Today, Enron hosted a conference call to give investors a current overview of the company. Here's an update of what we discussed during the call.

We told investors that we're doing everything we can to protect their interests and to regain their confidence. Our focus remains on our credit quality, balance sheet and liquidity, which are essential for our continued success and expansion of our wholesale businesses.

It took more than a few weeks to get where we are today. Here's a snapshot of significant events that led to our current situation:

-- In hindsight, we definitely made some very bad investments in our non-core businesses over the past several years. Those include investments in Azurix, India and Brazil. They have performed far worse that we could have ever imagined when we made these investments;

-- Because of these bad investments, we've become over-leveraged as a company. The negative impact of those investments was exacerbated through the extensive use of debt capital both on and off our balance sheet;

-- We also entered into related party transactions that led to a loss of investor confidence, which has been very damaging;

-- We've been criticized for our lack of transparency and our hard-to-understand financial and operating disclosures; and

-- On top of it all, we discovered errors in our financial statements, as discussed in our 8-K filing last week, that required a restatement of previously reported earnings.

We've taken a new look at our businesses and have separated them into three areas: core businesses, non-core businesses, and businesses under review.

Core Businesses

Our core businesses remain strong and consistent sources of significant earnings and cash flows for the company. They're our competitive advantage. These include:

-- Natural gas pipeline businesses;

-- Gas and power businesses in North America and Europe;

-- Retail businesses in North America and Europe; and

-- Coal businesses in North America and Europe.

The events of the past few weeks have had a temporary negative impact on our projected fourth quarter profitability. It's too early to tell at this time what impact this might have on our operating results. We are considering these actions now so that we can quickly return to normal business in 2002.

I also remain optimistic that the actions we've taken over the past couple of weeks have addressed our customer and counterparty credit and liquidity concerns. According to our business unit leaders, we have definitely seen improvement in our counterparty relationships.

Non-Core Businesses

Our non-core businesses include our global assets group and our broadband division. We have invested more than $8 billion in these businesses, and the return from them has been dismal.

We have an aggressive program in place to exit these businesses and expect that the sale of these businesses will generate billions of dollars in cash that we can use to repay debt and reinvest in our core businesses. We already have more than $800 million in assets contracted for sale this year. They include CEG Rio, a gas LDC in Brazil; EcoElectrica, a power plant and LNG receiving terminal in Puerto Rico; and asset sales of offshore oil and gas properties in India. The approximately $2.9 billion Portland General sale is also on target to close in late 2002 pending regulatory approvals.

Businesses Under Review

These businesses are comprised of those operations outside our power and gas wholesale businesses and include global and industrial markets. While several of these businesses have very strong future prospects, we need to determine if their capital requirements and near-term growth prospects are sufficient enough in terms of earnings and cash generation.

Reviewing our businesses this way will help determine where we need to make reductions to our work force. More information will follow as soon as it becomes available.

Credit Rating/10-Q Filing

We continue to meet regularly with credit rating agencies and believe that our liquidity enhancements and scheduled asset sales will strengthen our balance sheet and maintain our investment grade credit rating. Our current credit ratings by the three major rating agencies are as follows:

-- Moody's at Baa3       "Under Review for Further Downgrade"

-- Fitch at BBB-             "Evolving Status"

-- S&P at BBB-              "CreditWatch Negative"

We also discussed our existing financial vehicles, including Osprey, Marlin and Yosemite, in further detail. We told investors that we will file our 10-Q five days late due to our current activities. It will be filed on Nov. 19.

We will continue to have updates with investors over the coming weeks as well as our frequent updates with you. The full transcript of our conference call will be filed with the Securities and Exchange Commission in the next few days. It will also be posted on our web site at www.enron.com/corp/investors under "SEC Filings."

In connection with the proposed transactions, Dynegy and Enron will file a joint proxy statement/prospectus with the Securities and Exchange Commission. Investors and security holders are urged to carefully read the joint proxy statement/prospectus regarding the proposed transactions when it becomes available, because it will contain important information. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus (when it is available) and other documents containing information about Dynegy and Enron, without charge, at the SEC's web site at www.sec.gov. Copies of the joint proxy statement/prospectus and the SEC filings that will be incorporated by reference in the joint proxy statement/prospectus may also be obtained for free by directing a request to either: Investor Relations, Dynegy Inc., 1000 Louisiana, Suite 5800, Houston, TX 77002, Phone: (713) 507-6466, Fax: (713) 767-6652; or Investor Relations, Enron Corp., Enron Building, 1400 Smith Street, Houston, TX 77002, Phone: (713) 853-3956, Fax: (713) 646-3302.

In addition, the identity of the persons who, under SEC rules, may be considered "participants in the solicitation" of Dynegy and Enron shareholders in connection with the proposed transactions, and any description of their direct or indirect interests, by security holdings or otherwise, are available in an SEC filing under Schedule 14A made by each of Dynegy and Enron.


Notice No. 01-68
February 28, 2001

TO:
All Exchange Members and Member Firms

FROM:
Neal L. Wolkoff, Executive Vice President

RE:
Implementation of Amendments to Exchange Disciplinary Rules to Permit
Restitution in Certain Cases
____________________________________________________________

Included below please find amendments that become effective today to NYMEX
Rules 8.03 (&Settlements8); 8.08 (&Settlement by the Adjudication
Committee8); 8.11 (&Decision8) and 8.55 (&Classification of Offenses8).  In
general, these rule amendments provide Exchange disciplinary committees,
including both NYMEX and COMEX Division disciplinary committees, with
explicit authority to include restitution as a sanction in a disciplinary
matter where quantifiable customer harm has resulted from a rule violation.

If you have any questions, please contact Nancy Minett, Compliance Counsel,
Compliance Department, at (212) 299-2940.

* * * *

[Asterisks indicate additions; brackets indicate deletions.]

Rule 8.03.  SETTLEMENTS

(A) When the Compliance Department concludes that a Rule violation has
occurred, and at any time prior to the submission of an Investigative Report
to the Business Conduct Committee, the Compliance Department may negotiate
with the Respondent and enter into a written Offer of Settlement with the
Respondent.  The Respondent may agree, without admitting or denying a Rule
violation, to an Offer of Settlement which may provide for a cease and desist
order, a censure,     ** an order directing restitution to any injured
person, ** and a fine of not more than $5,000 for each Rule violation
alleged, or any combination of such penalties.  Any such settlement is
subject to the approval of the Business Conduct Committee.

[Sections (B) and (C) remain unchanged.]

(D) Any Offer of Settlement agreed to under Sub-Sections (B) or (C) of this
Rule may provide for a cease and desist order, a censure, ** an order
directing restitution to any injured person,** a fine not to exceed $25,000
for each Rule violation alleged, an expulsion or suspension from all or some
rights and privileges of membership, the ability to hold a permit, Electronic
Trading Privileges, employment on the Exchange Floor or employment for the
purpose of entering orders on NYMEX ACCESS for a period not to exceed three
(3) months for each Rule violation alleged, or any combination of such
penalties.

[Section (E) remains unchanged.]

Rule 8.08. SETTLEMENT BY THE ADJUDICATION COMMITTEE

(A) If the Respondent wishes to settle a matter at any time after the filing
of the complaint with the Chairman of the Adjudication Committee, the
Respondent may submit a written settlement offer.  The settlement offer will
be directed to the NYMEX Division Hearing Panel or the COMEX Division Hearing
Panel, as applicable, that has not been assigned the case to hear and
decide.  The Compliance Department may recommend to that Hearing Panel an
approval or a rejection of any settlement offer.  Such offer may provide for
the issuance of a cease and desist order, a censure, ** an order directing
restitution to any injured person, ** a fine not to exceed $250,000 for each
violation alleged to have been committed, an expulsion or suspension from all
or some rights and privileges of membership, the ability to hold a permit,
electronic trading privileges, employment on the Exchange Floor, or
employment for the purposes of entering orders on NYMEX ACCESS or any
combination of such pen!
al!
ties.

[The remainder of the Rule remains unchanged.}

Rule 8.11 DECISION

[Sections (A) through (J) remain unchanged.]

(K) If the Hearing Panel determines to order the imposition of a penalty, the
penalties which may be imposed are any one or combination of the following:
the issuance of a cease and desist order, a censure, ** an order directing
restitution to any injured person, ** a fine of not more than $250,000 for
each Rule violation found to have been committed, an expulsion or a
suspension from all or some rights and privileges of membership, the ability
to hold a permit, Electronic Trading Privileges, employment on the Exchange
Floor, or employment for the purposes of entering orders on NYMEX ACCESS.

[The remainder of the Rule remains unchanged.]

Rule 8.55. CLASSIFICATION OF OFFENSES

Offenses against the Exchange shall be classified as major offenses and minor
offenses.  Major offenses shall be punishable by **one or more of the
following:** expulsion, suspension **from all or some rights and privileges
of membership, the ability to hold a permit, Electronic Trading Privileges,
employment on the Exchange Floor, or employment for the purposes of entering
orders on NYMEX ACCESS,** a fine of not more than $250,000, **cease and
desist order, or an order directing restitution to any injured person.**
[or by both suspension and fine].  Minor offenses shall be punishable by
**one or more of the following:** a fine of no more than $10,000  **cease and
desist order, order directing restitution to any injured person** or
suspension for not more than one year ** from all or some rights and
privileges of membership, the ability to hold a permit, Electronic Trading
Privileges, employment on the Exchange Floor, **or employment for the
purposes of entering orders on !
NY!
MEX** ACCESS ** [; or both].  Unless good cause is shown, any offense
involving fraudulent or deceitful trading practices detrimental to a customer,
s order shall be a Major Offense and shall be punishable, at a minimum, with
a suspension or revocation of the Member,s or NYMEX ACCESS Operator,s right
to execute customer orders.

[The remainder of the rule remains the same.}

__________________________________________________
Please click on the link below to indicate you have received this
email.

"http://208.206.41.61/email/email_log.cfm?useremail=tana.jones@enron.com&refdo
c=(01-68)"

Note: If you click on the above line and nothing happens, please copy
the text between the quotes, open your internet browser,
paste it into the web site address and press Return.


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

------------------------------------------------------------------------------
-----------------------------------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

On the Wednesday before Inauguration Day, Gene Sperling, Mr. Clinton's top
economic adviser, and his Bush counterpart, Lawrence Lindsey, sat down for a
final discussion in a second-floor office at the White House. They agreed to
one last Clinton order that would reach, by three days, into the Bush term.
The goal was to give the Bush team some breathing room.

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

On Inauguration Day, Mr. Bush received a congratulatory call from California
Gov. Gray Davis, who had stayed in Sacramento because of the crisis. In that
call, Davis aides say, the Democratic governor made his first direct pitch to
Mr. Bush for an extension of the Clinton executive order forcing energy sales
to California utilities. While the two men diverge politically, they had
worked together on issues affecting border states. Last June, Mr. Bush was
one of three U.S. governors who joined six Mexican governors at a dinner
hosted by Mr. Davis in Sacramento's Crocker Art Museum. Their shared
experiences as state leaders made Mr. Bush sympathetic to Mr. Davis's request
for extra time to get a recovery bill through the state legislature.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Generators Fear They Won't Recover Investment

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

Generators thought the DWR was covering the state's entire "net short"
electricity needs in recent weeks. But last week, the agency said it has not
been paying for power it deemed unreasonably priced. That means the bills got
passed to the state's two investor-owned utilities, which haven't paid their
power bills in weeks due to cash and credit problems.

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

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

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

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

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

ISO Peaker Program Also In Jeopardy

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

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

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

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

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

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

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

Developments in California's electricity crisis
By The Associated Press

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

A look at developments in California's electricity crisis:

THURSDAY:

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

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

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

- The state Public Utilities Commission extends an order to help PG&E supply
its customers with natural gas. The PUC votes unanimously to let the utility
use its revenue to pay off natural gas bills first for at least 90 more days.

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

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

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

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

- Assemblyman John Dutra, D-Fremont, proposes legislation that would make oil
refineries, pipelines and fuel production plants among the last hit if there
are rolling blackouts.

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

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

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

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

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

WHAT'S NEXT:

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

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

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

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

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

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

THE PROBLEM:

- High wholesale power costs, high demand, transmission glitches and a tight
supply worsened by scarce hydroelectric power in the Northwest and
maintenance at aging California power plants are all factors in California's
power crisis.

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

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

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

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

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

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

It is a goal that Chretien embraces but that presents Fox with big practical
and constitutional problems.

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

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

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

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

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

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

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

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

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

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

But the California experience has changed attitudes everywhere. Energy
analyst Lawrence Makovich of Cambridge Energy Research Associates in
Cambridge, Mass., has been traveling the globe urging anxious governments not
to turn their backs on energy deregulation because of California's failed
deregulation scheme.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Petrobras, Repsol-controlled Petrolera Andina SA and France's TotalFinaElf SA
plan to build the 420-kilometer (260 miles) pipeline to link gas reserves at
Bolivia's San Antonio and San Alberto fields to the $2 billion,
Petrobras-controlled GasBol pipeline that carries the gas to Brazil's most
industrialized regions. Construction will take about 20 months, Valor said.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MSEB chairperson Vinay Bansal has assured honest officials that they will not
be penalised in any way in their drive against power thefts and defaulters.

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

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

Indian Trade Unions Urge Government to Take Over Enron Project

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

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

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

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

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

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

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

(PTI) 16-02 2122

India: Enough is enough for Enron Corp?

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

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

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

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

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

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

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

Kripa Raman

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

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

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

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

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

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

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

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

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

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

Friday, February 16, 2001

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

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

The confrontation was prompted by increases last year in the price of power
from the Enron plant, which was begun in 1995 amid a backlash of nationalist
sentiment against the big outside investor. The state government called in
December for Enron's entire $3 billion, 2,184-megawatt project in Dabhol to
be renegotiated for a second time and stopped paying its bills.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

AES had purchased some old generating plants, some built as far back as 1949,
which they thought would be used as back-up.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

,2001 Associated Press

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

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

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

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

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

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

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

Generators are balking at the state's request to continue selling some power
to the California  Independent System Operator, which runs the state power
grid, Mirant Chief Financial Officer Raymond Hill said in an interview. ``The
real issue is whether generators will have to sell to an uncreditworthy
buyer,'' he said.

The state had proposed establishing the Department of Water Resources as its
buying agent.

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

Mirant, previously called Southern Energy Inc., is based in Atlanta. It's the
power-plant development and energy-trading arm of Southern Co., the largest
U.S. power producer and owner of Atlanta's electric utility.

                                 Dynegy

``I don't believe that (utility) bankruptcy is in the cards still,'' Dynegy
President Stephen Bergstrom said.

Dynegy, based in Houston, is a U.S. electricity and natural-gas trader.

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

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

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

                               Legislation

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

``I thought back in January surely it would be resolved by February, and now
in February, I think, surely it will be resolved by March,'' Enron Corp.
Chairman Ken Lay said. Houston-based Enron is the world's biggest energy
trader.

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

Shares of Calpine fell $1.01 to $45.99. Rosemead, California-based Edison
rose 6 cents to $12.31, and San Francisco-based PG&E rose 34 cents to $12.84.
Enron fell $2.10 to $77.90, Charlotte-based Duke fell $1 to $40.10, and
Dynegy rose 78 cents to $52.01. Mirant fell 5 cents to $25.60.

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

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

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

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

The site carries an emotional call &for transparency, for accountability, for
that lost promise called a democracy8. And as the name suggests, it has
extensive information on the chronology of events, legal suits filed in the
past and, most interestingly, a section that suggests &a way out8 from the
current mess that Maharashtra and the central government find themselves in.
The crux of the NRIs' argument: scrap the project, as according to their
estimates, Maharashtra will end up paying a whopping $30 billion (Rs 1,40,000
crore) to Dabhol Power Company (DPC).

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

&Indeed a court case to this effect, filed by Prayas, an NGO, has been
rejected by the Maharashtra High Court; an appeal against this dismissal
(filed by CITU and A. Mehta) is pending before the Supreme Court8, says the
group.

Explaining the background of the imbroglio, the NRIs' group says that under
the laws in force when the PPA was signed, the agreement required mandatory
economic and technical clearance from a statutory body (the Central
Electricity Authority * CEA) constituted for this very purpose. The group
says that the CEA did issue a technical clearance to the DPC power plant,
but, explicitly refused to issue the economic clearance. Instead, the
regulatory body observed that the economic issues had been looked into by the
Ministry of Finance, which found them satisfactory.

The website further claims that petitioners in this court case have contended
that the DPC deal never received the mandatory economic CEA clearance. &A
mandatory CEA clearance was the legal safeguard against signing PPAs at
exorbitant rates. As this clearance was never received, the petitioners
conclude that the Dabhol PPA has no force in law8. The group believes that
this argument is persuasive, and has hoped that the Supreme Court will as
well. And, the NRIs are putting their money in what they believe is the
truth. A week ago they ran an advertisement in an Indian daily on the
controversy. Headlined &each of you owes Rs 4 lakh to Enron8, the insert
claims that the Maharashtra government has been unable to pay DPC Rs 1.59
billion. But, it has entered into a contract which obligates it to pay Rs 4
trillion over the next 20 years.

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

Juicy tidbits from www.altindia.net/enron:

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

Williams' EnergyNewsLive.com Features Top Energy Newsmakers

2/15/1 FROM PR NEWSWIRE DALLAS  888-776-3971/
TO BUSINESS AND ENERGY EDITORS:

Williams' EnergyNewsLive.com Features Top Energy Newsmakers

OPEC President, U.S. Senate Energy Committee Chairman, Industry CEOs Among
Those Interviewed

HOUSTON, Feb. 15 /PRNewswire/ -- Williams' EnergyNewsLive.com, the world's
only real-time energy news and information network, this week has featured
live interviews with newsmakers ranging from the president of OPEC to
chairmen
of the U.S. Senate Energy Committee, the California Independent System
Operator, Williams and Enron during its coverage of events during Cambridge
Energy Research Associates' CERA Week 2001 conference here.

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

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

Among newsmakers EnergyNewsLive.com has interviewed this week are:

    --  Chakib Khelil, president, OPEC
    --  Sen. Frank Murkowski, chairman, U.S. Senate Energy Committee
    --  Gerald Doucet, secretary general, World Energy Council
    --  James Hoecker, former chairman, Federal Energy Regulatory Commission
    --  Keith Bailey, president and CEO, Williams
    --  Daniel Yergin, chairman, Cambridge Energy Research Associates
    --  Jeff Skilling, president and CEO, Enron
    --  Robert Mosbacher, former U.S. Secretary of Energy
    --  Terry Winter, president, California Independent System Operator
    --  Mikhail Khodorkovsky, CEO, Yukos Oil Company
    --  Tony Knowles, governor, Alaska
    --  Steve Malcolm, president -- Energy Services, Williams
    --  Alberto Calderon Zuleta, president, ECOPETROL (Columbian Petroleum
        Company)
    --  Steve Letbetter, chairman, president and CEO, Reliant Energy
    --  Ria Kemper, secretary general, The Energy Charter Secretariat
    --  Jeroen van der Veer, managing director, Royal Dutch Petroleum
Company,
        and group managing director, Royal Dutch/Shell Group
    --  Richard Bilas, commissioner, California Public Utilities Commission
    --  Joseph Stanislaw president, Cambridge Energy Research Associates
    --  David Lemmon, president and CEO, Colonial Pipeline Company.

Many of the EnergyNewsLive.com programs are available for replay in the
site's video library.

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

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

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

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

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

EnergyNewsLive.com is powered and distributed by Williams end-to-end.
Through its Vyvx Broadband Media offering, Williams Communications (NYSE:
WCG)
provides transmission and distribution services.

/CONTACT:  Kerry Malone of Williams, 918-573-2110,
orkerry.malone@williams.com;
or Lisa DeMatteo of Mercury Group, 703-299-9470, orlisa-dematteo@mail.am.com,
for Williams/

Electric Deregulation Trial Run Begins
By DAVID KOENIG
AP Business Writer

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

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

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

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

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

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

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

Most analysts expect the utilities will be most aggressive in courting large
business customers.

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

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

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

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

To help confused customers sort through the implications of deregulation,
which was approved by the Legislature in 1999, the PUC hired the
Burson-Marsteller public relations firm to explain the arcana of deregulation
on a special Web site called Texas Electric Choice.
---
On the Net:
Texas Electric Choice site: www.powertochoose.org


Several Enron Bowling Association members  were unable to participate in the Special Olympics Bowl-A-Thon on Saturday November 17, 2001.  Your support is imporant to the success of the atheletes.

The purpose of the Bowl-A-Thon was to raise funds for the Atheletes with Mental Retardation to compete in year-round sports and  training that will enable them to develop not only physically but emotionally and socially.

Dennis Lee has received 100 T-shirts (sizes ranging from L to XXXL) to sell for a $25 donation to continue raising funds for Special Olympics.  We are asking each EBA member to sell  3 to 5 shirts.

Please pick up T-Shirts from Dennis Lee   EB3982   ext. 31715

We appreciate your support especially during these uncertain times.

Thank You In Advance
Celestine Hollan
chollan@enron.com <mailto:chollan@enron.com>
713-853-3863


i still owe you $30 right?


<<2SX803!.DOC>>  <<2T2902!.DOC>>  <<2T2B02!.DOC>>  <<2SX8RED.DOC>>
<<2T29RED.DOC>>  <<2T2BRED.DOC>>

We have enclosed clean and blacklined copies (marked to reflect revisions
from the drafts circulated 01/04/2001) of the following documents:

1.  Amendment No. 1 to Letter Agreement for CA Energy Development I;
2.  Amendment No. 1 to Letter Agreement for CA Energy Development II -
Turbine; and
3.  Amendment No. 1 to Letter Agreement for CA Energy Development II -
Transformer.

The clean copies are ready for execution.  If the enclosed documents are
acceptable, please secure execution of four originals in order that we may
coordinate an exchange of fully executed counterparts.  In addition, we
should simultaneously exchange fully executed counterparts of the escrow
agreements and the fee schedule letter.  If you have any questions or
comments. please advise at your earliest convenience.  Thank you.

Carolyn M. Campbell
King & Spalding
713-276-7307 (phone)
713-751-3280 (fax)
ccampbell@kslaw.com <mailto:ccampbell@kslaw.com>

Enclosures: 130796v3
  130977v2
  130979v2
  130796vR3/2
  130977vR2/1
  130979vR2/1

                    Confidentiality Notice
This message is being sent by or on behalf of a lawyer.  It is intended
exclusively for the individual or entity to which it is addressed.  This
communication may contain information that is proprietary, privileged or
confidential or otherwise legally exempt from disclosure.  If you are not the
named addressee, you are not authorized to read, print, retain, copy or
disseminate this message or any part of it.  If you have received this
message in error, please notify the sender immediately by e-mail and delete
all copies of the message.

 - 2SX803!.DOC
 - 2T2902!.DOC
 - 2T2B02!.DOC
 - 2SX8RED.DOC
 - 2T29RED.DOC
 - 2T2BRED.DOC


I am unable to get into the board.

Thanks,

Eric

Ina Rangel
01/19/2001 08:45 AM
To: Andrea Ring/HOU/ECT@ECT, Andrew H Lewis/HOU/ECT@ECT, Brad
McKay/HOU/ECT@ECT, Craig Breslau/HOU/ECT@ECT, Chris Germany/HOU/ECT@ECT,
Carey M Metz/HOU/ECT@ECT, Charles T Muzzy/HOU/ECT@ECT, Daren J
Farmer/HOU/ECT@ECT, Dick Jenkins/HOU/ECT@ECT, Dan Junek/HOU/ECT@ECT, Dutch
Quigley/HOU/ECT@ECT, Eric Bass/HOU/ECT@ECT, Edward D Gottlob/HOU/ECT@ECT,
Elsa Villarreal/HOU/ECT@ECT, Frank Ermis/HOU/ECT@ECT, George N
Gilbert/HOU/ECT@ECT, Gary W Lamphier/HOU/ECT@ECT, Geoff Storey/HOU/ECT@ECT,
Hunter S Shively/HOU/ECT@ECT, John Arnold/HOU/ECT@ECT, Jared
Kaiser/HOU/ECT@ECT, Jay Reitmeyer/HOU/ECT@ECT, Jim Schwieger/HOU/ECT@ECT,
Jennifer Shipos/HOU/ECT@ECT, John Craig Taylor/HOU/ECT@ECT, Jane M
Tholt/HOU/ECT@ECT, Judy Townsend/HOU/ECT@ECT, Janet H Wallis/HOU/ECT@ECT,
Jason Williams/HOU/ECT@ECT, Kate Fraser/HOU/ECT@ECT, Kevin
Ruscitti/HOU/ECT@ECT, Kelli Stevens/HOU/ECT@ECT, Lauri A Allen/HOU/ECT@ECT,
Martin Cuilla/HOU/ECT@ECT, Mike Grigsby/HOU/ECT@ECT, Monique
Sanchez/HOU/ECT@ECT, Phillip K Allen/HOU/ECT@ECT, Peter F Keavey/HOU/ECT@ECT,
Patrice L Mims/HOU/ECT@ECT, Robin Barbe/HOU/ECT@ECT, Sandra F
Brawner/HOU/ECT@ECT, Scott Hendrickson/HOU/ECT@ECT, Sarah
Mulholland/HOU/ECT@ECT, Jennifer Fraser/HOU/ECT@ECT, Scott Neal/HOU/ECT@ECT,
Stacey Neuweiler/HOU/ECT@ECT, Susan W Pereira/HOU/ECT@ECT, Sylvia S
Pollan/HOU/ECT@ECT, Steven P South/HOU/ECT@ECT, Tom Donohoe/HOU/ECT@ECT, Tori
Kuykendall/HOU/ECT@ECT, Thomas A Martin/HOU/ECT@ECT, Victoria
Versen/HOU/ECT@ECT, Barry Tycholiz/NA/Enron@ENRON, Caroline
Abramo/Corp/Enron@Enron, Danny Conner/NA/Enron@Enron, Bill
Berkeland/Corp/Enron@Enron, Joe Parks/Corp/Enron@ENRON, Kevin
Brady/NA/Enron@Enron, Liz Bellamy/NA/Enron@Enron, Larry May/Corp/Enron@Enron,
Mark Smith/Corp/Enron@Enron, Mike Maggi/Corp/Enron@Enron, Nelson
Ferries/Corp/Enron@ENRON, Paul T Lucci/NA/Enron@Enron, Robyn
Zivic/NA/Enron@Enron, Scott Goodell/Corp/Enron@ENRON, Troy
Black/Corp/Enron@ENRON, Tammi DePaolis/Corp/Enron@ENRON, Sean
Boyle/Corp/Enron@ENRON, Fangming Zhu/Corp/Enron@ENRON, Allen
Elliott/HOU/ECT@ECT, Michael Sellers/LON/ECT@ECT, Deirdre
McCaffrey/HOU/ECT@ECT, Kirk Lenart/HOU/ECT@ECT, Bryan Powell/HOU/ECT
cc:
Subject: Please respond

If you can not get into the gas messaging board, please let me know this
morning so I can get the problem corrected.

Thank You,
Ina


There would have been more of these if I could just learn to keep my fingers
out from in front of the lens......