The State Power Regulators to Determine State Refunds Energy: Generators and
California officials will work together for 15 days to solve the huge
mathematical problem.
Los Angeles Times, 06/25/01

THE ENERGY CRUNCH / $9 billion showdown over power / State delegation seeking
refunds
The San Francisco Chronicle, 06/25/01

California Power Suppliers May Have to Refund Billions.
The Oil Daily, 06/25/01

Californians Get Rude to Enron Executives.
The Oil Daily, 06/25/01

Power Plays: Beaten-down energy stocks look attractive
Barron's, 06/25/01

SURVEY - POLAND - Why overseas energy investors are failing to generate high
returns.
Financial Times, 06/25/01

India: L&T seeks 51 pc stake in Vijaynagar power project
Business Line (The Hindu), 06/25/01

Rolls charged up on power generation
The Economic Times, 06/25/01

California; Metro Desk
The State Power Regulators to Determine State Refunds Energy: Generators and
California officials will work together for 15 days to solve the huge
mathematical problem.
MEGAN GARVEY
TIMES STAFF WRITER

06/25/2001
Los Angeles Times
Home Edition
B-7
Copyright 2001 / The Times Mirror Company

WASHINGTON -- Starting today, federal power regulators will begin trying to
solve one of the riddles of the energy crisis: How much of a refund will
California get?
One thing seems clear: The reduction will be a lot more than the $125-million
refund ordered to date, in all likelihood soaring to more than $1 billion.
Over the next 15 days--the Federal Energy Regulatory Commission is mandating
no weekends off--warring representatives from power companies and the state
of California will sit at the same table in a government conference room
while a FERC task force wrestles the question to the ground.
The task is to determine the price that power would have cost if FERC's
decision to impose soft caps had been made not last week, but last fall.
It is a daunting mathematical problem, factoring in hourly charges during the
last eight months. To come up with a total, federal regulators, state
electricity officials and power generators must determine what the highest
price for a megawatt should have been under the soft price caps now in
effect. Then they have to figure out which companies--if any--were charging
more.
Under the recent FERC ruling, the price of electricity during any given hour
cannot exceed the actual cost of generating the least efficient--or most
expensive--power coming into the grid.
Curtis L. Wagner, the 72-year-old chief judge for FERC who is overseeing
negotiations on California's overcharges, said of this morning's events: "It
will be a zoo."
Wagner, who headed into the weekend with three inches of documents to sort
through, explained that Gov. Gray Davis wants $9 billion knocked off the
amount the power generators charged California. "I don't really think it's
that high," said Wagner, predicting the refund will be more than $1 billion
but probably far from $9 billion.
"We have folks trying to do some adding now and some work on what the number
should be," he said.
Wagner said the money at stake will be the most he has worked on in his
nearly three-decade career at the agency.
Until recently, the likelihood of massive refunds seemed nil. Although
California lawmakers--led by Davis--had demanded relief for costs that ran as
high as 10 times or more than the rates a year ago, FERC officials had not
agreed.
And their minds seemed set. When FERC first proposed remedies for the
California price increases late last year, commissioners said: "Refunds may
be an inferior remedy from a market perspective and not the fundamental
solution to any problems occurring in California markets."
To date, FERC has ordered $125 million in refunds for alleged overcharges in
January and February.
But with the recent appointment of two new commissioners by President
Bush--Republicans Patrick H. Wood III of Texas and Nora M. Brownell of
Pennsylvania--FERC's position softened, leading to the price mitigation
ordered last week.
Now FERC is taking a closer look at the prices already charged.
California lawmakers have pegged overcharges at nearly $9 billion since the
California market went haywire last summer--a number that comes from a study
done by Cal-ISO, the operator of California's electricity grid. Cal-ISO
officials acknowledged last week that the study might have significant flaws.
Among companies that may be required to reduce their bills are energy giants
Enron Corp., Mirant Corp., Duke Energy Corp., Williams Cos. and Reliant
Energy Inc.--all of which are expected to have representatives at the
negotiations. The companies have hotly disputed the amount of overcharges
alleged by Davis and other California lawmakers and point out that they have
yet to be paid for the vast majority of electricity sold in the state in
recent months.
Today, Wagner said he plans to make opening statements to the media. After
that, he said he hasn't determined how much of the wangling will be done
behind closed doors. If the parties don't come to an agreement in 15 days,
Wagner will have seven days to make a recommendation on refunds to FERC's
five commissioners.
It is a process that may be repeated down the road if Sen. Barbara Boxer
(D-Calif.) and other California politicians get their way. Boxer has
introduced legislation that would give FERC retroactive power to order
refunds--all the way back to July 2000, when San Diego first faced huge
spikes in electricity costs.

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

NEWS
THE ENERGY CRUNCH / $9 billion showdown over power / State delegation seeking
refunds
Lynda Gledhill, Christian Berthelsen
Chronicle Staff Writers

06/25/2001
The San Francisco Chronicle
FINAL
A.1
(Copyright 2001)

A critical showdown in California's energy crisis starts this morning, as
state officials meet with energy companies to demand $9 billion in refunds.
A 15-day settlement conference, ordered as part of the Federal Energy
Regulatory Commission's decision last week to put price controls on wholesale
electricity prices, will bring together the parties that have been squabbling
for the past year.
"We are going to Washington with one goal, and that is to bring back $9
billion," Gov. Gray Davis told reporters yesterday. "The fact is that people
have taken advantage of the market, gamed the system and ripped people off."
But Davis' crusade may be dampened by challenges to the study the state used
to arrive at the $9 billion figure and by a FERC mediator's prediction that
California will walk away with less than it is demanding.
The Democratic governor's figure is based on an update of a March study by
the California Independent System Operator, which manages the sate's power
grid. Some energy experts argue the study is flawed, but the ISO stood firm
behind its methodology yesterday.
Curtis L. Wagner Jr., the FERC administrative law judge who will oversee the
meeting, said in an interview with The Chronicle yesterday that he was
optimistic a settlement would be reached.
Wagner said the $9 billion "seems a little high. And the generators' numbers
seem low. We'll probably come out somewhere in between."
The veteran mediator, who spent yesterday reviewing spreadsheets submitted by
the parties, said he will look at applying last week's commission price
control order back to October.
"I think we should put the refund issue to rest," Wagner said. "I'm sure we
can agree on a structure that is fair to everybody." Enron Corp, Reliant
Energy Inc., Duke Energy Corp., Williams Cos., Dynegy Inc. and Mirant Corp.
are among the companies facing allegations of illegally overcharging
California. The companies say the high prices were a result of the high costs
of natural gas used to generate power.
"There has been no evidence to suggest that suppliers bilked anyone," said
Mark Stultz, a vice president of the Electric Power Supply Association, which
represent the generators.
But Davis insisted that the state will recover the full amount it is asking.
"Under the law, FERC has no discretion," he said. "It is mandated to refund
excessive charges, if prices were found to be unjust and unreasonable, which
they were."
The governor, however, acknowledged that some of the money he is demanding
may be owed by municipal utilities that do not fall under FERC's
jurisdiction.
Davis adviser Nancy McFadden said municipal utilities such as Los Angeles
Department of Water and Power and BC Hydro that sold electricity to the state
have been invited to join the talks as well.
"We need the FERC to lay the basis to seek refunds from private generators,
and use that as a basis to seek refunds from public generators," she said.
California could face an obstacle in its case for the full repayment it
seeks. Under FERC rules, overcharges can only be authorized after a formal
investigation is ordered, which in this case started on Oct. 2, 2000. If
Wagner sticks to that time frame, it eliminates the summer 2000 months when
prices first began to spike.
"There is no question we can order refund from that (October) date forward,"
Wagner said. "Legally, there may be some question before that date."
But Wagner said a FERC regulations may not necessarily rule out broader
refunds. "That's the great thing about a settlement -- you can do anything,"
he said.
If no settlement is reached in 15 days, Wagner will forward his
recommendations to the full commission for its approval. California will then
have the option of pursuing the matter further in court.
California's delegation will be led by Michael Kahn, a San Francisco lawyer
who chairs the ISO.
Davis also meets today in Sacramento with new FERC Commissioners Patrick Wood
and Nora Brownell to discuss the refunds and the high cost of natural gas in
the state.
Wood, who is expected to be named chairman of the commission in the fall, has
expressed his support for finding solutions to California's power woes.

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

California Power Suppliers May Have to Refund Billions.

06/25/2001
The Oil Daily
(c) 2001 Energy Intelligence Group. All rights reserved.

Power marketers providing electricity in California may have to refund
several billion dollars to customers to compensate for overcharging, a
Federal Energy Regulatory Commission (FERC) administrative law judge said
Friday.
The potential refunds, however, will be no where near the $9 billion claimed
by California Gov. Gray Davis, Judge Curtis Wagner said. Wagner is to oversee
hearings on the alleged overcharges that begin Monday in Washington, D.C.
Industry sources have expected such action from federal regulators, who
already have acknowledged that the power suppliers had overcharged by several
hundred million dollars.
One issue that may complicate the matter is the amount of money that the same
power providers are owed by California utilities for electricity they
supplied, but for which they have not been paid.
The California governor last week said that power generators and marketers
including Duke Energy, Dynegy, Enron, Reliant Energy, Mirant, and Williams
Cos. may be due $2.5 billion just by Pacific Gas and Electric, which is in
bankruptcy. This does not include funds owed by Southern California Edison or
San Diego Gas & Electric.
Wagner's comments were not released until after the close of the New York
Stock Exchange on Friday. The shares of the natural gas and electricity
trading companies have been battered in recent weeks, in part because of
fears they would be required to make refunds.
(c) Copyright 2001. The Oil Daily Co.
For more infomation, call 800-999-2718 (in U.S.) or
202-662-0700 (outside U.S.).

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

Californians Get Rude to Enron Executives.

06/25/2001
The Oil Daily
(c) 2001 Energy Intelligence Group. All rights reserved.

Californians are being downright rude to Enron executives these days.
First, California Attorney General Bill Lockyer suggested that Enron Chairman
Kenneth Lay ought to be forced to spend some time in a prison cell with a
tattooed character named Spike who was looking for "companionship."
Thursday, an angry electricity consumer threw a cream pie in the face of
President and Chief Executive Jeffrey Skilling as he was preparing to address
a civic and business group in San Francisco.
According to wire service reports, the pie thrower was a woman from the
Biotic Baking Brigade, an organization that makes a practice of "creaming"
controversial figures. Past recipients include Microsoft Chairman Bill Gates
and San Francisco Mayor Willie Brown.
Skilling went ahead with his speech to the Commonwealth Club of California,
telling them that Gov. Gray Davis was not responsible for the current crisis
because he had inherited the regulatory morass from the prior administration.
Davis was elected in 2000, succeeding Republican Pete Wilson.
Skilling, an ardent Republican, couldn't let the Democratic governor escape
without some criticism. He said that Davis had exacerbated the problem by not
addressing it promptly when the first signs appeared last year.
Enron Vice President Karen Denne said that company executives anticipated
some sort of demonstration by disgruntled electricity consumers. "Obviously,
this is a very emotional issue," she said. "There was risk in our coming to
the state, but we feel strongly enough about the issue that we felt it was
important to talk about the situation and what could be done to fix the
problem."
Denne maintains that listeners received Skilling's remarks favorably. "They
did seem to be receptive to the message," she said.
Wall Street also has been rather impolite to Enron of late. The company's
common stock continues to take hits, last week falling to a 52-week low of
$42.35. This is less than half the year's high of $90.75, reached in August.
Friday it was trading at around that same level.
The most recent decline came after the Federal Energy Regulatory Commission
issued an order imposing "price mitigation" rules on electricity sold to
California and 10 other states in the western power grid (OD Jun.15,p6).
The pounding prompted Skilling to issue a statement pledging that Enron would
make its earnings targets.
Barbara Shook.
(c) Copyright 2001. The Oil Daily Co.
For more infomation, call 800-999-2718 (in U.S.) or
202-662-0700 (outside U.S.).

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

MARKET WEEK
Commodities Corner
Power Plays: Beaten-down energy stocks look attractive
By Cheryl Strauss Einhorn

06/25/2001
Barron's
MW19
(Copyright (c) 2001, Dow Jones & Company, Inc.)

The Federal Energy Regulatory Commission last week voted to extend controls
on California power prices to 10 other Western states and to keep them in
force every day, rather than just during shortages. The news sent share
prices tumbling, not only for energy trading and marketing companies, such as
Enron, but also for alternative energy providers, such as Plug Power, and
outfits that build and operate power plants, such as Calpine and NS Group.
The decision dampened expectations for the profitability of these industries,
in part because capped prices will reduce incentives to build power plants
and to find new energy sources.
While regulators' decision to "mitigate" prices is popular with consumers, it
does nothing to fix the underlying energy problem. For the companies being
vilified are exactly those that need the most investment to expand energy
supplies. Their shares' selloff may make them ripe for picking. With their
services a necessity, these companies should find politicians willing to come
up with tax breaks and other incentives to offset the price caps and boost
the supply of electricity.
Donato Eassey, a Merrill Lynch analyst who follows electric, natural-gas and
other energy companies, thinks the stocks are "now well oversold." For "while
there still remains a long road ahead to navigate through the California
chaos, we believe the crushing political pressures, which have helped
decimate over $45 billion in energy merchant market cap since the beginning
of the year [for an average decline of 27%], may be in an ebbing mode."
Which companies look best? Perhaps Sempra Energy, which signed a preliminary
agreement last week with the State of California to settle its $750 million
in undercollected power costs. The settlement should not have any earnings
impact, in part because the company is well reserved. This company is one of
the very few energy trading and marketing shops that hasn't suffered a big
stock setback in the past month. Eassey describes it as "holding in there
like a rock." Sempra's share price is unchanged during the past month and is
actually up 18% this year.
Eassey says the stock has held up well, in part because it has been
undervalued as investors have failed to recognize that the company does much
more than generate energy: "It has a sizable trading and marketing arm." Now,
though, he thinks it will benefit from being the largest combination U.S. gas
and electric utility; its assets, he says, mean the company "has a lot of
shock-absorbing capacity."
In addition, the surge in electric and gas prices is expected to move states
and companies toward long-term, fixed-price energy contracts, which provide
better margins to the energy companies than selling at volatile spot-market
prices.
As a result, Sempra, which trades at 11 times expected earnings and five
times expected cash flow, while posting a return on equity of 20.5%, could
"conservatively see 43% total-return potential" in the next 12 months, Eassey
says, for a price target of 36.35.
He likes the prospects for shares of Dynegy, El Paso Energy and Williams,
which have been crushed in the past month. Indeed, after being the
second-best-performing stock in the S&P 500 last year, Dynegy is off 26% in
the past month alone, while shares of El Paso are down 19% and those of
Williams are off 16%.
All these companies' businesses are diversified; they're not only in
exploration and production, but also in pipeline and refining, as well as in
coal and natural-gas liquids. Each owns some generating capacity and trades
and markets energy products. Eassey sees the companies also benefiting from
their business mix and from the greater certainty that long-term, fixed-price
contracts offer. He looks for 30%-40% price appreciation for the group in the
next 12-24 months.
Yet for Enron, often considered the premier trader and marketer, Eassey is
less optimistic, even though its shares have taken a hefty 17% hit in the
past month. Enron doesn't own much generation capacity. Moreover, although
energy prices may continue to be volatile, there is a perception that price
peaks and troughs may grow less pronounced because the market is more heavily
regulated and there are fewer spot -- or cash market -- transactions. Thus,
profits from Enron's trading may shrink. The company is in a "show-me" state,
he says.
After posting its biggest daily fall in 2 1/2 years Wednesday, gasoline
slumped to a six-month low at week's end, after the nation's biggest pipeline
stopped accepting new shipments from the Gulf Coast to the East. This is a
signal that the market is well- supplied for the peak summer-driving months.
July futures fell to 77.50 cents a gallon, or nearly 12% on the week.
Happy motoring.
--- KEY COMMODITY INDEXES

CRB Group Indexes 6/22 6/15 Yr. Ago

CRB Futures 205.38 211.62 227.08
Industrials 156.58 161.98 199.03
Grain/Oils 152.93 158.51 167.89
Livestock 256.50 258.10 249.71
Energy 239.41 261.61 271.07
Precious Metals 253.48 258.62 268.88

BARRON'S/Bridge-Telerate

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

SURVEY - POLAND - Why overseas energy investors are failing to generate high
returns.
By JOHN REED.

06/25/2001
Financial Times
(c) 2001 Financial Times Limited . All Rights Reserved

SURVEY - POLAND - Why overseas energy investors are failing to generate high
returns - POWER by John Reed - With liberalisation yet to find the correct
model and energy consumption half the EU average, most foreign companies have
to be there for the long-term.
As California's power crisis demonstrates, there is no handy single template
for privatising the energy sector. Small wonder, then, that Poland's effort
to liberalise its energy market and find new owners for its power plants and
distributors has a mild air of improvisation about it.
When the government approved an "integrated timetable" to privatise the
sector a year ago, its experts looked at reforms in Norway, Britain,
Australia and - sure enough - California, says Wojciech Tabis of the energy
department.
Last April, less than a year into the programme, the government amended the
strategy.
The shift reflected in part changes on the ground - including the creation of
Poludniowy Koncern Energetyczny, a powerful group of seven generators in
southwestern Poland - and partly the view, promoted by economy minister
Janusz Steinhoff, that Poland should sell its investment-starved power plants
first.
This was on the grounds that distribution companies are natural monopolies
and certain to attract investors.
Now Poland plans to accelerate the sale of power plants, while continuing to
privatise two distribution companies already underway: Warsaw's Stoen, and
the so-called G-8 group of northern power distributors.
"In most EU countries, the power sector is either partly or wholly
state-controlled," explains Professor Marian Milek, deputy treasury ministry
responsible for energy.
"Poland is opening up, so we need to be careful that there will be a
guarantee of the security of our power market."
For foreign investors, Poland holds the lure of a deregulating market where
power consumption per head is only about half the EU average. With EU
membership in sight this decade, Poland could also serve as a conduit for the
transit of cheap power from ex-Soviet countries to the West.
French utilities Electricite de France and SNET, Poland's Elektrim and
Sweden's Vattenfall have invested to date.
The Swedish state-owned utility owns 32 per cent of the southern GZE
distribution group and 55 per cent. Warsaw's district heating plant in
Siekierki, and hopes to increase both stakes to a majority within two years.
Vattenfall is targeting Poland, alongside Germany, as prime territory to
expand. "In the European market, it's a question of eat or be eaten," says
Hannu Kostiainen, general manager for Poland.
"We have to grow and increase the value of the company, and the only way to
do this is to invest."
Poland's power market is expected to get an added fillip on July 1 when, if
the country's energy regulator keeps its earlier promises, the country will
begin moving away from tariff controls while Polskie Sieci
Elektroenergetyczne, the power-grid company, initiates the operation of an
hourly balancing market.
Both measures will contribute to the creation of a fully-fledged wholesale
market for power, a prospect attractive to both foreign and local market
players.
One is US power giant Enron, which invested in a gas-fired plant a year ago
with the explicit aim of gaining a foothold for future business in power
trade.
Some of the early investors have complained of a difficult time from
regulators, officials, and the strains of working on a still-unliberalised
market.
One publicly-held foreign energy company that failed in a bid for a power
plant last year complains the going is so hard that only state-controlled
companies like Vattenfall and EdF can afford to tough it out.
"They're determined to get into Poland regardless of the short-term costs,"
he says, declining to be quoted because of pending business at other energy
companies. "Unfortunately, we have to satisfy shareholders."
Vattenfall's Mr Kostiainen disputes the view. "Financing our operations is
much more difficult than for private companies," he says. "We can't use new
emissions to do it, so we're dependent on bank financing and our own cash
flow."
Yet he and other company officials, while noting the market's promise, have
also complained of tough going in the initial phase.
Some of the issues are familiar to veterans of Polish state sell-offs in
other sectors, including the need to sign a "social pact" with the plant's
powerful unions.
At Vattenfall's Elektrocieplownie Warszawskie power plant in Siekierki, its
talks with unions yielded a five-year guarantee of employment for workers,
plus a "privatisation bonus" of 15,000 zlotys ( $3,750) per head. The company
was lucky to negotiate the unions down from their demand to match a
seven-year guarantee paid by a rival investor at another Polish plant, says
Jan Reutergardh of Vattenfall.
Zealous regulation of tariffs by the Bureau of Energy Regulation, Poland's
sectoral watchdog, has also squeezed the operation's bottom line.
Last year, says Mr Reutergardh, the body approved a3 per cent tariff for
Siekierki, though inflation was about 10 per cent. The plant reported a 16m
zloty profit last year, but the gains were eaten up by "social funds"
reserves made, and other costs relating to the privatisation process, he says
"Poland has to go into the EU, and has to privatise companies," Mr Kostiainen
says pointedly. "But if they want foreign companies to participate, they have
to make sure the investors are satisfied."
The tariff liberalisation promised starting in July should silence some of
the investors' complaints.
So will a planned move away from long-term offtake contracts. The contracts
account for about two-thirds of the existing market and, as a side-effect,
give generators little incentive to lower their prices.
They were bestowed on power plants to provide them with collateral for bank
loans to finance their development.
One reflection of the resulting distortion is the slow trading at Poland's
wholesale power exchange. It trades barely 1-2 per cent of the total market
turnover, below the 4-5 per cent deputy minister Mr Milek says it needs to
become viable.
The contracts are now being phased out, says Mr Tabis of the economy
ministry.
Government officials belittle investors' complaints, noting they will be more
than compensated in future for having occupied an early foothold in the
Polish market. Foreign power companies concur with the view, albeit from a
different perspective: "I don't think anyone is here for the near-term
future," says one.
(c) Copyright Financial Times Ltd. All rights reserved.
http://www.ft.com.

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

India: L&T seeks 51 pc stake in Vijaynagar power project

06/25/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) -
Asia Intelligence Wire

BANGALORE, June 24. LARSEN and Toubro has sought a 51 per cent stake in the
500 MW Vijaynagar thermal power project. The project is being taken up as a
joint venture with Karnataka Power Corporation Ltd (KPCL).
KPCL sources said the shareholders' agreement would be finalised with L&T
once some of the issues such as restricted tenure of power purchasing
agreement (PPA) were addressed.
KPCL had originally shortlisted PowerGen International and Enron along with
L&T as the joint venture partners for the project. But both Enron and
PowerGen pulled out of the financial bids, leaving L&T as the lone bidder.
The original proposal had envisaged a 25 per cent stake for the joint venture
partner, with 26 per cent with KPCL and the remaining equity to be raised
through the participation of financial institutions, banks, equipment
suppliers and the public.
The sources said that among the issues that have been raised by L&T included
the State Government's restriction on PPAs. As per the new power policy
adopted by the State Government, the validity of the PPAs has been restricted
only to five years.
This was not acceptable to either KPCL or L&T. Such a policy framework, the
sources said, would result in front-loading of tariffs, which in turn would
imply high tariffs. This was because the entire debt recovery period would
have to restricted to this period. Accordingly, what is now being sought is a
longer duration PPA, on the basis of internationally-recognised 30-year
contracts. This would allow the tariff to be kept to optimum levels, even
after factoring in a minimum of 16 per cent return on equity as is permitted
by the Electricity Supply Act.
Besides, the sources said, the Government's policies regarding tariff
indexing also needed to be clarified. The Government wants a flat rate of
tariff indexing of five per cent per annum, whereas generating companies
would ideally prefer to have a tariff indexed to actual prevailing costs of
operations or inflation-linked. It is only after these issues are sorted out
that KPCL is prepared to proceed with the finalising of the PPA.
Along with these issues, the project cost has also been quietly revised.
The new cost per MW has been worked out to Rs 4.62 crore per MW, which is in
line with the estimates made for two of the 1000 MW stations - CLP-Tata and
Nagarjuna Power - proposed in the State.
The original cost estimate was Rs 2,099 crore or Rs 4.1 per MW. Accordingly,
the revised project cost is now about Rs 2,400 crore. This is to be funded
through a 70:30 debt equity ratio, with the equity component comprising of at
least Rs 692 crore.
But KPCL has already tied up fuel linkage with Talcher. The coal requirement
for the project is estimated to be in the region 2.8 million tonnes per annum
assuming a plant load factor of 80 per cent and a calorific value of 3,000
kilo calories per kg. This coal is to be brought by sea to the newly
corporatised port of Ennore and evacuated by the Railways to Vijaynagar.
- C. Shivkumar

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

Rolls charged up on power generation
Soma Banerjee

06/25/2001
The Economic Times
Copyright (C) 2001 The Economic Times; Source: World Reporter (TM)

ROLLS Royce India Private has drawn up expansive plans to enter the captive
power generation market in a big way.
The company which has been associated with the Indian power sector for the
past few years has already identified some states and is in negotiation with
private developers to set up such power plants.
In an exclusive interview to ET, Mr Rod William managing director of Rolls
Royce power who looks after the companys entire energy operations in Asia
said: ``We want to establish ourselves as one of the players in the captive
projects category where projects would be from 4 to 6 mw to a maximum of 100
mw.
He recently met the union power minister to appraise him of the companys
plans. The union power ministry has taken up a major drive to refurbish the
image of the power sector following the Enron debacle.
In its bid to get attract customers from the industry, the company is
organizing the first road show of its kind in Gujarat next month. The company
has already approached industrial consumers who are in need of reliable
power.
``We have got very favourable response and consumers from a wide range of
industries from glass, textile cement have shown interest, William said. What
is interesting is that Rolls Royce has also been interacting with financial
institutions and lenders and they are willing to lend to projects that are
realistic.
The road show will be held in Surat, Vadodhara and Mumbai in the first phase
and taken to other southern states in the second phase.
The company has zeroed in on Tamil Nadu, Andhra Pradesh Gujarat and
Maharashtra as their target destinations for the gas based captive power
projects.
Apart from offering to set up plants, the company will also offer other
services like energy service, or operation and maintenance of the plant, and
even take up distribution for specified regions.
The idea behind taking up distribution would be to feed the excess power into
the grid. In fact, since most industrial consumers would prefer to have
reliable power such captive power plants are likely to find enough takers, he
said.
The government is also opening up special schemes to attract such investments
into the export processing zones. Setting up power plants for these zones
would take care of the industrial needs and allow the extra power to be fed
into the grid.

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


Complaint against some non-jurisdictionals (PowerEx, BC Hydro) and Mirant.
CARE is a fringe group.  Probably won't be taken seriously.

Sue Mara
Enron Corp.
Tel: (415) 782-7802
Fax:(415) 782-7854
----- Forwarded by Susan J Mara/NA/Enron on 04/19/2001 08:42 AM -----

	"Ronald Carroll" <rcarroll@bracepatt.com>
	04/19/2001 06:49 AM

		 To: <gfergus@brobeck.com>, <ray.alvarez@ei.enron.com>, <acomnes@enron.com>,
<cyoder@enron.com>, <jsteffe@enron.com>, <rsanders@enron.com>,
<smara@enron.com>, <sbishop@gibbs-bruns.com>
		 cc:
		 Subject: Fwd: Californians for Renewable Energy, Inc. (CARE)  v. BC Hydro,
et al., EL01-65

Date: Thu, 19 Apr 2001 07:27:07 -0500
From: "Tracey Bradley" <tbradley@bracepatt.com>
To: "Aryeh Fishman" <afishman@bracepatt.com>, "Andrea Settanni"
<asettanni@bracepatt.com>, "Dan Watkiss" <dwatkiss@bracepatt.com>, "Kimberly
Curry" <kcurry@bracepatt.com>, "Ronald Carroll" <rcarroll@bracepatt.com>
Subject: Californians for Renewable Energy, Inc. (CARE)  v. BC Hydro, et al.,
EL01-65
Mime-Version: 1.0
Content-Type: multipart/mixed; boundary="=_5D06B43C.1A7B1DE3"

FYI - Attached is a complaint filed by CARE on April 16 against BC Hydro,
Powerex, Mirant and BPA (with the LADWP thrown in as an unnamed respondent).
The complaint is principally directed against BC Hydro and Powerex.  It
essentially accuses BC Hydro and Powerex of manipulating the reservoirs in BC
and transmission capacity reserved by Powerex on the BPA system to COB and
NOB to withhold power during a period of peak demand "to contrive a shortage
and test their market power."  CARE accuses BC Hydro and Powerex of violating
Section 206 of the FPA, state and federal anti-trust laws, the civil rights
of Californians under Title VI of the Civil Rights Act of 1964 and NAFTA.

The complaint is long on sensational allegations and short on facts.  The
evidence proffered in the complaint consists of a rant off the YAHOO Message
Board by an unnamed power trader in Spokane (we think it is an Avista
trader), selected transmission data from the ISO, the LA Times article of
April 11, 2001 regarding the ISO's report on Powerex, BPA and LADWP, the ISO
report itself, and BC Hydro's residential rate schedule.  CARE requests FERC
to initiate an investigation, seeks unspecified refunds and punitive damages
and also appears to want FERC to have the Secretary of DOE declare an
emergency under Section 202(c) of the FPA and compel deliveries of
electricity.

FERC has noticed the complaint and has established May 8 as the due date for
interventions and responses.

 - el01-65.tiff


I will be out of the office from Wednesday thru Friday, Oct 24-26.  If you need immediate assistance, please contact Brian Schwertner at ext. 3-7576.


Set up an interview with me.
---------------------- Forwarded by John J Lavorato/Corp/Enron on 11/14/2000
09:12 AM ---------------------------

Asthana25@aol.com on 11/13/2000 02:27:00 PM
To: <lavorato@enron.com>
cc:

Subject: (no subject)

John,

I am interested in a power options trading position at Enron.  I have a track
record of profitable options trading and market-making in illiquid markets,
and have also worked closely with Origination groups to design and evaluate
structured products for customers.  I attach my resume for your review and
would welcome the opportunity to discuss my qualifications and background
with you in person.  I can be reached at 214-812-8560 during the day and
214-891-1705 in the evening.

Regards,

Manu

 - Manu Asthana.doc


John Quinn, one of our (many)litigators in California was approached by David Boies' firm about getting involved in the Quinque matter. He called me, learned that we were a defendant, and declined Boies' offer to get involved. I have attached the Boies firm response. I think the danger of allowing the Quinn Emmanuel firm to get involved far outweighs the benefit of getting a release. The release may be shortlived.  Enron could be added to Quinque or a Quinque copycat by another Plaintiffs atty. Furthurmore, their involvement in Quinque could result in the development of evidence adverse to our position in the Grynberg case. What are your thoughts?
----- Forwarded by Richard B Sanders/HOU/ECT on 05/23/2001 11:57 AM -----

	"John Quinn" <jbq@quinnemanuel.com> 05/22/2001 01:34 PM 	   To: <richard.b.sanders@enron.com>  cc:   Subject: Fwd: Re(2): Re(2): Pipeline Matter (Robert Silver)

here's the latest--if we agree to get involved in this, they will dismiss enron defts if it is ok with you
Content-Transfer-Encoding: 8bit
Received: from fc.bsfllp.com	([63.175.205.3])	by mail.qeuo.com; Tue, 22 May 2001 11:26:06 -0700
Message-id: <fc.007ea908000402a13b9aca0013667a77.402bd@fc.bsfllp.com>
Date: Tue, 22 May 2001 14:25:53 -0400
Subject: Re(2): Re(2): Pipeline Matter (Robert Silver)
To: jbq@quinnemanuel.com
Cc: rsilver@bsfllp.com
From: "Edward Normand" <enormand@bsfllp.com>
References: <sb0a4b97.090@mail.qeuo.com>
In-Reply-To: <sb0a4b97.090@mail.qeuo.com>
MIME-Version: 1.0
Content-type: text/plain; charset=ISO-8859-1

I think it would be worth pursuing that option with your client.  If it
meant the involvement of your firm (to any significant extent), the
plaintiffs would likely agree to dismiss the Enron defendants.


No home yet. May have to take to Penn Fuel.  I left a message with Equitable
to see if they are interested in Peoples, EOG, Equitrans and Penn Fuel.
What are you going to do with the CPA.  Bary Vanderhorst w/EES might be
interested.  If not I wll contact Equitable.

I will contact Dominion to see if they are interested in any of this gas.
John

Chris Germany@ECT
05/22/2000 11:26 AM
To: John M Singer/Corp/Enron@ENRON
cc:

Subject: Re: Questa Petroleum.

Do you have a home for the T&F Explor behind Penn Fuel for June?

I left a message for Charlie at CES this morning about all the other citygate
production.  I'm also trying to get a bid from CNG for the month of June on
the EOG and
Peoples gas.  I'll keep you posted.

	From:  John M Singer @ ENRON                           05/09/2000 01:07 PM

To: Chris Germany/HOU/ECT@ECT
cc:
Subject: Re: Questa Petroleum.

Chris Germany@ECT
05/09/2000 12:33 PM
To: John M Singer/Corp/Enron@ENRON
cc:

Subject: Re: Questa Petroleum.

Do you have a current Citygate production worksheet?


k have fun!

 -----Original Message-----
From: 	Maggi, Mike
Sent:	Tuesday, January 08, 2002 10:04 AM
To:	Nelson, Michelle
Subject:	RE:

sorry, im going now, then i am going to lunch with a friend from reliant then im going to play golf with george, john mckay and probably fred, i will give you a call later

 -----Original Message-----
From: 	Nelson, Michelle
Sent:	Tuesday, January 08, 2002 10:02 AM
To:	Maggi, Mike
Subject:	RE:

i don't know if i am.  we (me, derek, amy and laura) are having to describe what we do in "great detail" and have it to errol by the end of the day.  can you please run me over when you leave for today?

 -----Original Message-----
From: 	Maggi, Mike
Sent:	Tuesday, January 08, 2002 10:01 AM
To:	Nelson, Michelle
Subject:

what time are you working out today


Hey Mom,

Don't Worry about Friday, we ended up going out to eat with Michael and
Sheila.  Any more news on the watch and $?

I don't think that I am interested in the Grace luncheon, thanks though.

I am going to Austin this weekend but will be back on Saturday.  Shanna is
going to Louisiana, so this weekend will be good for the clothes.  Do you
need a check from Shanna for the airfare?  If so, let me know.

What did you do this weekend?

-Eric

"K. Bass" <daphneco64@bigplanet.com> on 10/23/2000 08:23:07 AM
Please respond to "K. Bass" <daphneco64@bigplanet.com>
To: Eric Bass <Eric.Bass@enron.com>
cc:
Subject: Good Morning

Hi Eric,
?
How was your weekend?? Sorry again about  Friday night.?
?
Someone from Grace Pres. Church called to extend an  invitation to you and
Jason for a "singles" luncheon after the 11 o'clock  service on Sunday.? If
you are interested, call 713-267-5075 for  reservations.? Just thought I'd
pass that along.
?
I hope we can see you this weekend.? Are you  going to Austin?? We have
plenty of time to look at the clothes.? She  ought to have a couple of weeks,
though, if she doesn't like what I  have.
?
Talk to you later.? Have a great day.?  LU-M


i get it


Lauri,

Here are the rates for May.  Again the A/D long haul rates are irrelevant for most of the month.  Call me if you have any questions.

Thanks,

Tom


Find attached the most recent version of the Enron Working Group List

     Please let me know if there are any additional changes

     Ryan

 - wgl.doc

This message contains confidential information and is intended only
for the individual named.  If you are not the named addressee you
should not disseminate, distribute or copy this e-mail.  Please
notify the sender immediately by e-mail if you have received this
e-mail by mistake and delete this e-mail from your system.

E-mail transmission cannot be guaranteed to be secure or error-free
as information could be intercepted, corrupted, lost, destroyed,
arrive late or incomplete, or contain viruses.  The sender therefore
does not accept liability for any errors or omissions in the contents
of this message which arise as a result of e-mail transmission.  If
verification is required please request a hard-copy version.  This
message is provided for informational purposes and should not be
construed as a solicitation or offer to buy or sell any securities or
related financial instruments.


Another Tino-gram.  DOE disclosed to Team Tino that they pay a $7.06/mo
demand charge per KW in addition to the $.053/kwh energy charge.  Tino didn't
know whether that was per KW of monthly demand, per KW of non-coincident peak
usage, or what.  The PNM tariff for govt. service is priced at $7.16/KW of
"demand above 10,000kw during peak period"  (peak period is daytime) so I
assume that is how it is calculated.  If that is the tariff ("Schedule
4000B") under which DOE really takes service, this is interesting because
that is not a very big discount off of the stated rate.  It is also
interesting that DOE is paying $.053/kwh for energy since the Schedule 4000B
energy rate is $.05072/kwh (maybe the difference is surcharges or something).
Tino's consultant has figured out that the demand charge equates to an
incremental $.011 in addition to the $.053/kwh energy charge, for a total
delivered PNM rate to DOE of $.064/kwh.  This is not as good as the 7 cent
number Tino threw around earlier in the week, but its still not terrible.  If
the bogey is a 10% reduction to the current rate, our number to beat is
$.0576/kwh.  Tino promised us copies of DOE's actual energy bills to confirm
these numbers.  That would be great and solves the due diligence problem you
and I talked about yesterday, Kevin.

Tino also passed along a rumor he heard from the Isleta's consultant that the
Cobisa Belen project is dead.  Do we know anything about this???
Interesting.  I'm waiting to hear back from Bill Votaw to line up a due
diligence call to Tino's government contracts lawyers in DC to confirm
whether the "sole source" strategy is legit.  Kevin, I'll let you know when
this is scheduled in case you want to be on the call.  Thanks.  DF


Here is the presentation Don and I have been working on.  I sent a copy to
Linda Miller, but please keep this very confidential.  Thank you.
Ben Rogers


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David,  Attached is the document with the insurance mark-ups that I noted on my voice mail.  Please review and lets discuss.

-----Original Message-----
From: Johnson, Patrick
Sent: Tuesday, August 21, 2001 4:53 PM
To: Nemec, Gerald
Subject: FW: LRCI, Inc. 113A

Received from Sorrento.  I will phone when I have had a chance to review.

-----Original Message-----
From: Heidi E. Broussard [mailto:heidiho@eatel.net]
Sent: Monday, August 20, 2001 11:48 AM
To: Johnson, Patrick
Subject: LRCI, Inc. 113A

Mr. Johnson,

The Risk Management department at Sorrento Pipeline has reviewed this document and attached are the changes they would like to make to the insurance issues.

Thanks,

Heidi E. Broussard
R/W Agent
337/394-7490
225/202-0059


Daren,
I have HPL Resources meter 988055 wasn't sure if I should path this for April
3rd's deal change.
and I have Mobil Oil meter 981040 that I pathed on the first for 30,000 that
change to 50,000 for the 3rd.
I didn't path them since they are industrials and Aimee's notes told me to
path Industrials -
except for a few exceptions.
Thanks, Julie
x58639


request_number:  DS-PP:012
firstname:  Peter
lastname:  Richardson
e-mail:  peter@richardsonandoleary.com
exhibit_wp-02-e-:  JCG-01 and -02
page_numbers:
request_text:  Please disclose and/or produce any and all communications from
October 16, 2000 to the present, between any of the party representatives
listed below and any representative of BPA concerning rates to be in effect
for BPA's Fiscal Years 2002-2006, the interactions of such rates and customer
contracts, or procedural aspects of rate these proceedings.

Terry Mundorf (WPAG)
Lon Peters (PGP)
Linc Wolverton (ICNU)
Scott Brattebo (PacifiCorp)
Kevin Clark (Seattle City Light)
David Hoff (PSE)
Geoff Carr (Northwest Requirements Utilities)
Dennis Parrish (Market Access Coalition Group)
Pam Jacklin (PacifiCorp)
Peter Richardson (PPC)
Kyle Sciuchetti (PPC)
Ray Kindley (PGP)
Jay Waldron (PGP)
Doug Brawley (PNGC)
Eric Johnson (PNGC)
Darcy Norville (PGE)
Lynn Williams (PGE)
Steve Weiss (Northwest Energy Coalition)
Mark Hellman (OPUC)

For purposes of this Request, "disclose and/or produce" has the meanings
described below. With respect to oral communications, "disclose and/or
produce" means to describe the time, date, approximate duration, and
substantive content of the communication; the identity and organizational
affiliation of the communicating individuals; whether the communication
occurred in person or by telephone; the location of the communication if in
person; the identity of any witnesses to the communications, including all
individuals in the room if the communication occurred by speakerphone; and
whether the communication was made in the presence of or after coordination
with BPA counsel (if so, identify such counsel). For purposes of this
Request, you need not "disclose and/or produce" oral communications that
occurred during meetings noticed in compliance with Rate Case Rule 1010.7(d).

 With respect to written communications, the Request includes communications
in any recorded form, whether on paper, electronic (including, without
limitation, e-mails), or whatever form. For such communications, "disclose
and/or produce" means to provide copies of all non-identical versions of any
written communications and to describe with particularity the location where
such communications were found and/or stored, including the identity of the
individual with possession or control of the written communications; to
describe with particularity the circumstances under which they were generated
or referred to; and to fully "disclose and/or produce" any oral
communications made in connection with the written communications consistent
with the preceding paragraph. For purposes of this Request, you need not
produce papers served on all parties to the rate case and made part of the
official file in the rate case.

response_text:  The Public Power Council (PPC) objects to this Data Request
on the grounds that it (i) seeks information that is not relevant; (ii) seeks
information that is privileged; and (iii) seeks information that is unduly
burdensome to produce. Rules of Procedure Governing Rate Hearings, Section
1010.8(b). PPC further objects to this Data Request on the grounds that it is
in improper form as it does not cite to specific testimony or indicate the
specific use to which the information sought will be put. Special Rules of
Practice, WP-02-01. Without waiving the foregoing objections, PPC responds as
follows:

Please see attached.  Note all the attachments appear to also be responsive
to DS-PP:010 and DS-PP:011.

The following information is from the web server:
1.  Logon: IUSR_GRANITE
2.  Remote Host:  dsl226.usw-1-224.pacifier.com
3.  Remote IP Address:  207.202.224.226
4.  Form URL:
https://secure.bpa.gov/power/secure/psp/ratecase/discovery/wp_02_response.html
5.  Browser Client:  Mozilla/4.76 [en] (Win95; U)


BUSINESS HIGHLIGHTS

Weather Group

Let,s give a big round of applause to the Weather Team!  Environmental
Finance Magazine ranked the weather group #1 in Online Services and #1 Dealer
in the United States and Europe.  Gary Taylor, manager in weather trading,
comments, "The "Best Dealer" award reflects our counterparties' appreciation
for the significant effort we have made to drive the growth of our market by
making two-sided markets where other companies are only willing to quote
either a bid or an offer.  This award also reflects the innovative nature of
everyone on our desk, and their ability to price non-standard structures for
our customers.  It is truly a team award.  The "Best Online Dealer" award is
simply another testament to the unparalleled success of EnronOnline.  By
providing tight, two-way markets online, we have provided two critical
elements to generate growth in our market: 1) an element of price discovery,
and 2) a quick and easy way to transact."

The Weather Risk Management group launched a new product this week:  Power
Demand swaps.  These contracts use power demand as an index and allow power
market participants (generators, btu distributors, marketers, etc...) to
mitigate volumetric exposures.  The first contract the desk offered is for
the PJM power pool.  On EnronOnline, weekly swaps are available and the desk
has placed option contracts on this index in the broker market.  Inquiries
regarding this product should be directed to Claudio Ribeiro (product
manager) x37313, Gary Taylor x31511, or Valter Stoiani x36906.

Competitive Analysis and Business Controls
eSource, Enron's premier corporate-wide research group, launched their new
intranet product, eSearch, on December 1, 2000.  eSource's team of
specialized researchers have created a web site to bring information and
research to every employee's desktop.  The eSearch web site offers many links
to information resources, access to research databases, specialized searches,
sites to purchase books, articles, and reports, and training.  Employees can
use the web site to conduct their own research or as a vehicle to submit
research requests.  eSource's researchers and industry specialists are
available to all Enron business units to provide timely and cost efficient
research, to work with individuals or groups to fulfill one time research
requests, or to design ongoing, customized monitoring projects or news
updates.

Enron Global Markets Fundamentals
EGM Fundamentals is quickly building a team of expert analysts and associates
to work directly with traders and marketers.  The team is already busy
analyzing various commodities and market situations.  For example, an
initiative is underway to analyze current negative fractionation spreads in
the market resulting from rising natural gas prices.  Web sites to host this
analytical information are currently in development for all EGM commodities.
These sites will provide research and analysis, weather, publications, and
any other information that will assist in decision-making or identification
of potential commercial opportunities.  For questions or requests regarding
fundamental research, contact Jennifer Fraser at x34759.  For questions or
suggestions regarding the web sites, contact Heather Purcell at x54057.

Austin Energy
Austin Energy and Enron Sandhill, L.L.C, a subsidiary of Enron North America
broke ground November 29, 2000 for the construction of the Sand Hill Energy
Center, a 180-megawatt peaking electrical generation facility.  Located in
eastern Travis County, the Sand Hill Energy Center will be a natural gas
fired facility that will operate primarily during peak demand periods.  The
$93.7 million project will feature four 45-megawatt General Electric gas
turbines and will be operational May 1, 2001.

NEWS FROM THE GLOBALFLASH

Coal
The London dry cargo seafreight team traded 1 million metric tonne of
Capesize vessel swaps via EOL in one day, (Wednesday 28th November). The deal
was created by combining OTC options and a physically related cash market
deal.  This helps to bring our YTD EOL to just under 2.5 mln tonne.

Off-shore wind energy deal
Enron Wind has signed a power purchase agreement with Swedish energy company
Graninge.  According to the agreement, Graninge will deliver electricity to
consumers using Enron's wind power plants in southern Sweden.  Enron Wind's
Utgrunden off-shore wind park, completed this year, will generate in the
region of 38,000 megawatt hours of electricity, or enough for around 6,000
average homes between the mainland and the island of Oland on the southeast
tip of Sweden.  In an announcement this week, Graninge stated that it plans
to market the power to consumers as 'green' energy.

Happy 1st Birthday EnronOnline!
This week saw EnronOnline celebrate its first birthday.  During the course of
its first year, EnronOnline has passed a number of milestones including the
addition of a range of new functionalities for customers on the site.
EnronOnline has now come of age, having surpassed the $274 billion mark in
notional value in November.  This represents a total of 478,695 transactions
since the site was launched on 29 November 1999.

The first anniversary was marked by giving the media guest access to
EnronOnline in Europe.  A team from Reuters was invited into Enron House to
receive a full demonstration of EnronOnline and as of today will be able to
quote in reports live prices from EnronOnline.  Other media outlets are being
invited to obtain guest access during the coming weeks as the word of
EnronOnline's success continues to spread...

Australia
Enron Australia continues to assist in the region in a supportive role.
Elliott Katz worked on the GEM migration in Singapore last week with an IT
team from London, Oslo and Singapore.  Approximately 40 users, including
Traders, were migrated to Windows 2000 and the CORP domain.  This is an
important step for the Asia Pacific region, as it brings the three biggest
offices (Singapore, Sydney and Tokyo) into line with corporate standards for
desktop computing.

Japan
E-Power, a JV between Enron and Japanese finance company Orix, has announced
proposals for a 2000MW gas-fired power plant at Mutsu-Ogawara, an industrial
area  in northern Japan.   A feasibility study will be undertaken to define
how the project will go forward and this may include the development of an
LNG terminal in the vicinity.  The nature of the permitting process is such
that the plant would not begin operations for six to seven years.  This
project is just one of several options that E-Power are working on in Japan.

NUGGETS & NOTES

&Go Big or Go Home8 ) Mike McConnell/President & CEO-EGM

"Call Back" - Don Schroeder, VP/Crude Trading-EGM

REMINDER

Holiday Party
Enron North America, Global Markets and Industrial Markets
Enron Field
Saturday, December 9
7:00 - Midnight

WELCOME
New Hires ENA/EIM/EGM
ENA ) Joseph Taylor, Jennifer Rosado, Rabi De, Louis Dicarlo, Scott Churbock,
Kenneth Parkhill, Nicholas Ernst, Dirk Dimitry, Stephanie Taylor, Dimitri
Tagaropulos, Georgia Blanchard, Jona Kimbrough, Jeffrey Baldwin, Patricia
English, Jaesoo Lew, Cheryl Nelson, Gina Abbott, Ryan Keith, Brian Dawson
EGM )Ellen Alexander, Mike Perun

Transfers to ENA/EIM/EGM
ENA ) Gregory Golden
EGM ) Keynan Dutton

FROM THE EDITORS

Thank you to all the contributors to this week's EnTouch.  We want to hear
from the various departments within Enron Americas, Global Markets and
Industrial Markets!  Please continue to send your business highlights,
nuggets & notes or suggestions to Michelle Vitrella or Kathie Grabstald.

LEGAL STUFF

The information contained in this newsletter is confidential and proprietary
to Enron Corp. and its subsidiaries.  It is intended for internal use only
and should not be disclosed.


May 18, 2001
Page One Feature
In an Era of Deregulation, Enron
Woos Regulators More Than Ever
By BOB DAVIS and REBECCA SMITH
Staff Reporters of THE WALL STREET JOURNAL
WASHINGTON -- Every energy executive in America would have liked a half-hour
with Vice President Dick Cheney as he fashioned the Bush administration's
national energy program. Enron Corp. Chairman Kenneth Lay got it.
1
Mr. Lay used the time to set out an eight-point agenda intended, among other
things, to head off price controls on wholesale electricity, provide Enron
and other energy traders with unfettered access to the nation's
electricity-transmission system and remove regulatory obstacles to building
new generating plants and power lines. The energy plan President Bush
unveiled Thursday reflected many of those same priorities.
In an interview last week, the vice president said he also met with other
energy executives, but Mr. Lay was the only one he named. Mr. Cheney says he
sought Mr. Lay's advice because "Enron has a different take than most energy
companies."
Indeed, Enron Corp. is a modern paradox. It has transformed itself over the
past 15 years from a stodgy gas-pipeline operator into the nation's largest
trader of gas and electricity and a formidable player in newer markets such
as telecommunications services and emissions-reduction credits. Today, it's
the quintessential model of a company dedicated to free markets.

Yet as much as any company in the U.S., it has cultivated close ties with
government. Since the late 1980s, the Houston-based company, which was
President George W. Bush's biggest corporate campaign donor, has beefed up
its lobbying staff, boosted its political contributions and sought out
friends in the world of politics. Now, with Mr. Bush in the White House, it
is in a unique position to see whether those efforts will pay off.
Enron's lobbying blitz reflects one of the ironies of the era of
deregulation. Just as government created immense telephone, electric and gas
monopolies early in the last century, Enron and other players feel they need
the government's help in opening up those monopolies and gaining access to
once-closed markets.
In particular, Enron wants the Federal Energy Regulatory Commission to ensure
that energy is deregulated on terms favorable to the company. Rather than
having the nation's transmission lines controlled by the utilities, it wants
those lines to provide open access for new entrants such as Enron eager to
buy and sell power.
Mr. Lay is on a first-name basis with a half-dozen members of the Bush
cabinet and knows many senior White House staffers from their days in the
Texas governor's mansion with Mr. Bush. Before joining the administration,
both White House economist Lawrence Lindsey and U.S. Trade Representative
Robert Zoellick were on Enron's advisory board, which pays members an annual
stipend of $50,000.
Under Mr. Lay, Enron has donated nearly $2 million to Mr. Bush during his
political career. Since the start of the 2000 campaign, Enron and its
employees have contributed $1.3 million to the Bush presidential drive, the
Republican Party and the presidential inauguration, says the Center for
Responsive Politics. Enron also accounted for $461,000 in contributions
during Mr. Bush's two runs for governor, according to the Center for Public
Integrity.

Mr. Lay, who holds a doctorate in economics, says all he wants from
government is a fair shake. Enron supports candidates "you believe in," he
says. "You believe in their value system, you believe in their philosophy and
you believe they'll do the right things as leaders."
But it's clear that Mr. Lay wants more than that from government. For now, he
is focusing on FERC, where he worked in the early 1970s when the agency was
known as the Federal Power Commission. He hopes to make FERC his ally in
beating back the power of utilities. Long dismissed as a regulatory backwater
overseeing wholesale transactions by electric and gas utilities, the
commission has emerged as the chief navigator of the nation's transition to a
fully deregulated energy marketplace.
Even before Mr. Bush took office, FERC had begun to rein in the market power
of utilities. In December, FERC told the nation's utilities that it wanted
them to voluntarily surrender their high-voltage lines -- those that can
dispatch electricity across state lines -- to independent grid operators,
such as those already in place in California and the Northeast, which would
provide open access to the lines. Although it told the utilities to submit
plans for doing so, many of them have been reluctant to relinquish control of
their lines to such independent organizations.
Mr. Lay wants FERC to go further, forcing the utilities to cede direct
control of their lines. He also is seeking rules that would end what he calls
energy "balkanization" and create "seamless" interstate electricity markets.
"Enron is the biggest gas and electric company entirely dependent on the
competitive side of the business," says Andre Meade, an analyst for
Commerzbank. "To the extent deregulation slows down, their business slows
down."
Right now it's a lucrative strategy. Enron typically targets tightly
controlled markets just as they are opening up, using its financial clout and
risk-management savvy to gain a dominant market position. In doing so, it
frequently portrays itself as an insurgent taking on entrenched interests.
In electricity, for instance, Enron buys the output of generating plants,
sometimes days, weeks or years before the power is actually produced. Using
sophisticated weather data, it determines the most lucrative market for the
power, finds a buyer and then arranges delivery via transmission lines owned
by others. It hedges its positions with other contracts. Its wholesale
trading volume climbed 55% for natural gas and more than doubled for
electricity in the first quarter alone. Such growth pushed Enron's wholesale
energy-trading income, before taxes and interest, up more than threefold to
$785 million during the first quarter.
Between 1996 and 2000, Enron's yearly net income nearly doubled to $979
million and its revenue increased almost eightfold to $100.8 billion. Over
the same period, Enron's stock price, adjusted for splits, rose more than
fourfold.
At the start of the Bush administration, FERC's future was very much up for
grabs. Two of the five seats on the commission were vacant, and Enron quickly
sought to fill them with activist Republicans. President Bush named a friend
of his and Enron's to one of those seats: Texas utility-regulator Pat Wood.
Mr. Wood had worked closely with Enron during a six-year effort to open
Texas' retail electricity market. Mr. Wood also had shown the kind of
backbone Enron wanted in a separate fight over telephone deregulation when he
insisted on closely monitoring phone utilities to make sure they opened their
networks to competitors.
Higher Profile
For the second slot, Enron backed Nora Mead Brownell, a Pennsylvania utility
regulator. She had come to Enron's aid in 1997 when she voted to block an
electricity-market restructuring plan backed by Philadelphia's utility and by
GOP Gov. Tom Ridge. Enron argued that the plan would have locked it out of
the Philadelphia market.
Enron worked to raise Ms. Brownell's visibility by lobbying the House
Commerce Committee to include her as an expert witness on energy issues and
as a member of an informal advisory group, say Enron and congressional aides.
Mr. Lay provided heavyweight support. He says Enron included Ms. Brownell's
name on its "priority list" of a half-dozen prospective FERC nominees. And
when her candidacy ran into opposition from Pennsylvania officials with
bitter memories of her 1997 decision, Mr. Lay says he phoned Karl Rove, the
White House's top political strategist, to tell him that "she was a strong
force in getting the right outcome" in Pennsylvania."
A White House spokeswoman says that a number of individuals and industry
groups weighed in favor of Ms. Brownell, but she declined to name any. Ms.
Brownell says she was unaware of any concerted Enron campaign on her behalf.
She didn't ask the White House who had supported her because, she says, "I
didn't want to be beholden."
Meanwhile, Enron was using its Democratic contacts to strengthen its ties
with Linda Breathitt, a Kentucky Democrat on the commission. Earlier this
spring, the company hired two of former Vice President Al Gore's closest
friends as lobbyists: Nashville lawyer Charles Bones and Mr. Gore's
campaign-finance director, Johnny Hayes. Both had come to know Ms. Breathitt
through Democratic politics.
Ms. Breathitt says she wasn't very familiar with Enron's interests, but that
she accepted when Mr. Hayes invited her to dinner at a Washington restaurant
in April to meet Richard Shapiro, Enron's managing director for government
affairs. "Everyone likes to get to know the FERC commissioners," Ms.
Breathitt says, adding that she always pays for her own meals.
Enron has long played this kind of insider's game. Mr. Lay has been friendly
with both Democratic and Republican administrations over the past 25 years,
sharing time on the links with Presidents Bill Clinton and Gerald Ford. He's
been a particularly close friend of the Bush family. In the late 1980s, he
ran then-Vice President George H.W. Bush's fund-raising drives in Texas.
After the younger Bush became governor, he appointed Mr. Lay to run the
influential Governor's Business Council. Mr. Lay also made Enron's fleet of
corporate jets available to the new governor and won his help in lobbying
officials considering Enron projects.
In March 1997, Mr. Lay wrote Gov. Bush to ask that he lobby the Texas
congressional delegation to support export-finance credits critical to Enron,
according to letters released by the Texas State Archivist's office. In April
1997, when Enron was negotiating a $2 billion natural-gas joint venture in
Uzbekistan, Mr. Lay wrote to thank the governor for meeting with the
Uzbekistani ambassador to the U.S. Six months later, another Lay thank-you
note concerned a phone call Mr. Bush made to Pennsylvania Gov. Ridge to
support Enron's plan to enter the Philadelphia electricity market. "I am
certain it will have a positive impact," Mr. Lay wrote.
Mr. Lay says he hasn't sought Mr. Bush's aid directly since Mr. Bush won the
presidency. Last month, he talked with the president briefly at a Houston
benefit for the Barbara Bush Foundation for Family Literacy, on which Mr. Lay
serves as co-chairman. "It's not a matter of us going off hunting or fishing
or sitting around and having drinks," he says.
Not all Mr. Lay's initiatives have been successful. When Mr. Bush reneged in
March on a campaign pledge to fight global warming by requiring reductions in
carbon-dioxide levels produced by burning hydrocarbons, Mr. Lay says he
telephoned Mr. Cheney to complain. "The scientific evidence, although
certainly not conclusive, is pretty compelling that there could be a
climate-change problem," he says he told the vice president. "The
administration should still look very seriously at it."
Around the same time, Mr. Lay also called Mr. Rove, the White House political
adviser, to urge him to talk to Fred Krupp, the head of the moderate
Environmental Defense Fund. Messrs. Krupp and Rove spoke briefly but found
little common ground. Later, Enron, which has plans to add emission credits
to the commodities it trades, joined a coalition urging mandatory reductions
in carbon-dioxide levels.
But Enron saved its main lobbying push for Mr. Cheney's energy task force. In
April, Mr. Lay met with the panel's staff director, Andrew Lundquist, and
later, with Mr. Cheney, whom Mr. Lay had come to know well when the vice
president was chief of Halliburton Co., a Dallas construction company. "We
built Enron Field together," says Mr. Lay, referring to Houston's new
ballpark.
In both meetings, say Enron and White House officials, Mr. Lay presented a
broad agenda for opening up the nation's electrical system and used the
gas-transmission system as a point of comparison. In both cases, he argues,
pipelines and transmission lines should be like the federal highway system
that offers easy access to all.
Finding the Bottlenecks
The Cheney report uses similar language, describing the electrical grid as
"the highway for interstate commerce in electricity." As Enron sought, the
report directs the energy secretary to determine by the end of the year
whether it makes sense to establish a national grid, and to identify
bottlenecks in the transmission system as well as how to remove them. An
effort to make the grid national would enhance FERC's power, as Enron has
urged.
The report is mum on some Enron concerns, such as requiring utilities to join
regional transmission organizations, an idea strongly opposed by the utility
industry. A White House aide says the task force didn't want to get involved
in such battles between industries.
As solid as its support in the White House has turned out to be, Enron is
worried about the backlash against electricity deregulation in Western states
and possibly in New York, should electricity rates surge this summer. Nevada
repealed its deregulation law last month, spooked by the way skyrocketing
wholesale-electricity prices in neighboring California were undermining the
Golden State's economy. California and Oregon are contemplating
state-government purchases of major utility assets.
Enron's biggest fear is that the political pressure will lead the states, or
perhaps Congress, to control prices, which could undermine Enron's business.
In response, Enron has formed a coalition with eight other energy marketers
in New York, who each have pledged $50,000 to pay for a media and lobbying
campaign. It also has hired former Montana Gov. Marc Racicot and dispatched
him to court Western politicians. Two weeks ago, Mr. Racicot had breakfast
with an old colleague, Oregon's Democratic Gov. John Kitzhaber. After the two
chatted about fly-fishing, says Mr. Kitzhaber, "Marc did say he was working
to re-energize the discussion about energy and had some ideas for a framework
the governors might want to consider."
Though Mr. Kitzhaber says he knew that Mr. Racicot had joined the Washington,
D.C., lobbying firm Bracewell & Patterson, Mr. Racicot didn't disclose that
he was on retainer to Enron -- and the star of Enron's Western states
"advocacy team." For his part, Mr. Racicot says he was working "not at
Enron's direction but with their knowledge" to advance positions that he,
too, feels are important.
-- Jeffrey White contributed to this article.
Write to Bob Davis at bob.davis@wsj.com2 and Rebecca Smith at
rebecca.smith@wsj.com3

Allison Navin Hamilton
Manager, Federal Government Affairs
Enron
1775 Eye Street, NW #800
Washington, DC 20006
202-466-9141
202-828-3372 (fax)


Cc list suppressed...

Oh thank you FERC, in chaos there is opportunity...dsg

Please see the following URLs...

http://news.excite.com/news/r/000803/19/energy-power-ca
lifornia

http://www.sacbee.com/news/calreport/calrep_story.cgi?N
340.HTML


-----Original Message-----
From: 	Germany, Chris
Sent:	Monday, June 17, 2002 2:37 PM
To:	Barbe, Robin; Kelly, Katherine L.
Subject:

With a heavy hand I write this message to the Aquila Merchant Services people.  As Bob mentioned in his earlier message we must now reduce our Wholesale Group to reflect that we, ILA, do not have the credit capacity to continue to support the needs of the business.  Starting today we will begin to wind down our Commodity Services and CapitalServices groups, both in North America and in Europe, with the goal of being significantly out of all commercial operations by the end of the summer.  Later today we will take the first step to reduce the headcount of the organization.  For many of our fellow workers today will be the last day at Aquila.  For those not released today, we will need to, as carefully and responsibly as possible, put our beloved company to bed.  At the end of this process, the remaining employees, as is true with me, will be let go.

No one is to blame, it is just an unfortunate reality we have found ourselves in, and we are left with this ugly choice.  Please try to hold your head up, we have built a great company of talented, motivated, creative, and dedicated people.   Hold on to your integrity, respect yourself and each other, and remember what a team we have had.

Ed


FYI

Vince
---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 09/19/2000
08:55 AM ---------------------------

Steven E Shreve <shreve@matt.math.cmu.edu> on 09/07/2000 04:44:33 PM
To: Vince.J.Kaminski@enron.com
cc: ps5@andrew.cmu.edu
Subject: Visit to Carnegie Mellon

Dear Dr. Kaminski:

Pierre Ste-Marie tells me he has invited you to visit Carnegie Mellon.  I
would just like to emphasize how much we hope you can arrange a visit.  We
have had the good fortune of attracting outstanding students into our
Master's program in Computational Finance, and I think you will enjoy
meeting them.  Last year Alexander Eydeland visited, and at the conclusion
of the year hired one of the students.  I look forward to meeting you.

Sincerely yours,
Steve Shreve

Steven E. Shreve
Department of Mathematical Sciences
Carnegie Mellon University
Pittsburgh, PA  15213-3890

E-mail: shreve@cmu.edu
Direct Telephone: 412-268-8484
Department Telephone: 412-268-2545
Fax: 412-268-6380


Lee,

If this will be a dual fuel unit, it seems we should at least have a place
holder guarantee, even if the details aren't included.  Any problem with that
approach?

Kay

lee.johnson@ss.ps.ge.com on 12/18/2000 07:02:45 AM
To: peterthompson@akllp.com, kay.mann@enron.com
cc: lee.johnson@ss.ps.ge.com, kent.shoemaker@ae.ge.com,
paulpipitone@akllp.com, chriscobb@akllp.com

Subject: RE: E-Next Generation CISO1

Kay/Peter-

We don't need a liquid fuel guarantee at this time, since we don't know
where the dual fuel units are going.  When that is determined, we will
provide the LF guarantee at the time the site conditions are known.  Let's
press on.

Thanks,

Lee

-----Original Message-----
From: Thompson, Peter J. [mailto:peterthompson@akllp.com]
Sent: Friday, December 15, 2000 4:25 PM
To: Kay Mann (E-mail)
Cc: Lee. Johnson (E-mail); Kent. Shoemaker (E-mail); Pipitone, Paul;
Cobb, Chris
Subject: E-Next Generation CISO1

       Attached please find a clean copy of the latest draft of the
E-Next Generation CISO1 Agreement and Exhibits, as well as blacklines
showing changes made to each from the prior draft we circulated.  This
is identical to the documents for the CISO2 documents but for the unit
number and agreement reference.  To complete the agreement, we need Ben
Jacoby's fax number and a liquid fuel performance guarantee. As for the
exhibits, we need the information for Part B of Exhibit A-1.  We will
also need to add Exhibit H-2, Exhibit R (if necessary) and confirmation
that we will not have any site specific information usually contained in
Exhibit U.
 <<Exhibits to E-Next Agreement CIS01 -Comparison of Versions 1 to
2.DOC>>  <<E-Next Generation CIS01 Breakout Agreement-Comparison of
Versions 2 to 3.DOC>>  <<Exhibits to E-Next Generation Energy Break-Out
Agreement CISO1 12/15/00.DOC>>  <<break out agreement for CIS01
(12/14/00).DOC>>


I'm going over the Park & Loan discounts on CNG for May.  I need to see the
invoice to compare what we were billed to what CNG is showing on the discount
letter.

Gloria, Terry does not have the invoice.  Could you get me a copy please?

Thanks.


to unsubscribe from this list, see info at the end....
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
NEWS RELEASE
CALIFORNIA ENERGY COMMISSION
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Sender: owner-peaker@energy.ca.gov
Precedence: bulk
Reply-To: peaker@energy.ca.gov

For immediate release:  May 7, 2001
Contact: MaryAnn Costamagna  -- (916) 654-4989

Energy Commission Staff Completes Assessment
of Proposed Peaker Power Plant Project in Hanford

Sacramento - The staff of the California Energy Commission has
recommended approval of the proposal by GWF Power Systems Company for
a 95-megawatt peaker power plant at Hanford Energy Park in Kings
County.

The Hanford Peaker Project is a simple cycle, natural gas-fired power
plant proposed for construction and operation on a site immediately
adjacent to the existing GWF Hanford cogeneration plant, just north
of Idaho Avenue. If approved, the facility is expected to start
commercial operation August 1, 2001.

The Staff Assessment of this project can be viewed and printed from
the Energy Commission's Web Site at:

www.energy.ca.gov/sitingcases/peakers/hanford/documents

A site tour and informational hearing was held on the project on Friday,
April 20, 2001.

A Proposed Decision on the Hanford project, which will also be
available on the Energy Commission's Web Site, is being released
today.

The full five-member Energy Commission will consider the Proposed
Decision at its business meeting as follows:

THURSDAY, MAY 10, 2001
Beginning at 10 a.m.
California Energy Commission
1516 Ninth Street
Hearing Room A
Sacramento, CA
(Wheelchair Accessible)

The proposed Hanford Park Peaker Project applied to the Energy
Commission's emergency siting process to meet this summer's
electricity needs. The goal of the emergency process is to license
power plants that can be on-line by September 30, 2001, without
sacrificing the public's health or safety or California's environment.

Typically, peaker power plants are simple-cycle generators that can
be constructed in a relatively short period of time, readily
connected to the existing electricity transmission and natural gas
system, and dispatched quickly to meet peak electricity demands.

The Commission's Public Adviser, Roberta Mendonca, can assist
interested individuals and organizations and provide information on
participating in the Commission's emergency siting process. Persons
may contact Ms. Mendonca by e-mail at <pao@energy.state.ca.us>. For
information regarding proposed projects in Northern California, call
(877) 602-4747. For information about projects proposed in Southern
California, call (800) 273-4459.

Information about the proposed project is available on the Energy
Commission's Web Site at:

www.energy.ca.gov/sitingcases/peakers

###

--
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * *
Bob Aldrich
Web Development Team
California Energy Commission
916-654-4989

To unsubscribe from this list, please go to:

http://www.energy.ca.gov/listservers/

Or simply send an e-mail to majordomo@energy.ca.gov
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I won't be there Friday night but I sure will be on Sunday

-----Original Message-----
From: Dasovich, Jeff [mailto:Jeff.Dasovich@ENRON.com]
Sent: Monday, November 05, 2001 11:58 AM
To: Nancy Sellers; psellers@pacbell.net
Subject: RE: In love with cranesbills.htm

O boy, I feel another planting binge coming on!  Hey, we're likely going
to the Dome this weekend, so you're likely going to have put with seeing
us.  Could you believe that game last night--got to be one of the best
world series ever.

-----Original Message-----
From: Nancy Sellers [mailto:Nancy.Sellers@RobertMondavi.com]
Sent: Monday, November 05, 2001 1:55 PM
To: 'Jeff Dasovich'; Prentice @ Berkeley; Prentice Sellers
Subject: In love with cranesbills.htm
Importance: High

This sounds like a perfect thing for out front and the picture is very
very
pretty

 <<In love with cranesbills.htm>>

**********************************************************************
This e-mail is the property of Enron Corp. and/or its relevant affiliate and
may contain confidential and privileged material for the sole use of the
intended recipient (s). Any review, use, distribution or disclosure by
others is strictly prohibited. If you are not the intended recipient (or
authorized to receive for the recipient), please contact the sender or reply
to Enron Corp. at enron.messaging.administration@enron.com and delete all
copies of the message. This e-mail (and any attachments hereto) are not
intended to be an offer (or an acceptance) and do not create or evidence a
binding and enforceable contract between Enron Corp. (or any of its
affiliates) and the intended recipient or any other party, and may not be
relied on by anyone as the basis of a contract by estoppel or otherwise.
Thank you.
**********************************************************************


Start Date: 4/16/01; HourAhead hour: 20;  No ancillary schedules awarded.
Variances detected.
Variances detected in SC Trades schedule.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final
Schedules\2001041620.txt

---- SC Trades Schedule ----
+++ Hour 20 - bad data from ISO.
  TRANS_TYPE: FINAL
  SC_ID: EPMI
  MKT_TYPE: 2
  TRANS_DATE: 4/16/01
  TRADING_SC: PGAE
  PNT_OF_INTRC: NP15
  SCHED_TYPE: ENGY
  PURCH_SALE: 2
  DEAL_NO: 1


Great PICS.  When do you get back?  I want to see if we can get together up
in NYC or DC with OB and Mike.  I will be in the Hamptons for July 4th
weekend.  It's starting to get hot down here in Houston.  Things are going
well.  I have moveed into a new group (Enron's M&A Group) - were looking at
some interesting deals.  We are looking at taking a company public which I
may go work for if I can get enough equity in the deal.  The other thing that
might happen is finally going to my pops company at a much higher position
than I am at now, which would be great, but I would be in Ohio, booooooo.
That way Megan and I could buy a house and potential go and get an executive
MBA from Kellog, but these are all scenarios and if any of these play out I
would be amazed.  My golf game is ok, but my training is starting to get
better.  I did see that none of us made the NYC Marathon on the first go
around.  Did you see that Jon and Kati had their baby-I didn't even know she
was pregnant.  Shit were getting old!!!!!!!!!!   Hope all is going well and
I'll see ya.
Ben


<<NDA - TD Securities Inc.>> Your message

  To:      cliff.feehan@tdsecurities.com
  Cc:      Justin.Rostant@enron.com; David.Forster@enron.com;
Mark.Greenberg@enron.com
  Subject: NDA - TD Securities Inc.
  Sent:    Fri, 1 Jun 2001 16:54:14 -0400

was delivered to the following recipient(s):

Feehan, Cliff on Fri, 1 Jun 2001 16:48:38 -0400
    MSEXCH:MSExchangeMTA:SITE01:CIBG-EXCH-TOR04

Message-ID: <OF491AD2BC.43931E9F-ON86256A5E.00728663@enron.com>
From: Tana.Jones@enron.com
To: cliff.feehan@tdsecurities.com
Cc: Justin.Rostant@enron.com, David.Forster@enron.com,
Mark.Greenberg@enron.com
Subject: NDA - TD Securities Inc.
Date: Fri, 1 Jun 2001 16:54:14 -0400
Return-Receipt-To: Tana.Jones@enron.com
MIME-Version: 1.0
X-Mailer: Internet Mail Service (5.5.2653.19)
X-MS-Embedded-Report:
Content-Type: text/plain


-----Original Message-----
From: 	Anderson, Diane
Sent:	Monday, October 08, 2001 10:15 AM
To:	Bass, Eric
Cc:	Mulvany, Patrick
Subject:	FW: Deal: Y82661.1

please rebook below as per credit

 -----Original Message-----
From: 	Sonnonstine, Max
Sent:	Monday, October 08, 2001 10:09 AM
To:	Anderson, Diane; Bailey, Derek; Bell, Jean; Heaney, Gordon; Mulvany, Patrick; Ornelas, Bianca
Subject:	Deal: Y82661.1

The above deal, booked to Amax Energy, should be rebooked and confirmed to AEP Energy Services, Inc.

Thanks,
Max


This is the last one and probably the best - near smu (connected by rail to
downtown and near greenville - another bar area).  Might be a little more
expensive but probably worth it.

http://www.hilton.com/doubletree/hotels/DFWCNDT/index.html?show=all


Thanks for following up on this, Rhonda. I believe you just spoke with Chris
about the executed original of this contract. Please let me know what else I
can do to speed this process along. I ran a search for deals the West
Services desk has done with this counterparty (which were entered with Sierra
Pacific Industries, Inc.) and came up with only three deal numbers. They are:

580832
580137
580136

Would you like me to change these over? Or are you doing that along with the
re-confirmation? Please let me know when you get a chance.

Thanks,
Kate

Rhonda L Denton
04/17/2001 09:19 AM
To: Genia FitzGerald/HOU/ECT@ECT
cc: Christian Yoder/HOU/ECT@ECT, Chris H Foster/HOU/ECT@ECT, Samuel
Schott/HOU/ECT@ECT, Edward Sacks/Corp/Enron@Enron, Kate Symes/PDX/ECT@ECT,
Kimberly Hundl/Corp/Enron@Enron, Sharen Cason/HOU/ECT@ECT, Melissa Ann
Murphy/HOU/ECT@ECT

Subject: Sierra Pacific Holding Company, dba Siera Pacific Industries

Because of credit reasons, the name above will remain the name under the
contract.  Global Counterparty has agreed to set up this dba as listed on the
contract.  Once this CP has been set up, I will need the trades moved to this
CP and the deals will need to be reconfirmed in the accurate name.

If there are no objections, I will move the deals and instruct the confirm
person to resend the confirms.  I will also move the contract to this new
name.  Genia will prepare the amendment covering just the change in the
credit provisions.

If Portland holds the fully executed original, please forward to me at your
earliest convenience.  If you have any questions or further instructions,
please contact me at X35871.


IntercontinentalExchange
                                                                                Firm Physical Natural Gas Price Bulletin
                                                                                For Natural Gas Delivered on Tuesday, October   23, 2001
                                                                                (Trade Date of Monday, October   22, 2001)
Click here to access index history .
                                                                                * volume represents sell-side only *

Region     Hub	High	Low	Wtd Avg Index	Change ($)	Vol (mmBtu)	Hub Name
 LOUISIANA
    ANR SE	          $2.6550	          $2.5000	          $2.5882	+    .3196	         221,200	American Natural Resources Pipeline Co. - SE  Transmission Pool
    Columbia Onshore	          $2.6500	          $2.5500	          $2.6042	+    .3147	         127,100	Columbia Gulf Transmission Co. - Onshore Pool
    Henry Hub	          $2.7400	          $2.5325	          $2.6090	+    .3005	         518,000	Henry Hub tailgate - Louisiana
    NGPL LA	          $2.6975	          $2.5150	          $2.5949	+    .2945	         190,000	Natural Gas Pipeline Co. of America, Louisiana Pool
    Tenn 500L	          $2.6400	          $2.5000	          $2.5304	+    .2725	          92,600	Tennessee Gas Pipeline Co.-Zone L, 500 Leg Pool
    Tenn 800L	          $2.5800	          $2.4850	          $2.5184	+    .2804	          59,300	Tennessee Gas Pipeline Co.-Zone L, 800 Leg Pool
    TETCO ELA	          $2.6500	          $2.4900	          $2.5476	+    .3025	         156,400	Texas Eastern - East LA
    TETCO WLA	          $2.5800	          $2.5500	          $2.5662	+    .3465	          27,700	Texas Eastern - West LA
    Transco 65	          $2.7300	          $2.5950	          $2.6474	+    .2890	         156,300	Transco - Station 65
    Trunkline ELA	          $2.6050	          $2.4900	          $2.5525	+    .2995	          61,400	Trunkline Gas Company - East Louisiana Pool
    TxGas SL	          $2.7100	          $2.5650	          $2.6337	+    .2622	          42,500	Texas Gas Transmission Corp.-Zone SL FT Pool
 MIDCONTINENT
    MichCon, citygate	          $2.8150	          $2.7100	          $2.7741	+    .3382	         194,200	Michigan Consolidated
    NGPL Midcont	          $2.6050	          $2.4500	          $2.5342	+    .3919	         150,200	Natural Gas Pipeline Co. of America, Mid-Continent Pool
    NGPL Nicor, citygate	          $2.7500	          $2.6025	          $2.6407	+    .2934	       1,011,200	Natural Gas Pipeline Co. of America, Nicor Citygate
    NGPL NIPSCO, citygate	          $2.7300	          $2.6200	          $2.6622	+    .2815	          45,000	Natural Gas Pipeline Co. of America, Nipsco Citygate
    NNG Demarcation	          $2.6600	          $2.5350	          $2.6232	+    .4186	         165,100	Northern Natural Gas, Demarcation Pool
 NORTHEAST
    Columbia TCO	          $2.7825	          $2.6800	          $2.7243	+    .2851	         217,700	Columbia Gas Co. - TCO Pool
    Dominion So.Point	          $2.7700	          $2.6700	          $2.7206	+    .2624	         190,800	Dominion - South Point
    TETCO M3	          $2.9050	          $2.8100	          $2.8551	+    .3286	         261,300	Texas Eastern - M3 Zone
    Transco Z-6 (NY)	          $2.9000	          $2.8100	          $2.8352	+    .3060	         181,000	Transcontinental Gas Pipe Line Corp. - Zone 6 (NY)
 WEST
    El Paso non-Bondad	          $2.4650	          $2.2600	          $2.3571	+    .4236	         133,200	El Paso - San Juan Basin, Blanco Pool
    Huntingdon/Sumas	          $2.5650	          $2.4400	          $2.4889	+    .4865	         163,000	Westcoast Energy & Northwest Pipeline Corp.
    Opal	          $2.3250	          $2.1900	          $2.2640	+    .4288	          98,000	Opal
    PG?Citygate	          $2.7000	          $2.5700	          $2.6379	+    .5257	         112,000	PG?- Citygate
    SoCal Border	          $2.6500	          $2.5400	          $2.5829	+    .4199	          70,000	Southern California Border Points (Ehrenberg,Topock,Needles)
 WEST TEXAS
    El Paso - Keystone	          $2.4800	          $2.3450	          $2.4328	+    .3989	         323,100	El Paso - Keystone Pool
    Waha	          $2.6050	          $2.4000	          $2.5075	+    .3704	         147,000	Waha Hub - West Texas

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Here is the draft letter.
Thanks
Gary

> -----Original Message-----
> From: Hisert, George A.
> Sent: Friday, January 19, 2001 10:18 AM
> To: Fergus, Gary S.; Wooster, Kelly
> Subject: Enron/California Electricity
>
> Gary and Kelly,
>
> Following up our conference call with Richard Sanders earlier today, I
> have drafted a formal written request to California Power Exchange
> Corporation ("Cal PX") requesting release of a portion of the outstanding
> letters of credit posted by Enron.  As you will note by the bracketed
> material in the letter, there are a number of points that need to be
> checked.  I am not sure that we at Brobeck currently have sufficient
> documentation to write the definitive letter.
>  <<391S@01!.DOC>>
> There is no magic to the language of the letter.  Ideally the language
> describing the reasons why we are requesting the release of collateral
> should parallel the relevant provisions of the relevant Participation
> Agreement(s) and the relevant Tariff(s).  The only provision dealing with
> release of collateral that I have found in the documents that I have is
> Section 3.3.5 in the Information Guide for the CTS Markets, and that
> Section applies only to cash collateral.
>
> I suspect that Cal PX already has standard form notices concerning the
> release or reduction of outstanding letters of credit.  However, if a form
> is required, I can provide one.
>
> Feel free to pass the drafts and this email on to the client if you feel
> that it is appropriate.
>
> Sincerely,
>
> George A. Hisert
> Brobeck, Phleger & Harrison LLP
> Spear Street Tower, One Market
> San Francisco, CA 94105
> ghisert@brobeck.com
> phone 415-442-1746
> fax 415-979-2596
>

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Do we still want this?
---------------------- Forwarded by Richard Shapiro/NA/Enron on 02/26/2001
01:39 PM ---------------------------

George Strong <gstrong@political.com> on 02/26/2001 12:23:17 PM
To: jean.ryall@enron.com, Chad.Landry@enron.com
cc: rshapiro@enron.com, Geriann Warner <Geriann_Warner@enron.com>

Subject: Northeast Water Plant

February 26, 2001

I note that the HAWC and the Northeast Water Plant is on the Infrastructure
Committee's agenda tomorrow at Houston City Council.

I am concerned about the proposed Azurix project with the Houston Area
Water Corporation and the City of Houston. Two weeks ago I met with the
Mayor and City Attorney on the Mayor's political business and they told me
of their concern about the future of Azurix.  They wanted some assurance
from Ken or Jeff that Azurix would be around as a part of Enron if it were
awarded the Northeast Water Plant Project.  I believe they had some
communications with Azurix officials but they really wanted to hear from
someone at Enron.

I sent the word back to Enron through Joe, that someone high up should
contract the Mayor and the City Attorney to give them whatever assurance
they could concerning their concerns. I believe Joe discussed this with Steve.

Last Wednesday night I saw the Mayor and asked him if his request through
me had any results.  Had he heard from Enron?  He said no, and that he
needed to have some better feeling about the future of Azurix.

I assume we are working hard to get this project but based on my
conversation I would think we need to give some communication to the Mayor
from someone high up in the Enron organization.

George