billions of dollars at stake in markets like this,
companies are seeking seasoned executives.
"Energy is not so much a take-for-granted kind of service anymore, where you
just flip a switch or pull up to the gas pump," Lumbra said.

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

State utility cancels agreement Enron power purchase pact
By RAMOLA TALWAR BADAM
Associated Press Writer

05/24/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

BOMBAY, India (AP) - A state-run utility notified the Indian subsidiary of
U.S. power giant Enron Corp. on Thursday that it was canceling an agreement
to buy power from the company and accused the power generator of
misrepresenting its capacity to produce electricity.
The notification comes four days after Dabhol Power Co., Enron's Indian unit,
issued a preliminary notice to the Maharashtra State Electricity Board that
it would stop selling electricity if the government company continued to
default on payments.
Houston-based Enron confirmed it had received MSEB's notice, but said the
utility had no legal right to cancel the purchase agreement.
A top MSEB official told The Associated Press that the plant has failed in
some instances to produce required power within the time frame stipulated in
the 1995 agreement that details the purchase of power from Dabhol.
"Over the last two years it has been established that the plant cannot
achieve this, so the assertions made by Dabhol Power Company earlier were in
the nature of misrepresentation," the official said.
Controversy over the six-year-old power purchase agreement has affected the
$3 billion project, the largest foreign investment ever in India, that is
being set up in Dabhol, 210 miles south of Bombay.
Indian politicians argue that Maharashtra state cannot afford the tariff of
the naphtha-based power plant and have called for renegotiating the purchase
agreement.
While Enron charges MSEB with defaulting on overdue December and January
bills of $48 million, MSEB says this should be offset by an $85.31 million
fine it levied on Enron for not being able to supply power.
Representatives of the federal and state government and the power utility are
currently engaged in talks with Enron officials as part of a six-month
reconciliation process.
Enron described MSEB's notification as a "deliberate attempt" to delay
resolution of the dispute.
"MSEB has chosen an obscure and improper justification for attempting to
rescind the contract," said Dabhol spokesman Jimmy Mogal in a statement.
"It is clear that MSEB does not have the right to rescind the power purchase
agreement as attempted in their letter."

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

El Paso's Chairman to Testify in Gas-Price Hearing (Update1)
2001-05-24 20:39 (New York)

El Paso's Chairman to Testify in Gas-Price Hearing (Update1)

     (Adds hearing details from 12th paragraph.)

     Washington, May 24 (Bloomberg) -- El Paso Corp. Chairman
William Wise agreed to testify in a federal hearing after the
judge angrily accused another company executive of dodging
questions on whether El Paso officials conspired to manipulate
California natural-gas prices.
     Wise wasn't scheduled to testify in the Federal Energy
Regulatory Commission hearing, and El Paso volunteered Wise's
testimony after the judge threatened to subpoena him.
     Judge Curtis Wagner lashed out at Executive Vice President
Ralph Eads, also president of El Paso's merchant energy group,
accusing Eads of avoiding the question of whether he sought Wise's
permission to enter into a contract that plaintiffs say was meant
to drive up California gas prices.
     ``I'm just appalled that you're trying to pull this over my
head,'' Wagner said. ``If I have to subpoena (Wise) ... I am
perfectly willing to do it.''
     The judge is examining charges that El Paso's pipeline unit,
El Paso Natural Gas, sold more than a billion cubic feet of
pipeline capacity into California to its merchant energy
subsidiary, which then withheld gas shipments to drive up prices.
    Eads previously testified that he and other merchant energy
executives met with Wise to tell him about the imminent contract.
Wise didn't want to hear too many details because of FERC
prohibitions against regulated and unregulated affiliates of the
same company unfairly colluding on contracts, Eads said.
     The California Public Utility Commission, PG&E Corp.'s
Pacific Gas & Electric Co. and Edison International's subsidiary
Southern California Edison Co. brought the charges against El
Paso.
     The FERC is looking into why the average price of gas has
jumped almost fivefold in California this year compared to a year
earlier, and why prices there are much higher than elsewhere in
the country. Gas is used to fuel many power plants, and the
average price of electricity at the California-Oregon border has
soared more than ninefold this year.

                      Valentine's Day Meeting

     Wagner was particularly concerned about an affidavit by Mark
Mitchell, a former senior vice president with the merchant energy
unit now in charge of South American trading for the company.
Mitchell said the Feb. 14, 2000 meeting with Wise was ``prepared
in an effort to solicit endorsement of Merchant's participation in
the auction'' for the pipeline capacity.
     ``It seems to me Mr. Wise put his blessing on this,'' Wagner
told Eads. After further questioning, Wagner stated: ``Mr. Wise
did approve it.''
     ``Yes,'' Eads said.
     Wise is expected to testify tomorrow afternoon, and the trial
is expected to continue into next week.
     Wagner also released to the public a single comment from a
document El Paso officials contend must remain sealed because it
contains sensitive information about the company's business
practices.
     The line, from an April 14, 2000, memo to Wise, reads: ``We
will make money two ways: 1) increase the load factor, 2) widen
the basis spreads.''

                           Basis Spread

     California's regulators and utilities accuse El Paso of
withholding pipeline capacity to drive up the ``basis spread,''
the difference between the price of natural gas sold where it is
produced and the price at the California border. Later, after the
border price rose, the company increased shipping to take
advantage of the high price, they allege.
     According to the FERC, spot prices in California were around
$2.50 per thousand cubic feet during most of last year, similar to
the rest of the country. By December, prices had risen to between
$11.79 and $18.80 per thousand cubic feet, while in other regions
they ranged from $4 to $7.
     Eads testified that the line from the memo exonerates El Paso
because it shows the company's intent from the beginning to
increase gas shipments to California.
     El Paso thought increased gas supplies from Western Canada to
Chicago, imported on a new pipeline, would pull supplies away from
California, raising the basis spread and allowing more gas
shipments, Eads said. Instead, demand in California has taken gas
away from the new pipeline, he said.
     The material ``is meaningful in the sense that they actually
realized what they intended,'' Kevin Lipson, representing Southern
California Edison, said in an interview. ``They accomplished what
they set out to do.''
     Houston-based El Paso's shares fell $1.51 to $63.50. They
have declined 11 percent this year.


A little greater  minutia


CALENDAR ENTRY:	APPOINTMENT

Description:
	Ava-1/2 Vacation NOON

Date:		5/18/2001
Time:		5:00 PM - 6:00 PM (Central Standard Time)

Chairperson:	Outlook Migration Team

Detailed Description:


Please find the enclosed El Paso Electric model for August 27th, 2001

Regards,

Bert Meyers


----- Forwarded by Steven J Kean/NA/Enron on 02/28/2001 02:07 PM -----

	Michael Tribolet/ENRON@enronXgate
	02/27/2001 09:41 AM

		 To: Steven J Kean/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, James D
Steffes/NA/Enron@Enron, David W Delainey/HOU/EES@EES,
jklauber@llgm.com@SMTP@enronXgate
		 cc:
		 Subject: Transmission value and first mortgage debt

The proposed purchase of the PGE and SCE's transmission grids have vastly
different short term liquidity effects for PGE and SCE.   If the current
proposal is at 2.3x book, and assuming the first mortgage bond holders want
complete repayment in return for releasing their liens, the numbers (at
12-99) fall out:

in millions                   PGE        SCE

Book Value                    1.43       1.90
Multiple of Book              2.3x       2.3x
Cash Price                   $3.29      $4.37

-First Mortgage Bonds        $3.35      $1.18
Resulting liquidity         ($0.06)     $3.19

Note that the first mortgage holders may release their liens in return for
partial payment based on remaining value.  Nonetheless, PGE's situation is
not as flexible.


Drew, here's my first stab at a rehearing argument.  I did not go as far as I
could have because I really think we should argue that there should be no
limitation at all and that TW should be able to decide for itself what
capacity it can sell as firm.  Instead, I've proposed a solution that will be
less controversial, as we discussed earlier this week.  If you think this
passes the laugh test I can do some rewriting and circulate it.

My biggest concern is portraying PNM's capacity as "firm" or "interruptible"
since PNM does not use that terminology, in its tariff or otherwise, except
to assure us over the phone that it is firm!  I'd like to check to see if PNM
is comfortable with all this before we file anything.

Call when you can; this is not due 'til Oct. 15.


Kelly M. Johnson
Executive Assistant
Enron Corp.
Tel: 713-853-6485
Fax: 713-853-2534
E-Mail: kelly.johnson@enron.com


Regards

Karen


John,

I think I misspoke (or miswrote).  The change I suggested would belong in
both versions.


Rogers:
Just wanted to meet up tomorrow for a few minutes to discuss some trading
opportunities.  I think you said tomorrow at 3:30 pm would work for you.
Thanks!
Ben
3-7998


your right...................how's my man..?........did .....You....miss me?


El Paso Merchant Ordered to Relinquish Data

FERC yesterday ordered El Paso Merchant Energy to stop stonewalling and turn
over protected materials to parties involved in a complaint case in which
it's alleged the affiliate received preferential treatment when it acquired
1.2 Bcf/d of firm capacity on El Paso Natural Gas.

Specifically, the Commission denied El Paso Merchant's request for rehearing
of a June 2000 order that granted in part the discovery sought by the
California Public Utilities Commission, and rejected rehearing of a September
protective order. The latter directed El Paso Merchant to make available to
all intervening parties, who agreed to the terms of the protective order, all
of the materials that were being submitted to the CPUC and FERC in the case.

So far, El Paso Merchant has refused to release the information to these
parties, claiming the materials being filed with the CPUC and FERC are for
"Government Eyes Only." It also argues that the protective order offers
inadequate protection of commercially sensitive information.

The Commission disagreed. "El Paso Merchant has not substantiated or
sufficiently justified its broad claim that all of the 'protected materials'
provided to CPUC and this Commission warrant the designation 'Government Eyes
Only.' Indeed, all of the information that El Paso Merchant seeks to
shield...relates directly to the issues," the order said [RP00-241]. Also,
FERC finds that the protective order provides "sufficient protection for El
Paso Merchant's commercially sensitive documents."

The CPUC brought the complaint last April. It is seeking to abrogate the $38
million contract arrangement between El Paso and El Paso Merchant. The agency
alleges the affiliate was given "preferential treatment" by El Paso during
the open season for the capacity, and thus the contract arrangement should be
declared void.

The CPUC and others contend the contract arrangement, which awarded more than
one-third of El Paso's capacity rights to the California border to El Paso
Merchant, is largely responsible for the high natural gas and electric prices
in the state. They have urged FERC to "act immediately" on the merits of the
complaint, but the Commission has yet to do so.


Carol St. Clair
EB 3889
713-853-3989 (Phone)
713-646-3393 (Fax)
carol.st.clair@enron.com
----- Forwarded by Carol St Clair/HOU/ECT on 05/25/2001 10:01 AM -----

	Roderick Nelson/Enron@EUEnronXGate
	05/25/2001 09:58 AM

		 To: Greg Wolfe/ENRON@enronXgate
		 cc: Carol St Clair/HOU/ECT@ECT, Tracy Ngo/ENRON@enronXgate
		 Subject: RE: Kaiser Aluminum & Chemical Corporation - UK and US swaps

Hey Greg.  I see no objection to amending the ISDA to cover power
transactions.  Also,  potential credit exposure related to a prompt month
power trade should be modest.  You may want to ensure that Tracy has no
objection, but this transaction should be fine.

Rod

 -----Original Message-----
From:  Wolfe, Greg
Sent: 25 May 2001 15:51
To: Nelson, Roderick
Cc: St Clair, Carol; Ngo, Tracy
Subject: RE: Kaiser Aluminum & Chemical Corporation - UK and US swaps

Rod:

We are looking at doing a June physical index power purchase today with
Kaiser. however, Kaiser only wants to proceed if we can assure them that we
can add electricity to the existing ISDA between Enron and Kaiser such that
they could fix the price during the month of June. After reading your comment
below about netting it appears that a longer term transaction would not be
advisable until further legal clarification occurs. Is there any reason we
can't or shouldn't pursue adding electricity to the ISDA provided we only do
one month transactions (assuming we see no risk of near term bankrupcty)?
Please advise immediately.

 -----Original Message-----
From:  Nelson, Roderick
Sent: Friday, May 25, 2001 2:53 AM
To: Ngo, Tracy
Cc: St Clair, Carol; Shackleton, Sara; Pitt, Michael; Boyd, Justin; Evans,
Mark; Wolfe, Greg
Subject: RE: Kaiser Aluminum & Chemical Corporation - UK and US swaps

Tracy,

Did you have a chance to read my email response earlier this week?  I believe
that it is highly unlikely that we will be able to net exposures across
non-defaulting (Enron) entities.  Paul Simons can (and maybe has by now)
given opinion to this idea.  Historically, I believe the opinion has long
been that such netting (set-off against affiliates of non-defaulting party)
in the US should work within the case of contractual default, but outside of
bankruptcy.  However, in the special case of legal bankruptcy, such netting
(though contractually agreed by the parties) may be challenged.  Introducing
the fact that one of Enron's entities is a UK entity may further cloud the
likelihood.  Clearly, if the relationship involves more than on Kaiser
entity, netting almost certainly will not work.

Has Diana not responded to your credit exposure questions regarding the form
of governing confirmation and legal entity?  I believe that she is in the US,
but should be checking in.  Perhaps you should try calling her?  I think we
will find that the transacting entity is a subsidiary of Kaiser Aluminum.

Risk management systems for metals are still not ideal.  Volumetric/CVAR type
analysis may not yield such reliable results.

Rod

 -----Original Message-----
From:  Ngo, Tracy
Sent: 24 May 2001 22:15
To: Nelson, Roderick
Cc: St Clair, Carol; Shackleton, Sara; Pitt, Michael; Boyd, Justin; Evans,
Mark; Wolfe, Greg
Subject: Kaiser Aluminum & Chemical Corporation - UK and US swaps
Importance: High

Rod,

Enron North America is looking to enter into power swaps with Kaiser Aluminum
& Chemical Corporation starting June 2001.  I'm seeing in the credit system
that MG plc has forward financial metals positions with Kaiser, however I
need clarification on whether the swaps are done with Kaiser Aluminum &
Chemical Corporation or Kaiser Aluminum International Inc.  Secondly, is
there a Master ISDA Agreement governing those swaps?  In pulling the mtm
monthly breakout, it appears that MG plc is OTM north of $10MM US and the
liquidation of that portfolio occurs mostly in cal '02.

Given Kaiser's limited credit line, I'd like to look into the potential of
setting off financial exposures in the UK and US in cases of default.  Kaiser
is looking at other businesses with Enron and this could be quite fruitful to
tap into in order to increase trading liquidity going forward.

In summary, we need to answer at minimum the following:
? confirmation of which Kaiser entity is financial transacting with MG plc
? volatility of the metal positions that go out to Jan '04 to ensure how
quickly this out-of-the-money position can move
? what type of paper is confirming the swaps (whether long-form confirms or
Master ISDA)
? what credit/legal terms and laws may affect our efforts to establish a
Netting Agreement for UK and US financial

Can you help me in coordinating a meeting with London legal/credit and
Portland credit/Houston legal to discuss pertinent issues associated with a
Netting Agreement between Kaiser (single entity or multiple entities) and
Enron entities (MG plc and ENA) as soon as possible.  Please let me know your
thoughts to the above and who we need to contact to get the above points
addressed.  In Houston legal, Carol St. Clair is available to work on the
drafting of such a Netting Agreement and is speaking with Sara Shackleton
about the concept as well.

Please let me know as soon as possible your comments to the above and in
setting up a conference call to push this forward.

Thanks,
Tracy


Here is the file for Nov-00.  Call me with questions.


Attached is the Stagecoach LOI revised with my comments.  Please review and
let me know if you have any questions.


According to the scheduling sheet, deal#380414 is 400mw total.  This is a 50 mw deal.  25mw was booked out and 25 mw was physical under pwx tag.    Deal#381345 should be 600mw.

Hope this helps...

lisa
 -----Original Message-----
From: 	Thome, Jennifer
Sent:	Monday, June 24, 2002 2:05 PM
To:	Gang, Lisa
Subject:	BPA - Dec. 2001

Lisa:

Houston found another small dispute for Dec. 2001 with BPA.

Please see the attached.

In sum, based on BPA's figures, it looks like we doubled up by adding numbers from the 25th to numbers for the 26th (hence, doubling the 26th)
According to them:

12/26
Deal 381345 = 600 MW total (not 1200)
Deal 380414.1 = 200 MW total (not 400)

Please check the scheduling sheets and let me know if you agree.

Thanks!  Jenny

  << File: Dec. - BPA final dispute.xls >>


Attached is the draft for the December agenda. The scenarios and attendees
are a strong move in the direction of commodities, with less energy focus. I
think this might be the right direction to go in though. Let me know your
thoughts ASAP because we need to get moving on speakers.

Thanks, MSA


Montana Power Company and NorthWestern Corporation, EC01-47-000. Disposition
of Jurisdictional Facilities. Order issued February 20 accepting Montana
Power Co. and NorthWestern Corp.,s application for authorization of a
disposition of jurisdictional facilities whereby NorthWestern will purchase
Montana Power,s utility business in exchange for cash and the assumption of
debt. The transaction involves the purchase of all of Montana Power,s
regulated electric and natural gas utility facilities in Montana, as well as
certain subsidiaries of Montana Power. Requests for Rehearing due March 22.


This is to point out to you the approaching deadline for accepting ICE's
Offer for IPE Holdings.  If we wish to accept this Offer, we must do so no
later than 3 pm on Tuesday 29 May.

In the meantime, Michael has received calls from Richard Ward (IPE's CEO)
inquiring as to our position, and it would be my view that we should accept
the Offer. (Note that if ICE receives acceptances of 90% or more, then our
shares in IPE Holdings will in any event be mandatorily acquired.  And
assuming that such level of acceptances will be received, there is no reason
for not accepting the Offer).

Please would you let me know whether you wish to accept the Offer.  Ideally,
if we are to do so, I would plan to send the acceptance by close of business
on Friday 25 May.

Thanks
Justin


Frank,

Attached is a forwards detail of a Sithe deal from 1993.  It is an annuity
totalling $234MM.  Let me know if this is the deal you were looking for.

Thanks,

Errol, X5-8274


The attached letter was sent to the CPUC this afternoon, along with
documents which the Enron Entities had agreed to produce.

 <<38@RS01!.DOC>>

=======================================================
This email message is for the sole use of the intended recipient(s) and may
contain confidential and privileged information. Any unauthorized review,
use, disclosure or distribution is prohibited. If you are not the intended
recipient, please contact the sender by reply email and destroy all copies of
the original message.

To reply to our email administrator directly, send an email to
postmaster@brobeck.com
BROBECK PHLEGER & HARRISON LLP
http://www.brobeck.com

 - 38@RS01!.DOC


FYI

 -----Original Message-----
From:  "Keefer, Ken" <kkeefer@ajilon.com>@ENRON
[mailto:IMCEANOTES-+22Keefer+2C+20Ken+22+20+3Ckkeefer+40ajilon+2Ecom+3E+40ENRO
N@ENRON.com]
Sent: Monday, May  21, 2001 12:43 PM
To: Allario, John
Cc: Jones, Tana
Subject: RE: NDA for Agilon

The full legal name is "Ajilon LLC."

-----Original Message-----
From: John.Allario@enron.com [mailto:John.Allario@enron.com]
Sent: Monday, May 21, 2001 11:50 AM
To: kkeefer@ajilon.com
Cc: Tana.Jones@enron.com
Subject: RE: NDA for Agilon

Ken

What is Ajilon's full legal name? For instance, Ajilon Technoloigies
Company or Ajilon Corporation, etc.
The legal name is necessary for this document.

- Thanks

    -----Original Message-----
   From:   "Keefer, Ken" <kkeefer@ajilon.com>@ENRON

[mailto:IMCEANOTES-+22Keefer+2C+20Ken+22+20+3Ckkeefer+40ajilon+2Ecom+3E+40EN
RON@ENRON.com]

   Sent:   Monday, May  21, 2001 11:18 AM
   To:     Allario, John
   Subject:  RE: NDA for Agilon

   John,

   Is there any additional information regarding the NDA name change that
   would
   need to be provided beyond what has already been identified?

   Thanks,

   Ken

   -----Original Message-----
   From: John.Pavetto@enron.com [mailto:John.Pavetto@enron.com]
   Sent: Monday, May 21, 2001 10:59 AM
   To: kkeefer@ajilon.com
   Cc: John.Allario@enron.com
   Subject: RE: NDA for Agilon

   Please feel work John Allario.

   Regards

       -----Original Message-----
      From:   "Keefer, Ken" <kkeefer@ajilon.com>@ENRON

[mailto:IMCEANOTES-+22Keefer+2C+20Ken+22+20+3Ckkeefer+40ajilon+2Ecom+3E+40EN
   RON@ENRON.com]

      Sent:   Monday, May 21, 2001 10:52 AM
      To:     Pavetto, John
      Subject:  RE: NDA for Agilon

      We may have some confusion here as the company name should be:

      Ajilon LLC
      Attn:  Gary Preston

      I am unable to find any internal reference to a "Paul S. Galant" and
      Agilon
      Technologies is a different company.

      -----Original Message-----
      From: John.Pavetto@enron.com [mailto:John.Pavetto@enron.com]
      Sent: Monday, May 21, 2001 10:36 AM
      To: kkeefer@ajilon.com
      Subject: FW: NDA for Agilon

      -----Original Message-----
      From:     Allario, John
      Sent:     Monday, May 21, 2001 8:53 AM
      To:       Jones, Tana
      Cc:       Pavetto, John
      Subject:  NDA for Agilon

      Tana

      We would like an NDA for the following counterparty:

      Agilon Technologies, Inc.
      Attn:  Mr. Paul S. Galant
      14180 Dallas Parkway
      Dallas, TX  75240
      gpreston@agilon.com

      Nature of business - Enron Net Works L.L.C. is hoping to have Agilon
      perform Transaction Hub Service functions for EOL.  Agilon has
   software
      that would fit nicely on top of EOL and help our trading counterparts
      more
      easily download and create their own trading reports as a result of
      their
      transacting with EOL.

      Please email the NDA to me and you can send the hard copy out
   directly
      to
      Mr Galant.

      No know legal contact at Agilon yet.

      Muchas Gracias Herrin Jones!

      Johan

      John Allario
      Enron Net Works L.L.C.
      713-853-4587 (o)
      713-562-8684 (c)
      john.allario@enron.com


I have been wondering for the last couple of months if this is THE Heather
Evans that I was friends with for so long.  So, I am finally writing you an
email.  I know you don't recognize the last name, but, it's me - Tori
(Hatter).  I'd love to know what is going on in your life.  I was hoping
you'd make it to the reunion last year.  Anyway, if you get a chance, drop me
an email - let's catch up.


I am not sure, the Bahia Boys or Bahama Boys ?

Debra Perlingiere
Enron North America Corp.
Legal Department
1400 Smith Street, EB 3885
Houston, Texas 77002
dperlin@enron.com
Phone 713-853-7658
Fax  713-646-3490


Dan, Gulf/Keyspan have agreed to the two separate documents without a
specific contract number.

Please prepare and send up to me

There is one revision to the volumes, they are  11,740  and 8260     rather
than 11600 and 8400

Thanks

Grant

PS - have you read the assignment agreement and if so, do you anticipate any
issues?

Dan J Hyvl
03/20/2001 07:59 AM
To: Grant Oh/CAL/ECT@ECT
cc:
Subject: Re: crestar / gulf aos contract....

Grant,
 The problem is that they do not want to assign the agreement.  They want to
do a partial assignment which is unacceptable unless we can severe the
document so that we have two separate stand alone pieces of paper after the
assignment.  Talk to them about doing two Spot Confirmations, one for 0 to
8,400 MMBtu per day which would not be assignable, and the other one for 0 to
11,600 MMBtu per day which would be assignable to BP.  Call me so that we can
discuss.

	Grant Oh
	03/19/2001 05:16 PM

		 To: Dan J Hyvl/HOU/ECT@ECT
		 cc:
		 Subject: Re: crestar / gulf aos contract....

Keyspan/Crestar would like to execute the existing contract as is - and work
on the assignment ot BP separately.

Thanks

Grant

Dan J Hyvl
03/19/2001 04:17 PM
To: Grant Oh/CAL/ECT@ECT
cc:
Subject: Re: crestar / gulf aos contract....

I am waiting on your response to my voice mail regarding the assignment to
BP.  Shouldn't we break the confirm into two documents, covering 42% of the
entitlements to Crestar and 58% to BP.

	Grant Oh
	03/19/2001 01:33 PM

		 To: Dan J Hyvl/HOU/ECT@ECT
		 cc:
		 Subject: crestar / gulf aos contract....

Dan, following up on the status of the contract.

Thanks

Grant


Kate, can you please check price on following deal
Enron Sells to Aep     2/22/01
April 01
we have price of 114.00
ICE broker paper has price of 214.00

Thanks


---------------------- Forwarded by John Arnold/HOU/ECT on 12/27/2000 02:55
PM ---------------------------

Jim Schwieger
12/27/2000 02:49 PM
To: John Arnold/HOU/ECT@ECT
cc:
Subject: