Power Traders See Profits Rise On High Prices
The Wall Street Journal, 04/18/01

Business and Finance
The Wall Street Journal, 04/18/01

Briefcase: Skilling, analyst verbally butt heads
Houston Chronicle, 04/18/01

Energy giants have a season to remember
Houston Chronicle, 04/18/01

Edison Posts Losses for Quarter, Year Energy: The utility parent declares a
huge write-off for 2000 costs. Meanwhile, electricity suppliers are big
winners.
Los Angeles Times, 04/18/01

Edison reports 4th-quarter losses totaled $2.55 billion
The San Francisco Chronicle, 04/18/01

Chip Giant Cutting 2,500 Jobs
The Washington Post, 04/18/01

California Power Utility Loses $2.5 Billion in Fourth Quarter
KRTBN Knight-Ridder Tribune Business News: The Orange County Register -
California, 04/18/01

Enron's CEO fires from the lip
The Globe and Mail, 04/18/01

Bill restoring direct access advances
The San Francisco Chronicle, 04/18/01

Action on energy trading floors reverberate in power-hungry California
Associated Press Newswires, 04/18/01

Nigeria's electricity firm 'anxious' for US power project
Agence France-Presse, 04/18/01

US Government Issues Warning Letter to Italy's DeLonghi S.p.A.,
NetCompliance, Inc., Reveals
Business Wire, 04/18/01

CHIEF MINISTER OF INDIA'S MAHARASHTRA WRITES TO PM ON ENRON
Asia Pulse, 04/18/01

India: Enron slaps two more arbitration notices
Business Line (The Hindu), 04/18/01

USA: WRAPUP1-Calif. utility has huge loss, Texans strike it rich.
Reuters English News Service, 04/17/01

Texas Panel Cites Lessons From Calif Power Crisis
Dow Jones Energy Service, 04/17/01

Enron President & CEO - Interview
CNBC/Dow Jones Business Video, 04/17/01

Dynegy passes Street target
Marketing and trade power Q1 results
CBSMarketWatch.com, 04/17/01

Enron, Duke, Dynegy 1st-Qtr Profits Rise as Energy Sales Surge
Bloomberg, 04/17/01

Enron earnings jump by 20%
Financial Times.com, April 17, 2001

Power Traders See Profits Rise On High Prices
By Rebecca Smith
Staff Reporter of The Wall Street Journal

04/18/2001
The Wall Street Journal
A3
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Big power traders Enron Corp., Dynegy Inc. and Duke Energy Corp. reported
robust first-quarter earnings, beating Wall Street estimates and capitalizing
on a strong seller's market for electricity and natural gas, particularly in
the West.
For the first quarter, Enron had net income of $425 million, up 25% from $338
million a year earlier. Revenue nearly quadrupled to $50.1 billion from $13.1
billion. On a diluted-share basis, profit rose 22% to 49 cents from 40 cents
a year earlier.
Enron, Houston, the nation's biggest energy trader, posted a 59% increase in
the value of its retail energy-services contracts as companies sought a haven
from volatile electricity and natural-gas prices. Quarterly revenue for the
enterprise rose to $693 million from $314 million a year earlier.
"There's strong interest all across the country," said Enron Chief Executive
Jeffrey Skilling, and not just in places with high prices. The company also
showed solid overall growth in telecommunications business, despite some
growing pains in its broadband-services unit.
Mr. Skilling said, though, that he expects the bubble in energy prices to
burst in a year or so, with prices dropping to more normal levels as
natural-gas prices moderate and a slew of new electricity-generating plants
come on line.
Dynegy, also a Houston-based energy firm, reported first-quarter net of
$139.5 million, double the $69 million posted for a year earlier. Total
revenue rose to $14.2 billion from $5.3 billion. On a per-share basis, Dynegy
earned 41 cents, up from 23 cents a year earlier.
Dynegy Chairman Chuck Watson said he sees continued price volatility as a
good profit opportunity for the company. Dynegy, which acquired utility
Illinova Corp. in February 2000, continues to add aggressively to its
generating-plant portfolio and is nearly one-third of the way to its stated
goal of controlling 70,000 megawatts of plant capacity by 2005. "Ultimately,
we want to control 10% of the electric power marketplace," said Rob Doty,
chief financial officer.
Neither Enron nor Dynegy has disclosed the amount of reserves they have taken
against possible losses stemming from power supplied to California's troubled
utilities.
Pacific Gas & Electric Co., the state's largest utility, filed for court
protection under U.S. bankruptcy law earlier this month. Southern California
Edison could suffer the same fate if an agreement reached with California's
governor, calling for the state purchase of certain utility assets, isn't
consummated within four months.
The two utilities took a combined $6.6 billion in charges against 2000
earnings because of excessive wholesale power costs incurred in the latter
half of the year.
Barry Abramson, utilities analyst at UBS Warburg, says the two companies are
probably being cagey about their reserve levels for fear that regulators or a
bankruptcy court judge "might say to them `you don't get to recover what
you've already reserved.' "
Duke Energy, of Charlotte, N.C., posted first-quarter net of $458 million, up
17% from $393 million a year earlier. Earnings per share rose to 61 cents
from 53 cents. Duke said revenue more than doubled to $16.5 billion.
Unlike Enron and Dynegy, Duke disclosed that it took a $110 million reserve
in last year's fourth quarter to cover any loss associated with the
California market. No additional reserve was taken in the first quarter, the
company said.
Duke's wholesale energy enterprises reported earnings, before tax and
interest expenses, of $348 million, four times the result for the same
quarter of 2000. The unit now has more than 13,600 megawatts of generating
capacity in operation or under construction and plans to add a dozen or so
plants each year through 2003. It was a major purchaser of power plants of
which PG&E divested itself.
At 4 p.m. in New York Stock Exchange composite trading, Enron shares were up
56 cents to $60; Dynegy shares were up $2.80 to $55.95; and Duke Energy
shares were up $2.09 to $44.60.
---
Journal Link: Energy crisis? Not for everyone. See a video report of Enron
President and CEO Jeffrey Skilling discussing how a tight market is helping
fuel the company's growth, in the online Journal at WSJ.com/JournalLinks.

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

What's News

Business and Finance

04/18/2001
The Wall Street Journal
A1
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Enron, Dynegy and Duke posted robust earnings, beating expectations and
capitalizing on a strong seller's market for electricity and natural gas.
Edison reported a record quarterly loss of $2.55 billion on a huge charge
related to the California energy crisis.
---
Energy prices in New York could be much higher than previously forecast
unless the state moves swiftly to find sites for new power plants, a study
said.
---
Stocks eked out small gains despite Cisco's earnings warning. The Nasdaq
closed up 13.65 points on a late rally.
---
Excite@Home warned that first-quarter results would be weaker than expected
due to an advertising slump.
---
Markets --
Stocks: NYSE vol. 1,110,501,800 shares, Nasdaq vol. 1,844,891,898. Dow Jones
industrials 10216.73, up 58.17; Nasdaq 1923.22, up 13.65; S&P 500 index
1191.81, up 12.13.
Bonds:(4pm) 10-yr Treas up 18/32, yld 5.196%; 30-yr Treas up 20/32, yld
5.649%.
Commodities: Oil futures $28.24 a barrel, off $0.55; Dow Jones-AIG futures
index 109.381, off 0.868; DJ spot index 108.97, up 0.27.
Dollar: 123.33 yen, off 1.25; 1.1313 euros, up 0.0035; 2.2129 marks, up
0.0072.

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

April 18, 2001
Houston Chronicle
Briefcase: Skilling, analyst verbally butt heads
Enron Corp.'s top executive Tuesday fired off the same vulgarity that brought
President Bush embarrassment when he unwittingly uttered it in front of an
open microphone last fall. But unlike Bush, Enron President and CEO Jeffrey
Skilling says he knew the microphone was on during a conference call on
first-quarter earnings. Skilling laid down the insult in an exchange with
Richard Grubman, managing director of Highfields Capital Management in
Boston, who asked to see Enron's balance sheet and was told it would not be
available until later. "You're the only financial institution that can't come
up with balance sheet or cash flow statement after earnings," Grubman
grumbled. "Well, thank you very much, we appreciate that. Asshole," Skilling
responded with a laugh. "The specific fellow that I was not real happy with
is a short-seller in the market. I don't think it is fair to our shareholders
to give someone a platform like that they are using for some personal vested
interest related to their stock position." Grubman disputed Enron's assertion
the information was not available.
-- Reuters News Service

April 18, 2001
Houston Chronicle
Energy giants have a season to remember
Winter price spike helped Enron, Dynegy earnings
By MICHAEL DAVIS
Copyright 2001 Houston Chronicle
Houston energy companies Enron Corp. and Dynegy posted strong increases in
first-quarter earnings Tuesday largely because of much higher prices received
for natural gas and power sold during the winter.
Enron's revenues topped $50 billion during the first quarter, equal to half
of what the company generated during the entire year of 2000. The company on
Tuesday said it was increasing its earnings expectations for the year 2001 to
a range of $1.75 to $1.80 per share, up from $1.70 to $1.75.
"We really don't project revenues, but with a $50 billion first quarter, we
could break $200 billion this year," said Jeffrey Skilling, Enron's chief
executive officer.
Both Enron and Dynegy are owed millions in California, where Enron markets
power and natural gas and Dynegy owns power plants and sells natural gas and
power as well.
Enron, which is owed $570 million by bankrupt utility Pacific Gas & Electric
Co., did not address its California exposure in its earnings report. The
topic was discussed at length with analysts on a conference call.
Skilling said in a telephone interview that the company is fully reserved
against its California receivables, but the company has not specified how
much. Enron's raising of earnings expectations for the year should indicate
the company is confident its California exposure will not be a problem,
Skilling said.
"We are continuing to supply natural gas and electricity to PG&E," Skilling
said.
M. Carol Coale, energy analyst with Prudential Securities in Houston,
estimates Enron has taken a reserve of about 75-80 percent of what it is owed
in California.
"Enron has done a good job of addressing the way they handle risk, not just
in California but across the country because other regions are likely to be
short of power as well," Coale said.
Dynegy said its West Coast Power joint venture with NRG Energy, which owns
and operates the company's California power plants, has mitigated
substantially all of its credit exposure in the California market through its
long-term supply agreement with the state's Department of Water Resources
that runs through 2004.
Dynegy disclosed it was owed $265 million from power sales to California in a
a recent filing with the Securities and Exchange Commission.
Enron reported first-quarter net income of $425 million, or 49 cents per
share, on revenues of $50.1 billion. That compared with net income of $338
million, or 40 cents per share, on revenues of $13.1 billion in the first
quarter of 2000.
Enron's net income included a $19 million after-tax gain from a change in
accounting practices. Excluding that item, the company earned $406 million,
or 47 cents per share.
Analysts had expected the company to earn 45 cents per share for the quarter,
according to estimates compiled by First Call/Thomson Financial in Boston.
Enron shares closed Tuesday at $60, up 56 cents per share.
Dynegy reported first-quarter net income of $139.4 million, or 41 cents per
share, on revenues of $14.1 billion. That compared with net income $69
million, or 23 cents per share, on revenues of $5.3 billion in last year's
first quarter.
Dynegy's first-quarter 2001 results included a $2.02 million after-tax gain
because of a change in accounting principals. Without that gain, the company
earned $137.4 million, or 41 cents per share.
Analysts had expected Dynegy to earn 40 cents per share during the quarter,
according to First Call/Thomson Financial.
"It was a very solid quarter," said Jeff Dietert, vice president of research
at Simmons & Company International in Houston. "I think Dynegy is in an
excellent position to have sustained earnings growth in excess of 20
percent."
Dynegy's shares closed Tuesday at $55.95, up $2.80 per share.
Results reported at Enron's various businesses included:
? Wholesale Services: Enron's division that sells natural gas and
electricity, among other commodities, had an operating profit of $755 million
in the first quarter, up from $429 million in the year-ago quarter.
? Retail Energy Services: Enron's business that offers energy management
products to business customers in North America and Europe had operating
income of $40 million in the first quarter, up from $6 million in the first
quarter of 2000.
? Transportation and Distribution: Enron's unit that includes its natural gas
pipelines and its Portland General Electric utility had operating income of
$193 million, down from $233 million in the same period last year.
? Broadband Services: Enron's broadband business reported a $35 million
operating loss for the first quarter. This unit was not broken out separately
in the year-ago quarter.
Results reported at Dynegy's business units included:
? Marketing and Trade: The company's unit that sells natural gas and power
almost doubled its operating profit to $100.3 million, up from $50.3 million
in the 2000 first quarter. This one unit contributed 73 percent of the
company's total first-quarter net income as the average price of gas more
than doubled from a year ago.
? Midstream Services: Dynegy's unit that processes and markets natural gas
liquids had an operating profit of $22.9 million, down slightly from $24.2
million.
? Illinois Power: Dynegy's electricity transmission and distribution utility
had an operating profit of $25.9 million, up sharply from $4.9 million. The
company credited cost reductions and higher winter demand for the increase.
? Global Communications: Dynegy's newest division, which markets and trades
broadband services, had an $11.6 million operating loss from start-up and
expansion costs. The unit was not broken out from last year's first quarter
earnings.

Business; Financial Desk
Edison Posts Losses for Quarter, Year Energy: The utility parent declares a
huge write-off for 2000 costs. Meanwhile, electricity suppliers are big
winners.
NANCY RIVERA BROOKS; SARAH HALE
TIMES STAFF WRITERS

04/18/2001
Los Angeles Times
Home Edition
C-1
Copyright 2001 / The Times Mirror Company

Edison International on Tuesday joined its partner in deregulation
dysfunction, PG&E Corp., in declaring a huge write-off of electricity and
other costs. That resulted in large net and operating losses at the
Rosemead-based company for the fourth quarter and all of 2000.
But both utility parents continued to hold out hope that they would
eventually recover those costs and return their ailing balance sheets to good
health. PG&E, whose utility arm Pacific Gas & Electric Co. filed for
bankruptcy law protection April 6, posted its results Monday; both companies
delayed their filings by two months because of the uncertainty surrounding
their financial predicaments.
In stark contrast, in the last two day, several electricity suppliers to
California's gold-plated power market reported sharply higher earnings for
the first quarter.
Together, the earnings statements provide a handy scorecard of who has won
and who has lost in the crisis that has sizzled through the state's
electricity business in the last year.
Electricity suppliers "certainly are doing well," said Douglas Christopher,
utility analyst with Crowell, Weedon & Co. "If you control the source of
supply, you control a lot."
Consumer advocate Michael Shames sounded a darker note.
"Dollars are flowing out of the state at an accelerated rate," said Shames,
executive director of the Utility Consumers' Action Network in San Diego.
"It's leaving the utilities and flowing right into the hands of the energy
suppliers. They can't lose. The contrast is disgusting."
As expected, Edison International took a $4.2-billion pretax charge against
earnings, which translated into $2.5 billion after taxes.
The charge primarily reflected debts the company's beleaguered Southern
California Edison subsidiary piled up last year as wholesale electricity
prices skyrocketed and the utility was unable to charge customers all that it
paid for power because of a retail rate freeze.
Edison said it took the charge because of a recent decision by the California
Public Utilities Commission that forced Edison and PG&E to recalculate
electricity- and deregulation-related debt to include past profit earned
during the first two years of deregulation, when wholesale costs were lower
than retail rates.
That charge resulted in net losses for Edison International of $2.5 billion,
or $7.83 per share, for the fourth quarter and $1.9 billion, or $5.84 per
share, for the year. In 1999, the company posted net income of $96 million
for the fourth quarter and $623 million for the year.
Edison posted a fourth-quarter operating loss of $3.8 billion, versus
operating income of $326.9 million in 1999. Operating loss for 2000 was $1.73
billion, compared with operating income of $1.75 billion in 1999.
Excluding the electricity write-off, Edison International would have earned
$578 million for 2000; Southern California Edison would have earned $471
million in 2000 without the write-off, versus $484 million in 1999.
"Today's financial charge, painful as it is for the company, only recognizes
the well-known reality of SCE's large, unreimbursed costs of serving its
customers," said John E. Bryson, chairman and chief executive of Edison
International. "What is important now, however, is not so much compliance
with accounting rules but whether Edison ultimately has a path to recover its
costs."
Edison executives said the agreement it signed last week with Gov. Gray
Davis, if enacted by the state Legislature and the PUC, would allow the
company to recover most of the costs it wrote off Tuesday. The agreement
would allow for the sale of Edison's transmission grid to the state for $2.76
billion as well as for the sale of revenue bonds to help repay debt.
Only "prompt implementation" of the agreement, Bryson warned, "can avoid the
large costs of an SCE bankruptcy and make it possible for the company to
restore its financial health and ability to maintain a reliable power grid."
Legislators have been grousing about the agreement, raising fears that
passage might not be smooth.
"This is not a slam dunk," said Brian Youngberg, senior utility analyst for
the Edward Jones investment firm in St. Louis. "If everything falls into
place, they may well recover a large portion of the charge. But if it
doesn't, all bets are off."
Bankruptcy, whether voluntary or forced, remains a possibility, he said.
Consumer activists have opposed the agreement as a bailout by the state.
"I have very little sympathy for the utilities," said Mindy Spatt, media
director for the Utility Reform Network in San Francisco. "They supported the
deregulation of rates. They made their bed; now they have to lie in it."
Several electricity suppliers to California reported gigantic earnings surges
for the quarter ended March 31:
* Duke Energy Corp. of Charlotte, N.C., saw a 63% increase in first-quarter
operating profit, jumping to $554 million from $339 million a year ago.
* Houston-based Dynegy Inc. said its operating income increased 40%,
improving to $255 million in the first three months of 2001 from $182 million
a year earlier.
* Enron Corp. of Houston, which owns no power plants in California but is the
world's biggest buyer and seller of electricity and natural gas, said it
posted operating income of $406 million in the first quarter, compared with
$338 million in the same period last year, a 20% increase.
* Reliant Energy, another Houston energy conglomerate, said Monday that
operating profit for the first quarter rose 35%, to $460 million from $341
million in the year-ago quarter.
Carol Coale, an analyst with Prudential Securities Inc. in Houston, said
increased demand for electricity and natural gas in California and the rest
of the country fueled the earnings increases.
"Clearly, the California energy crisis has raised the bar on those power and
gas trading and marketing profits," Coale said. "Opportunities have existed
outside California as well."
But the companies all took great pains to note that California operations
were only a small part of their businesses. Dynegy President Steve Bergstrom
said the company has been "unfairly and inaccurately accused of withholding
power from the California market" to drive up prices and profit.
When asked about big profits at electricity suppliers, Edison Chief Financial
Officer Ted Craver quipped: "We're envious." But he quickly turned serious,
declining to comment on whether the generators were profiting at the
utility's expense.
"This is very, very serious business for us," Craver said, noting that the
company could take further charges that "could completely extinguish our
equity at the utility."
But the utilities are not the only companies facing possibly lowered
expectations, because a political or regulatory backlash could eventually
hinder future profit for generators as well.
"This free lunch is not going to last forever," utility analyst Christopher
said.
Edison International shares gained 3 cents to close at $11.88 on the New York
Stock Exchange; the stock remains well off its 52-week closing high of $26.13
on Sept. 13.
The generators' stocks have generally fared well as the broader market has
declined. In trading Tuesday, all gained on the NYSE: Duke closed $2.09
higher at $44.60 a share; Dynegy rose $2.80 to $55.95; Enron gained 56 cents
to $60; and Reliant was up $1.92 to $48.92.
*
Associated Press was used in compiling this report.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Shifting Fortunes for Energy Players
Financial results reported this week by California's two major utilities and
by out-of-state energy companies that supply them show the dramatic shift in
fortunes in the power business over the last year.
*
*
PG&E in 2000
-$4.1 billion
*
Edison in 2000
-$2.5 billion
*
. . . While Their Suppliers Boom
Operating income for key energy suppliers, in millions of dollars, first
quarter of 2001 versus first quarter of 2000:
*
Sources: Company filings, Bloomberg News, Times research
Researched by NONA YATES and TOM PETRUNO/Los Angeles Times

PHOTO: A worker in Edison's grid-control room in Alhambra.; ; PHOTOGRAPHER:
Los Angeles Times; PHOTO: Edison CEO John E. Bryson said the agreement
reached with the state needs to be applied soon.; ; GRAPHIC: Shifting
Fortunes for Energy Players, Los Angeles Times;

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

BUSINESS
Edison reports 4th-quarter losses totaled $2.55 billion
Carolyn Said
Chronicle Staff Writer

04/18/2001
The San Francisco Chronicle
FINAL
D.1
(Copyright 2001)

Edison International, the parent company of Southern California Edison Co.,
posted a $2.55 billion quarterly loss yesterday, a day after its Northern
California counterpart, PG&E Corp., reported a $4.1 billion loss.
Meanwhile, three out-of-state energy providers -- Dynegy Inc., Enron Corp.
and Duke Energy Corp. -- reported stellar profits for the first quarter of
this year but hastened to deflect charges that those profits came at
California's expense.
"The moral is: Some of these guys (the power companies) are unregulated; PG&E
and Edison are not," said Paul Patterson, an energy- industry analyst at
Credit Suisse First Boston in New York.
The power companies "have the flexibility to do what they want in the power
market," Patterson said. "The regulated utilities were not free to act in a
manner that would have have probably mitigated their (financial) situation."
After teetering on the edge of bankruptcy for months, Edison reported its
fourth-quarter results yesterday. The report had been delayed during its
bailout negotiations with the state.
Most of the $2.55 billion loss stemmed from writing off the $2.52 billion
difference between what Edison paid for electricity and what it was allowed
to charge customers. Rates were frozen under state law.
Without that write-off, Edison would have lost $28 million for the quarter
ended Dec. 31, 2000 -- still a drop from the $96 million in profit it made in
the fourth quarter of 1999.
RECOUPMENT PLANS
Edison of Rosemead (Los Angeles County) still hopes in one of two ways to
regain the money it wrote off. It is suing California in federal court in Los
Angeles for the right to pass along its unrecovered wholesale costs to
customers. Alternatively, if Gov. Gray Davis' plan to keep the company from
bankruptcy goes through, it would allow Edison to reverse the $2.52 billion
charge, the company said. Under the plan, Edison would recoup its losses by
selling its transmission lines to the state for $2.76 billion and issuing
more than $2 billion in bonds to pay back debt.
The rescue plan's future is far from certain. Many California legislators
reportedly oppose the plan, which -- after protracted negotiations -- was
quickly hammered out in the aftermath of Pacific Gas and Electric Co.'s
Chapter 11 bankruptcy filing earlier this month.
If the deal falls through, Edison's creditors are likely to force the company
to follow in PG&E's footsteps in filing bankruptcy.
Edison's annual results, also reported yesterday, showed a loss of $1.9
billion. Excluding the writeoff, it earned $578 million for 2000, compared
with $623 million in 1999.
Shares of Edison rose 3 cents to $11.88. The stock has fallen 24 percent this
year.
PROFITABLE SELLERS
The news was considerably sunnier on the other side of the energy equation,
where soaring wholesale prices and demand led to runaway profits for energy
sellers:
-- Enron -- Houston's Enron, the world's top buyer and seller of natural gas
and electricity, earned $425 million (49 cents per share) for the first
quarter, up from $338 million (40 cents) in the year- ago quarter. Sales for
the quarter ended March 31 zoomed to $50.1 billion, almost four times the
$13.1 billion collected from sales a year ago.
The results include a $19 million (2 cents per share) gain, because of the
adoption of new accounting standards; excluding that, Enron earned $406
million (47 cents).
Enron's stock closed up 56 cents at $60.
-- Dynegy -- A major power supplier in California, Houston's Dynegy saw
first-quarter earnings more than double, to $139.5 million (41 cents),
compared with $69 million (26 cents) in the year-ago quarter.
Revenues almost tripled to $14.2 billion, from $5.3 billion during the same
period last year.
Shares of Dynegy closed up $2.80 at $55.95.
-- Duke -- Responsible for about 5 percent of California's energy supply,
Duke of Charlotte, N.C., saw first-quarter earnings rise 51 percent to $458
million (74 cents), up from $393 million (49 cents) during the same period in
2000.
Revenues for the quarter increased 126 percent over the same period last year
to $16.5 billion.
Duke's shares closed at $44.60, up $2.09.
All three energy firms took pains to defend themselves from charges that they
have taken advantage of California's energy crisis to enrich themselves.
Dynegy said sales to California "did not make a material contribution" to its
profit growth, instead, attributing it to cold- weather demands in Northern
states.
In a statement, President and Chief Operating Officer Steve Bergstrom said
the company had been unfairly and inaccurately accused of withholding power
from the California market.
Enron said 80 percent of the growth in its power deliveries came on the East
Coast.
"We've been called all sorts of names," said Harvey Padewer, president of
Duke Energy Services. "The reality is we're selling most of our power for
below-market prices."

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

Financial
Chip Giant Cutting 2,500 Jobs

04/18/2001
The Washington Post
FINAL
E02
Copyright 2001, The Washington Post Co. All Rights Reserved

Semiconductor giant Texas Instruments said it will lay off 2,500 workers, or
6 percent of its workforce, and expects double-digit declines in sales to
continue through the first half of the year. The company said revenue fell 17
percent in the first quarter and it expects a 20 percent drop in the second
quarter because of weakening demand for its semiconductor chips in cell
phones and other products. Texas Instruments posted net income of $230
million, down from earnings of $421 million in the year-ago quarter.
Internet Service Settles Copyright Suit
RecordTV.com agreed to pay $50,000 to a group of movie studios and to stop
offering recorded shows without the studios' permission, settling a
nine-month legal fight. The Internet-based TV taping service had signed up
100,000 people who could have the site record specific TV shows and then play
them back over the Internet at a later date. Twelve members of the Motion
Picture Association of America, including MGM and Disney, filed a lawsuit in
federal court in June, alleging copyright infringement.
MORE NEWS
AOL Time Warner was sued by a California software company that claims America
Online version 6.0 infringes on a copyright for software used to play MP3
audio files. Privately owned Playmedia Systems seeks a court order to stop
AOL's use of the allegedly infringing software, as well as damages in excess
of $47 million. Playmedia contends that AOL's 1999 purchase of Nullsoft,
which licensed older technology produced by Playmedia, did not give it the
right to use the software in AOL 6.0.
Siebel Systems, a maker of business software, is expected to lay off hundreds
of workers because of a worsening sales slump. The exact number of jobs being
cut is expected to be disclosed as part of Siebel's first-quarter earnings
announcement, scheduled for release today after the markets close. Estimates
on Siebel's layoffs have ranged as high as 20 percent of its 7,400 workers.
The Federal Energy Regulatory Commission ordered power suppliers to
California to reimburse the state $587,000 -- far less than in earlier months
-- for overcharges in March. Under the order, Dynegy Power Marketing must pay
$469,662.60, Mirant Corp. must pay $92,620 and Williams Energy Services must
pay $25,574.25.
AARP announced a campaign against predatory mortgage lending. The
organization for people over 50 plans to intensify its lobbying for state
laws against such practices. AARP posted information about its campaign at
www.aarp.org/homeloans.
The Commerce Department wants to impose penalties on foreign steel
manufacturers that are subsidized by their governments, saying they are
hurting the American steel industry. The companies in India, Indonesia, South
Africa and Thailand make hot-rolled steel, used to manufacture cars and heavy
equipment. The Commerce Department ruled that penalties should be imposed for
damage to 20 U.S. steel companies in 13 states.
INTERNATIONAL
Philips Electronics said it will slash as many as 7,000 jobs, or about 3
percent of its workforce, to offset a slowdown of "extraordinary speed" in
demand for technology products. Europe's largest electronics maker also
reported a 91 percent drop in first-quarter earnings, to $93.3 million, and
warned that it may post a loss in the second quarter.
LOCAL BUSINESS
The U.S. Army and Johns Hopkins University's Applied Physics Laboratory in
Laurel will create and operate a national biotechnology center to research,
develop, test and deliver products to benefit the Army. Over the next year,
APL and the Army will decide on the center's location, organization and
participants.
Smithfield Foods agreed to buy Moyer Packing in the pork producer's first
foray into the beef sector. Souderton, Pa.-based Moyer, with annual sales of
about $600 million, is the country's ninth-largest beef processor. Terms of
the acquisition were not released.
EARNINGS
Edison International, owner of California's second-largest utility, had a
$2.5 billion loss in the fourth quarter, including a charge for power-buying
losses that have driven the company to the brink of bankruptcy. Edison, based
in Rosemead, Calif., lost $7.83 a share, including the charge. Excluding the
charge, the company had a loss from operations of $28 million, compared with
net income of $96 million a year earlier. Meanwhile, PG&E -- whose Pacific
Gas & Electric unit filed for bankruptcy protection earlier this month --
said it lost $4.1 billion in the fourth quarter and $3.4 billion for the
year. The loss was entirely due to a before-tax charge of $6.9 billion for
power-buying losses.
Big banks reported mixed first-quarter results. FleetBoston Financial said
its earnings fell 6.2 percent, to $870 million, while Bank One reported that
its profit declined 1.5 percent, to $679 million. But earnings at Wells Fargo
rose 12.5 percent, to $1.17 billion, and Mellon Financial's profit increased
8 percent, to $264 million.
Philip Morris's profit rose 4 percent in the first quarter as its
industry-leading tobacco business expanded its market share and food profits
swelled as Nabisco brands were added to its Kraft Foods roster. The maker of
Marlboro cigarettes, Maxwell House coffee, Post cereals and Oscar Mayer meats
earned $2.09 billion, versus $2.01 billion a year ago.
Johnson & Johnson's first-quarter profit rose 14 percent, outpacing a 6.5
percent gain in revenue, on improved sales of its most profitable products,
such as the Procrit anemia drug. Net income rose to $1.5 billion, from $1.31
billion a year earlier. Sales rose to $7.79 billion.
Enron, the largest energy-trading company, said first-quarter profit rose to
$425 million, from $338 million a year earlier, as increased electricity and
natural gas demand sent prices surging in California and other parts of the
country. Revenue almost quadrupled, to $50.1 billion from $13.1 billion.
Sprint and its mobile phone unit, Sprint PCS, came up shy of expectations.
Sprint, the nation's No. 3 long-distance carrier, reported that its non-PCS
business earned $315 million, down from $1.12 billion in the same period a
year ago. Sprint PCS reported a loss of $391 million, improving from a loss
of $513 million in the first quarter of 2000.
Charles Schwab Corp. said first-quarter profit fell 68 percent, to $97
million, as individual investors shunned the stock market and clients' assets
fell. The biggest discount broker said that when acquisition-related charges
are excluded it earned $120 million, down 63 percent from a year earlier.
Duke Energy said first-quarter profit rose to $458 million, from $393 million
a year ago.
Weyerhaeuser reported a 56 percent decrease in first-quarter profit, mostly
because of low lumber prices. The timber company had net earnings of $107
million, compared with $244 million in the same period last year.
First-quarter sales were $3.6 billion, down from $3.9 billion.
Caterpillar blamed an earnings decline on weak sales of truck engines and
mining equipment. The company reported earnings of $162 million, down from
$258 million for the first three months of 2000.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News
Service and Washington Post staff writers

http://www.washingtonpost.com

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

California Power Utility Loses $2.5 Billion in Fourth Quarter
James B. Kelleher

04/18/2001
KRTBN Knight-Ridder Tribune Business News: The Orange County Register -
California
Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World
Reporter (TM)

If you're still having trouble sorting out the corporate winners and losers
in California's power market, here's a handy mnemonic device that might help.
Power generators generate money for their shareholders.
Power distributors distribute pain to theirs.
The sour truth lurking behind that premise was on display once again Tuesday,
when Dynegy Inc., Duke Energy Corp., Enron Corp. and Edison International,
the parent company of Southern California Edison, all opened their books and
reported earnings.
For Edison, the cash-strapped utility that delayed reporting its
fourth-quarter earnings for two months as it waited for a state-led bailout,
the news was grim. The Rosemead-based company, which distributes electricity
to most of the homes and businesses in Orange County, said it lost $2.5
billion in the fourth quarter its worst quarter ever.
The loss came after Edison was forced to write off the $4.2 billion it paid
last year buying exorbitantly priced power on the state's deregulated
wholesale market for its rate-protected customers. Edison had hoped to
recover those outlays through higher rates and may still do so if its deal
with Gov. Gray Davis is OK'd by state legislators. But a recent decision by
the California Public Utilities Commission required the company to change the
way it accounted for the outlays and absorb at least temporarily the massive
loss. Speaking to reporters on a conference call shortly after the results
were released, Ted Craver, Edison's chief financial officer, warned: "The
cash position and the liquidity of the utility is in very serious
difficulty." The company also declined to provide analysts and investors with
any estimates for future earnings, citing California uncertainty.
"In order to have a complete disclosure," Craver said, "we would have to
(give investors an earnings range) and the range would be so wide as to be
meaningless." Yet Wall Street, which has already hammered Edison shares in
recent months, seemed to find some relief in Edison's finally coming clean.
The stock rose 3 cents to close Tuesday's session at $11.88. Shares of PG&E,
the utility that declared bankruptcy earlier this month and reported a $4.1
billion loss on Monday, also rose.
While Edison was finally acknowledging the losses it suffered last year as a
result of the situation in California, Houston-based Dynegy, a power producer
that co-owns almost 3,000 megawatts of generating capacity in the state,
reported that its first quarter earnings jumped 73 percent. The news sent the
company's shares surging 5.27 percent, or $2.80, to $55.95.
Dynegy, of course, is one of 13 companies that the Federal Energy Regulatory
Commission says overcharged the state's grid operator $69 million last
December and January. The FERC has ordered the companies to either justify
the prices or refund the money.
Also Tuesday: Enron Corp., another Houston-based energy trading company
that's made a killing in California, said recurring income rose 18 percent,
beating estimates, and confidently raised its projections for the rest of
2001.
The earnings news lifted Enron's shares about 1 percent on Wall Street and
prompted Salomon Smith Barney analyst Raymond Niles to raise his estimate on
the company's 2001 earnings even though PG&E, the state's other distressed
utility, owes Enron more than half a billion dollars.
"We note that ENE has taken significant reserves against their estimated $580
million receivable exposure to PCG," Niles told investors in a morning note,
"but that this reserve has already been built into their results. We
preliminarily raise our 2001 EPS estimate to $1.80 from $1.73." Duke Energy,
a North Carolina-based company with a growing footprint in California, said
first-quarter recurring income rose 51 percent.
Asked for his reaction to the latest round of record earnings from these
out-of-state companies, Edison's Craver quipped, "We're envious." "This is
obviously very, very serious for us," he said. "It has eliminated our
retained earnings within the utility. It's actually caused them to go
negative. We have a high potential of additional quarters of additional
write-offs which could completely extinguish our equity within the utility."
If Edison's deal with the governor is approved by the legislature, Craver
said the $4.2 billion charge would be reversed.
Edison is expected to report its first-quarter earnings in mid-May.

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

Report on Business: International
Enron's CEO fires from the lip
C. BRYSON HULL
Reuter News Agency

04/18/2001
The Globe and Mail
Metro
B8
"All material Copyright (c) Bell Globemedia Publishing Inc. and its
licensors. All rights reserved."

HOUSTON -- Enron Corp.'s top executive publicly fired off yesterday the same
vulgarity that brought U.S. President George W. Bush embarrassing headlines
when he unwittingly uttered it in front of an open microphone last fall.
But unlike Mr. Bush, Enron president and chief executive officer Jeff
Skilling says he knew the microphone was on when he called a fund manager an
"asshole" during a conference call to discuss first-quarter earnings with
analysts.
Mr. Bush made headlines on the campaign trail last year when he remarked to
Vice-President Dick Cheney that a New York Times reporter was a "major-league
asshole," not knowing that a microphone had picked up his remark.
Mr. Skilling laid down the insult after an exchange with Richard Grubman,
managing director of Highfields Capital Management in Boston, who asked to
see Enron's balance sheet and was told it would not be available until its
inclusion in a Securities and Exchange Commission filing later this month.
"You're the only financial institution that can't come up with balance sheet
or cash flow statement after earnings," Mr. Grubman grumbled.
"Well, thank you very much, we appreciate that. Asshole," Mr. Skilling
responded with a laugh.
Mr. Skilling, whose candour frequently gives his public relations staff fits,
said in a telephone interview that he knew the microphone was on.
"The specific fellow that I was not real happy with is a short-seller in the
market. I don't think it is fair to our shareholders to give someone a
platform like that they are using for some personal vested interest related
to their stock position," Mr. Skilling told Reuters in an interview.
"I get a little exasperated with that sort of thing, and I want people to
know I am exasperated," he said.
Mr. Grubman said he felt "pretty thin-skinned" about the CEO's remark.
He disputed Enron's assertion the balance sheets and cash flow statements
were not ready yet, particularly in light of Mr. Skilling's mention during
the call that Enron reconciles its credit risks and trading book daily.
"I'm sort of at a loss as to why that was such an objectionable question,"
Mr. Grubman said. Then he added: "He's got some nerve. He and his management
team sold seven million shares into the market 2last year, so he's plugged
the market for a half-a-billion dollars worth of stock valued in the $70s and
$80s.
"Now the stock is the high $50s-low $60s and I'm an asshole because I ask
about the balance sheet?"

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

NEWS
Bill restoring direct access advances
Greg Lucas
Sacramento Bureau Chief

04/18/2001
The San Francisco Chronicle
FINAL
A.15
(Copyright 2001)

Power users would be able to get their electricity from sources other than
utilities under a bill approved yesterday by a key state Senate committee.
The ability to buy power from producers, known as direct access, was removed
by a law signed by Gov. Gray Davis in January that turned the state into the
nation's largest buyer of electricity. Some of the largest energy users in
the state -- manufacturers, oil refineries, office building owners, farms,
grocery store chains -- are pushing for a return to direct access, though
some believe the deal moving through the state Senate isn't good enough.
Direct access was killed because lawmakers feared too many large users would
get power on their own, leaving residential and small business customers to
shoulder the bulk of the rate increases needed to pay off the costs of the
state's power purchases.
"It's a question of who pays," Sen. Debra Bowen, D-Marina del Rey, said of
her bill restoring direct access. "If you exempt some classes of customers,
that means those costs will be borne by other customers."
The bill was approved yesterday by the Senate Energy Committee on a 6-to-1
vote and now goes to the Senate Appropriations Committee.
Direct access has been around since 1996 when the state deregulated the
electricity market. But few energy customers, business or residential, opted
for it.
A year ago, just 2.2 percent of all electricity customers used direct access.
That has shrunk since January, when Enron Energy Systems and Green Mountain
dropped most of their direct access customers.
But big users want the right restored, hoping for more reliability and a
better price dealing direct with generators.
Those same big users, however, don't like Bowen's bill and prefer an Assembly
bill now in the Senate.
Consumer groups also oppose Bowen's bill because they think it is too kind to
big users. The big users say it isn't kind enough.
The chief objection by manufacturers and oil companies is the "exit fee"
Bowen would charge them if they buy their power direct. The fee would repay
the state for the costs it incurred buying electricity at high prices and
selling it to users at lower capped prices.
Consumer groups say her bill should be changed to prevent big users from
sticking with the utility when it benefits them financially, then switching
to direct access if that's a better deal - - at the expense of smaller
customers.
"They want it both ways," said Lenny Goldberg of the consumer advocate group
The Utility Reform Network. "In when it suits their purposes and out when it
doesn't."
Manufacturers and oil companies prefer an Assembly bill that restores direct
access but doesn't make them pay as much for the privilege.
Although that bill also imposes an exit fee, customers who build their own
power systems or choose co-generation to meet their energy needs would be
exempt.
That bill has been passed by the Assembly but has yet to be heard in the
Senate.

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

Action on energy trading floors reverberate in power-hungry California
By MICHAEL LIEDTKE
AP Business Writer

04/18/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

In Houston, it's known as "the power corner." Separated by just a few city
blocks, four major power wholesalers run trading exchanges that have a strong
influence on energy prices nationwide.
The trading floors run by Enron Corp., Reliant Energy Inc., Dynegy Inc. and
Duke Energy Corp. represent ground zero in a power crisis threatening the
quality of life in much of the western United States this summer.
By seizing upon opportunities created by deregulation, the energy traders
have turned up the juice in the electricity business in ways similar to how
junk bond traders ignited Wall Street in the 1980s and venture capitalists
fueled Silicon Valley last decade.
And thanks to an exemption granted in the early 1990s, nobody monitors daily
trading to detect unfair or illegal practices.
Utility bills in California have gone up nearly fourfold in the past year, to
$27.1 billion. Without fundamental changes in the energy market, this year's
bill will rise to $70 billion - more than $2,000 for every person in the
state, according to operators of the state's power grid.
The staggering electricity price increases have pushed the state's largest
utility, Pacific Gas and Electric, into bankruptcy and left No. 2 Southern
California Edison on the brink of insolvency. California's once-ample budget
surplus also has shriveled, as the state is spending about $50 million a day
to buy enough power to keep the lights on.
The energy wholesalers say they're doing nothing wrong.
They blame the high prices on the rising price of natural gas, burned to
generate electricity, and the state's botched deregulation plan. By failing
to line up reliable power ahead of time and by imposing price caps for
consumers, the state put itself into this mess, the companies say.
"There have been accusations of wrongdoing for eight months now and there
isn't a shred of evidence to support the allegations," said Gary Ackerman,
executive director of the Western Power Trading Forum, a Menlo Park, Calif.,
trade group. "People are very angry and frustrated about electricity right
now and attorneys are trying to take that anger out on us."
Attorneys general in Washington, Oregon and California are probing whether
the wholesalers have violated antitrust laws or engaged in unfair business
practices. A California state senate committee may issue subpoenas for
records and the testimony of top energy executives, and at least five
lawsuits accuse energy companies of market abuses.
"This is the best fraud I have ever seen," attorney Michael Aguirre of San
Diego, who is involved in one of the class-action suits. "The generators are
doing everything that you think that they might be doing, only it's worse
than you ever imagined."
The lawsuits and investigations allege that generators have conspired to
hijack billions of dollars from consumers and taxpayers by withholding
electricity from energy-starved California until the last minute, and then
supplying it at exorbitant prices.
At Enron's headquarters in Houston, energy specialists among the company's
1,500 traders swap electricity and natural gas contracts like stocks and
bonds. Mathematicians, meteorologists and economists make complex
calculations to identify where to buy the cheapest power and where to deliver
it at the greatest profit.
"They are extremely good at what they do," said Severin Borenstein, director
of the University of California at Berkeley's energy institute.
The Internet has provided the traders with the tools to do their jobs even
better. Online marketplaces and password-protected exchanges provide them
with invaluable real-time information on the buying and selling patterns of
their rivals.
Two lawsuits allege that traders have parlayed the sensitive information
collected online to fix prices artificially high, a violation of antitrust
laws.
Aguirre has spent six months assembling reams of data about traders and their
activities, but he has yet to develop concrete evidence to prove his
price-fixing allegations.
A March 21 report by California's electricity grid managers concluded that,
between last May and November, 98 percent of trading bids were driven up by
noncompetitive patterns of behavior.
The California Independent System Operator report stopped short of accusing
wholesalers of illegal market manipulation, but it did determine that the
wholesalers collected as much as $6.9 billion in "unjust and unreasonable"
rates.
Enron says its trading system, particularly the online exchange, has resulted
in fairer and more efficient markets. The allegations of market abuse are
"just some sour grapes from people who didn't come up with the idea in the
first place," said Enron spokesman Eric Thode.
The online exchanges and other industry Web sites provide the energy traders
with a window to see the energy availability and bids in markets around the
country.
Power industry critics, however, contend the Web's instant access provides
the traders a way to exploit a delicate supply-demand balance. If the scale
is tipped even slightly toward an inadequate supply, they say, prices soar
and energy traders reap huge gains.
"The whole trading thing is just a front that lets them game the market,"
Aguirre said. "They can get away with it because no one (outside the
industry) can figure out what they are doing."
Whatever the energy traders are doing, it's not closely monitored by
government regulators.
In 1993, the trading of energy products received an exemption from oversight
by the Commodity Futures Trading Commission, a federal agency that oversees
commodity and options trading to protect markets from fraud and manipulation.
Energy is the only commodity that has received a blanket CFTC exemption.
The exemption was shepherded beginning in 1992 by then-CFTC chairwoman Wendy
Gramm, wife of Texas Sen. Phil Gramm. She left the CFTC three months before
the exemption received final approval in 1993. That same year, she joined the
Enron board of directors, a post that last year earned her $50,000.
Gramm, an economist at the Mercatus Center at George Mason University, said
she doesn't recall talking with Enron about the exemption, which she
characterized as a routine matter triggered by an antitrust case involving
crude oil.
"It really didn't have anything to do with Enron or any specific company,"
said Gramm. "It had to do with a general market problem."
In granting the exemption, the CFTC accepted the industry's contention that
it shouldn't be subjected to the government's usual commodities regulation
because its markets are dominated by "large sophisticated commercial
entities" capable of protecting themselves - in short, that there would be no
little people to hurt.
At the time, then-CFTC commissioner Sheila Bair scoffed at the reasoning,
comparing energy traders to boiler room sales operations that had the
potential to violate federal anti-fraud laws.
"Is it really that much of burden on market participants (for the CFTC) to
retain a sliver of authority regarding fraudulent activity?" Bair wrote in a
dissenting opinion.
Wholesale electricity prices negotiated by the traders are eventually
compiled in quarterly reports and reviewed by the Federal Energy Regulatory
Commission. And while FERC by law is supposed to prevent unfair prices, a
majority of its commissioners have advocated a hands-off approach to
California's energy crisis, insisting that the market can correct itself.
That posture may finally be changing somewhat. On Wednesday in San Jose,
Calif., FERC chairman Curt Hebert told lawmakers that his agency hopes to
begin "monitoring and mitigating" the wholesale electricity market by May 1.
This could allow FERC to preemptively influence prices.
Energy economists who have studied the market see signs of ruthless, but
perfectly legal, behavior.
Paul Joskow, an MIT economist, concluded in January that electricity
producers deliberately withheld power to drive up prices.
"Every business exercises market power when it can, so I don't know why
people are so surprised that (the generators) used their market power,"
Joskow said. "I didn't see any evidence of collusion in what they did ... It
was just good business."
Enron's specific trading methods remain a mystery even to industry analysts,
partly because the company considers its techniques to be proprietary. But it
yielded a big payoff last year - an operating profit of $1.6 billion, up 160
percent from $628 million in 1999.
When electricity and natural gas prices soared to record highs in the fourth
quarter, Enron's trading profit more than tripled to $538 million.
Without providing specifics, Enron officials said the profits poured in from
all over the country.
"Our success is linked to efficient markets, not higher prices in California,
or anywhere else for that matter," Steve Kean, an Enron executive vice
president, said in January testimony before the U.S. Senate. "What we are
interested in is competitive and well-functioning markets. Our financial
success is not built on California's back."
End advance for release Wednesday, April 18

AP Photo FX101 of April 16, AP Graphic POWER PLAYERS

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

Nigeria's electricity firm 'anxious' for US power project

04/18/2001
Agence France-Presse
(Copyright 2001)

LAGOS, April 18 (AFP) - Nigeria's state-run electricity company NEPA is
anxiously awaiting the launch of a US power project in the economic capital
Lagos, officials said Wednesday.
The US firm Enron was due to have begun supplying electricity to the city
grid in December, but the project has yet to take off.
Authorities in Lagos, Nigeria's largest city, had blamed the National
Electric Power Authority (NEPA) for the delay, saying the company was
"frustrating" the independent power project.
But NEPA said in a statement Wednesday: "We are very anxious to see the
project through. No one wants to stop that kind of project. It should be
implemented religiously. We won't compromise standards, however."
The deal to supply electricity to the city grid was signed in December 1999
between Lagos State, NEPA and the US power group Enron Inc.
Under the terms of the agreement, Enron was expected to complete the first
phase of the project by December last year.
Enron was to supply 90 megawatts of electricity to the city in the first
phase and increase it to 270 megawatts by August from barges floated on the
Lagos lagoon.
joa/gd

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

US Government Issues Warning Letter to Italy's DeLonghi S.p.A.,
NetCompliance, Inc., Reveals

04/18/2001
Business Wire
(Copyright (c) 2001, Business Wire)

WASHINGTON--(BUSINESS WIRE)--April 18, 2001--In part because a US laboratory
employee was "almost electrocuted" during a compliance test, DeLonghi S.p.A.
of Treviso, Italy - a European producer of electrical kitchen appliances -
was warned in March its products would be detained by the US government from
coming into America, according to a federal document revealed by
NetCompliance, Inc., (www.netcompliance.com), a leading Internet provider of
"paperless" compliance solutions, online worker training programs, safety
equipment, and up-to-the-minute regulatory information.
According to NetCompliance, Inc., the US government's Center for Devices and
Radiological Health said last month one of its testers "was almost
electrocuted" during the initial startup of compliance testing of a Delonghi
microwave oven. The government said it was also concerned that two engineers
from Delonghi S.p.A.'s Italy facility "failed to adequately train and
supervise repair and final test personnel properly" at DeLonghi's New Jersey
warehouse, which was visited by the government in February. DeLonghi America
is located in Saddle Brook, New Jersey. The government added DeLonghi "is
being placed on the import detention list and its products will be
automatically detained at port of entry" until the issues were resolved.
Copies of the US government decision are available upon request from
NetCompliance, Inc at 703/534-5022 or by email at info@netcompliance.com.
Through its eComply(TM) technology engine, NetCompliance affords
international companies a better, cheaper, and faster way to determine
compliance needs, meet training requirements, obtain specialized products and
services, and become aware of and manage regulatory-related information to
government agencies. Begun in 1998, NetCompliance's client list has included
such companies and organizations as: Enron, Caesar's Palace, Duke Engineering
and Services, Boise Cascade, Weyerhaeuser, Surgical Synergies, and Nebraska
Health Systems, among others. NetCompliance is a member of the Advisory
Committee to the US Congressional Internet Caucus, which includes other
stellar companies such as Microsoft, MCI, IBM, and AOL.

www.netcompliance.com
info@netcompliance.com

CONTACT: NetCompliance, Inc. Michael J. Volpe, 703/534-5022
mvolpe@netcompliance.com
02:32 EDT APRIL 18, 2001

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

CHIEF MINISTER OF INDIA'S MAHARASHTRA WRITES TO PM ON ENRON

04/18/2001
Asia Pulse
(c) Copyright 2001 Asia Pulse PTE Ltd.

MUMBAI (WESTERN METROPOLIS), April 18 Asia Pulse - The chief minister of
India's western state of Maharashtra, Vilasrao Deshmukh, on Tuesday sent a
letter to the prime minister, Atal Bihari Vajpayee, in connection with the
report of the Godbole committee that has recommended renegotiations with the
Enron promoted Dabhol Power Company (DPC) to reduce its tariff.
In the letter, Deshmukh has suggested setting up of a committee comprising
representatives of the centre, Maharashtra government, State Electricity
Board (MSEB) and National Thermal Power Corporation (NTPC) in keeping with
the Godbole panel's submissions, to work out framework of renegotiation with
the US energy major, official sources told PTI here.
The high power panel formed by Maharashtra government to review the
controversial project, headed by the former federal home secretary, Madhav
Godbole, had in its report criticised the approval granted to the Enron at
various stages by both the state and central government.
The report was tabled in the state legislature last week.
(PTI)P 18-04 1715

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

India: Enron slaps two more arbitration notices

04/18/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) -
Asia Intelligence Wire

MUMBAI, April 17. ENRON'S Dabhol Power Company (DPC) has issued two more
notices of arbitration to the Maharashtra Government. This is a third such
international arbitration notice that the State Government and Maharashtra
State Electricity Board are facing.
While the first notice was issued for failure to honour the December 2000 and
January 2001 bills along with interest, the two fresh notices are for
failures to honour the Maharashtra's 'State support agreement' and the
"Supplemental State Support Agreement."
According to Enron, the State Government has gone back on its commitment to
provide clearances and support for "further development and completion" of
the Dabhol project as per the State support agreement signed in June 1994.
The third notice claims the Government has not supplied "additional support"
needed for completion of DPC as per the supplemental State support agreement
signed in 1996.
"They (DPC) have claimed that we have gone back on our word when clearances
to their second phase trial runs were denied by the Maharashtra Pollution
Control Board hampering completion of their project," the official said.
"The Maharashtra Government has acted in a manner inconsistent with the (two)
agreements. The Maharashtra Government's actions have adversely and
materially impacted DPC's ability to perform under its contractual
agreements," Enron officials said.
A three-person panel will now be set up to solve the dispute in the London
Court of Arbitration. Enron has appointed Honourable Andrew John Rogers,
former Chief Judge Commercial Division, Supreme Court of New South Wales as
their arbitrator.
The State Government will have to reply this notice within 30 days and
appoint an arbitrator who cannot be an Indian national.
The State Government officials have expressed surprise at the notice of
arbitration for dishonouring of the December 2000 (Rs 102 crore) dues along
with the January 2001 (Rs 111.6 crore), considering the conciliation process
with Government of India is already in place.
"Actually they should not be allowed to contest the Rs 102 crore December
bill on two fora simultaneously because there is an ongoing conciliation
process with the Centre. But they can take recourse to redressals in
different fora," the State Government official said.
The State Government is considering ways of clubbing the two processes
together. "It (conciliation and arbitration for the December bill) should be
clubbed together. Considering this may give rise to a technically queasy
situation if the Maharashtra Government wins one case and Centre has to go
back on another," the official said.
The Union Government was issued the notices of conciliation and arbitration
by DPC. The Government chose the conciliation route for which Mr Jeevan
Reddy, Chairman of the Law Commission has been appointed conciliator.
Meanwhile, the Maharashtra Government officials said, "The State maintains
that the December and January bills are not payable but adjustable against
available rebate of Rs 401 crore."
It is not clear whether the State will have to appoint different arbitrators
for the three notices. "All we know is that we will have to spend huge
amounts on answering the notices and paying the arbitrators," the official
said.
Archana Chaudhary

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

USA: WRAPUP1-Calif. utility has huge loss, Texans strike it rich.
By Nigel Hunt

04/17/2001
Reuters English News Service
(C) Reuters Limited 2001.

LOS ANGELES, April 17 (Reuters) - It was a day of major profit and even
bigger loss in the U.S. electricity industry.
California's second largest utility on Tuesday followed its bigger rival in
reporting a multi-billion dollar loss because of the state's power crisis but
two of the Texas-based companies that sell electricity to the state announced
sharply increased profits.
Edison International, parent of utility Southern California Edison, said it
was taking an after-tax charge of $2.5 billion for skyrocketing power
purchase costs that it has not been allowed to pass on to its customers.
On Monday, PG&E Corp., parent of the state's largest utility, Pacific Gas and
Electric, announced it was taking a massive after-tax charge of $4.1 billion
after running up even greater costs.
In Texas, however, sharply higher profits were reported by two Houston-based
energy giants, Enron Corp and Dynegy Inc. Shares in another Houston-based
giant, Reliant Energy, were meanwhile continuing to rise after reporting much
higher than expected earnings the previous day.
"We are envious," Edison International chief financial officer Ted Craver
told a conference call while refusing to be drawn on whether he blamed the
Texans for his company's financial woes.
Prices for wholesale power in California started to skyrocket in late spring
2000 as buoyant demand linked to a strong economy threatened to outpace
supplies. The price hikes brought rich rewards for power generators and
marketers but financial disaster for the state's two leading utilities.
Pacific Gas & Electric, which has 13 million customers, filed for Chapter 11
bankruptcy protection on April 6 while Southern California Edison has only
survived by not paying many of its bills.
Southern California Edison, which has around 11 million customers, announced
on Tuesday that 17 lawsuits had been filed against the utility by small power
producers who had not been paid for months.
The utility said that it made its first payment to suppliers in months on
Tuesday, paying $199 million to operators of so-called Qualifying Facilities
to cover April deliveries although it still owes them an estimated $1.1
billion.
FINGERS POINTED AT TEXAS 'PIRATES'
Edison International reported a loss of $2.55 billion in the fourth quarter,
all but $28 million of which was related to the charge against earnings. The
prior day PG&E Corp. had reported a loss of $4.12 billion for the quarter.
Many fingers in California have pointed at the so-called "pirates" from Texas
as the culprits of California's power crisis, saying that the prices they
charge have in some cases risen tenfold in a year.
In March, affiliates of all three Houston-based companies were included on a
list of power providers ordered by federal regulators to pay refunds to
California utilities for overpriced wholesale power purchases made during
February.
Enron, North America's largest gas and electricity marketer and trader,
reported better-than-expected first quarter earnings of $406 million, or 47
cents per share, up from $338 million, or 40 cents a share, a year earlier.
The company also raised its 2001 earnings target range by 5 cents, to
$1.75-$1.80 per share. In January, the company said it expected to earn
$1.70-$1.75 per share.
Wholesale natural gas and electricity supplier Dynegy said its first-quarter
earnings rose 73 percent, driven by a strong performance from its core energy
marketing and trading business. Recurring net income, which excludes one-time
items, jumped to $137.5 million, or 41 cents per diluted share, from $79.4
million, or 26 cents, in first quarter 2000.
On Monday, Reliant reported first quarter earnings that flew past estimates.
Adjusted earnings per share climbed to 94 cents a share or $274 million, up
from 47 cents per share or $134 million a year earlier. Wall Street analysts'
had been expecting earnings of about 70 cents.

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

Texas Panel Cites Lessons From Calif Power Crisis

04/17/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

HOUSTON -(Dow Jones)- Most power market participants are confident that Texas
will avoid the disastrous mistakes seen in California as the Lone Star state
deregulates its retail electric industry Jan. 1, but lessons can be learned
from the west, said a panel of experts Tuesday.
"Don't place any bets that (the market) will look like the past," Ron
McNamara, an Enron (ENE) executive with previous experience in Australia and
New Zealand power markets, warned attendees at a one-day conference sponsored
by Gulf Coast Power Association.
"You don't know what commercial drivers will be in a year. Patterns will
change," said McNamara.
Judah Rose, senior vice president of ICF Consulting Group, said Texas'
isolation from the rest of the U.S. transmission grid and the clear authority
of the Texas Public Utility Commission are advantages Texas has over other
states as it moves to introduce competition.
The increase in generating supply in Texas, more than 14,000 new megawatts
between 1999 and 2002, is another critical difference between Texas and
California, Rose said.
"The lack of new power plants is the key to California's problems," he said.
"It will be a huge disappointment to free-market people like me if
(deregulation) doesn't work in Texas," said Rose.
Although Rose likes most aspects of the Texas market model, he said
regulators and market participants must be vigilant against the imposition of
price caps.
A $1,000 price cap for the small amount of ancillary services to be purchased
by the Independent System Operator in Texas was inserted by the PUC in final
market rules last month.
Lynn Lednicky, a senior vice president at Dynegy Marketing and Trade, a unit
of Dynegy Inc. (DYN), warned that Texas must learn from the California
calamity.
Texas must work to keep the ISO out of the market as occurred in California,
he said. "The ISO will take on a life of its own" once competition begins, he
predicted.
Texas must also be wary that market monitoring activity doesn't become
"market tinkering," he added. "We must be careful of the role of unintended
consequences."
Wholesale and retail markets must work together, he said. Texas, although
much less regulated by the Federal Energy Regulatory Commission than other
regions, must remember that "state and federal jurisdictional squabbles
matter.
"Isolation is dangerous for Texas," said Lednicky. "We might have a tendency
to forget that that jurisdictional squabbles can get in the way."
Enron's McNamara also warned of a coming storm between the needs of an open
market to send price signals and the temptation of the industry to retreat to
the safety of rules to ensure reliability of the power supply.
"We haven't settled that yet," he said.
Panelists differed on the need for a spot power market in Texas to provide
additional price information to complement the bilateral contract market.
They also disagreed on the need for congestion management pricing within the
Electric Reliability Council of Texas.
The Ercot ISO has recently defined three transmission zones within Ercot, but
Rose questioned whether there is sufficient information to determine if the
cost of grid congestion warrants a locational marginal pricing system in
Ercot such as the complex system used in the Pennsylvania-New Jersey-Maryland
power pool.

-By Eileen O'Grady, Dow Jones Newswires; 713-547-9213;
eileen.ogrady@dowjones.com

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

Business
Enron President & CEO - Interview
Mark Haines, Jerry Klauer

04/17/2001
CNBC/Dow Jones Business Video
(c) Copyright Federal Document Clearing House. All Rights Reserved.

MARK HAINES, CNBC ANCHOR, SQUAWK BOX: Energetic earnings from Enron. The
energy marketing and trading company reporting a 281 percent jump in revenues
for the quarter of $50 billion. Net income increased 20 percent to $406
million, $0.47 a share, $0.02 better than the estimates. The company also
raising its 2001 earnings target range by $0.05 to a $1.75 to $1.80 per
share. Enron trading low off its 52 week high of $0.91 a share. It has a year
low of 52 and as you can see, it`s down near that low of 59.
Is Enron en route to greater earnings? Joining us from Houston is Jeffrey
Skilling. He`s Enron`s CEO. And in fair disclosure terms, I will say that I
own shares of Enron and have for quite some time, more than a year. Mr.
Skilling, so what is driving your business here? Is it primarily the energy
shortage in the west?
JEFFREY SKILLING, PRESIDENT & CEO, ENRON: No, Mark. What`s going on just in
general is we have a tighter electricity and natural gas market than we have
had really in the last decade. What Enron sells is reliable delivery and
predictable price and so the value of the product we sell is just going up
right now.
HAINES: What sort of threat is there, if any, in the politicization of the
energy situation in the west?
SKILLING: Well, I think there is a big threat. If you look at what`s going on
in the west, in some of the proposals, the legislative proposals, and even
some of the legislative proposals in Washington, it would be enough to make
an economist cry. It is not a good situation. I think if people kind of keep
calm heads and let the market forces carry the day, I think everything will
come out fine. If we get intervention of a negative sort, it could be, it
could prolong the problem.
HAINES: Where does the bankruptcy of PG&E leave you? Are you a creditor
there?
SKILLING: We are a sizable creditor of PG&E. We have about $570 million of
gross receivables with PG&E. We are fully reserved and have some offsets for
that, but again, it is not good situation when the state allows a company
with a 100 year history to go bankrupt. It is kind of surprising.
JERRY KLAUER: Mr. Skilling this Jerry Klauer. Our firm happens to be very
positive on the energy outlook for the next five years, if not longer,
expecting the average price of crude to be 10 percent higher than during the
decade of the `90s and natural gas may be 40 to 50 percent higher. Are we too
optimistic in that outlook?
SKILLING: Well, I think right now in crude prices, OPEC is in a race with the
decline in the economy. The economy is pretty soft worldwide. OPEC is trying
to ratchet back production to keep up with likely adjustments in inventory.
So I think crude prices are likely to be pretty flat for the next couple of
years. Natural gas, on the other hand, is likely to be very strong. We are
clearly tight supplies in North America right now and there is no short term
solution to that, other than price increases to ration demand.
HAINES: One of the things you were getting into with a great deal of hoopla
was broadband trading. I`m not using the right word, but you know what I`m
talking about.
SKILLING: Yep.
HAINES: Do the recent developments in the telecom sector with the some CLECs
in trouble with the equipment sales falling off, is that having an impact on
a feed through to your business?
SKILLING: Well, we focused on the long haul bandwidth market, Mark, and we`re
trying to create a commodity market for bandwidth. We are convinced that that
market will be established. In fact, we have had a lot of success in creating
that market. Our entire strategy is predicated on a bandwidth glut. The
bandwidth business today, in my opinion, looks a lot like the natural gas
business looked in the mid 1980s, enormous oversupply, prices dropping,
suppliers in the industry in a lot of trouble. And that is what we are seeing
in the bandwidth market today and that is a classic case when the market can
be helpful. Markets can help create additional cash flows for companies. They
can make it possible for people to hedge positions, equipment positions and
fiber positions that they have taken. So from the standpoint of our business,
the outlook for the marketplace actually pretty good right now.
KLAUER: Mr. Skilling, Jerry Klauer again. Does the hedging effect that you
put on actually impact your earnings? Your revenues are up 281 percent and
your net income was up 20 percent, a great number. But, you know, there
should have been more leverage unless you had hedged a lot or some of your
newer businesses were lower margin. Could you comment on that?
SKILLING: Well, again, we are not a producer of natural gas. We produce some
electricity, but we basically are an intermediary. We are buying and selling
natural gas and power all across the world. And we make a margin on the
difference between what we purchase for and what we sell for. So we are
really not influenced by the commodity cycle. We have virtually no exposure
to commodity prices. What we are driven by, our earnings are driven by volume
increases and we have had, as you can tell from our numbers this quarter,
really strong, strong volume increases all across the world.
HAINES: All right, got to leave it there. Mr. Skilling, thank you very much
for your time. Appreciate it.
SKILLING: Thanks, Mark.
HAINES: Jeffrey Skilling is CEO of Enron.

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

Dynegy passes Street target
Marketing and trade power Q1 results

By Lisa Sanders, CBS.MarketWatch.com
Last Update: 5:37 PM ET Apr 17, 2001

HOUSTON (CBS.MW) - Dynegy reported a 73 percent increase in first-quarter
profit Tuesday as revenue almost tripled, the result of a booming marketing
and trading business.
Shares of Dynegy (DYN: news, msgs, alerts) added $2.80 to close at $55.95.
Those who deal in natural gas were expected to get a boost in the first
quarter, and Dynegy, based in Houston, realized expectations when it posted
income of $137.5 million, or 41 cents a share, which compares to $79.4
million, or 26 cents a share, during the year ago period. Sixteen analysts
polled by First Call/Thomson Financial expected Dynegy to earn 40 cents, on
average, in the first quarter.
"Dynegy is still showing a lot of growth, and they exceeded even their
revised expectations," said Mark Easterbrook, an energy analyst with Dain
Rauscher Wessels. "I think the stock will do well."
Also in the first quarter, revenue jumped to $14.2 billion from $5.3 billion
a year ago as operating margins improved to $477 million from $382.8 million
during the first quarter of 2000.
"We created significant value during a period of strong industry fundamentals
in both natural gas and power," said Chairman and CEO Chuck Watson in a
statement. "Furthermore, we captured opportunities generated by a return to
seasonal winter weather and the supply and demand imbalances that are
impacting multiple energy commodities."
Dynegy reported a 99 percent jump in profit from the marketing and trade
division to $100.3 million from $50.3 million a year ago. The first quarter
results from the segment account for 73 percent of Dynegy's net income.
Dynegy, which, like Reliant Energy (REI: news, msgs, alerts) , Mirant (MIR:
news, msgs, alerts) , and Duke Energy (DUK: news, msgs, alerts) , is owed
money for power sales to the California energy market, said that its West
Coast Power joint venture has mitigated its future credit exposure in the
state through its agreement with the Department of Water Resources to provide
2,300 megawatts of energy through 2004.
In the conference call, Watson characterized California's energy crisis as a
failure to deregulate. He said he believed that a solution to the problem
would be reached given some of the recent progress in the matter. Most see
the recent decision by Southern California Edison, a division of Edison
International (EIX: news, msgs, alerts) , to sell its transmission lines to
the state for $2.76 billion and use the proceeds to repay its creditors as a
positive development. SoCalEd is severely in debt because of the problems
with deregulation in California.
As Enron did earlier Tuesday, Dynegy CFO Robert Doty declined to disclose the
level of reserves the company has taken to account for past power purchases
into California. Doty said revealing the reserve amount would put the company
at a competitive disadvantage. According to the company's most recent 10-K
filing with the Securities and Exchange Commission, Dynegy receivables
related to California stood at about $265 million.
In other areas, midstream operations showed a decline in its profit to $22.9
million from $24.2 million a year ago. During the first quarter of 2000,
results were impacted by the sale of assets. Excluding the sale, first
quarter 2001 earnings exceeded that of the year ago period by $4 million.
Meanwhile, income from Illinois Power, the company's transmission and
distribution unit, benefited from cost reductions and market demand. Profit
rose to $25.9 million from $4.9 million a year ago.
Also, Dynegy's start-up communications business - Dynegy Global
Communications - posted a loss of $11.6 million, or 3 cents a share, due to
expenses associated with establishing the unit that provides wholesale
bandwidth.
"This will help us to achieve our goal of providing bandwidth on demand
around the world," Watson said in the conference call.
Watson closed by saying he was very bullish on the company's outlook for
2001.
Lisa Sanders is a Dallas-based reporter for CBS.MarketWatch.com.

Enron, Duke, Dynegy 1st-Qtr Profits Rise as Energy Sales Surge
2001-04-17 18:37 (New York)

Enron, Duke, Dynegy 1st-Qtr Profits Rise as Energy Sales Surge

     Houston, April 17 (Bloomberg) -- Enron Corp., the largest
energy trader, and rivals Duke Energy Corp. and Dynegy Inc. said
first-quarter profit rose, driven by soaring sales of electricity
and natural gas.
     Enron's profit from operations rose 20 percent to $406
million as sales almost quadrupled to $50.1 billion. Duke's profit
from operations rose 54 percent to $554 million, and sales more
than doubled to $16.5 billion. Dynegy's profit from operations
rose 73 percent to $137.5 million, while sales more than doubled
to $14.2 billion.
     Enron sold 90 percent more power and 32 percent more gas in
North America than in the year earlier as prices surged.
Dynegy's electricity sales and production rose 19 percent to 26.1
million megawatt-hours. Duke's trading and generation profit
before interest and taxes more than quadrupled to $348 million.
     ``The market is perfect for a trader and marketer,''
Commerzbank Capital Markets Co. analyst Andre Meade said. ``Volume
is growing, prices are high and prices are volatile.''
     The average price of gas last quarter more than doubled from
a year ago, and electricity prices in the west, which accounted
for about one-fifth of Enron's power-sales increase, rose
ninefold.
     Enron raised its 2001 profit forecast to $1.75 to $1.80 a
share from its January projection of $1.70 to $1.75. Dynegy's
profit probably will get a boost later this year from power sales
in New York state, where it bought plants that can produce 1,700
megawatts, or enough to light 1.7 million U.S. homes, analysts
said.

                            California

     Reliant Energy Inc., the owner of Houston's utility and a
power supplier in California and other states, said yesterday
first-quarter earnings more than doubled on higher profit from
energy-trading and gas businesses. Its trading unit had a
operating profit of $216 million compared with a $22 million loss
a year earlier.
     Soaring power prices pushed California's largest utility into
bankruptcy court and may cost the state as much as $70 billion in
electricity-buying costs this year, lawmakers have said. Most of
that money goes to ``out-of-state generators'' accused of ``price
gouging'' by Governor Gray Davis. The generators repeatedly have
denied they've manipulated California's market.
     Other companies with large trading groups have said they made
more money last quarter than expected. They include Williams Cos.,
a gas pipeline company that's become one of the largest U.S.
energy traders; Calpine Corp., an electricity generator and power-
plant developer; Avista Corp., owner of utilities in the U.S.
Northwest; and Mirant Corp, formerly called Southern Energy Inc.
     Reliant, Dynegy and Enron are based in Houston. Mirant is
based in Atlanta. Williams is based in Tulsa, Oklahoma.
     Shares of Enron rose 56 cents to $60. Dynegy rose $2.80 to
$55.95. Duke, based in Charlotte, rose $2.09 to $44.60. Calpine,
based in San Jose, California, rose $1.30 to $54.56. Williams rose
1 cent to $43.35. Mirant rose 55 cents to $34.50. Avista, based in
Spokane, Washington, rose 36 cents to $18.53.

                               Enron

     Once just a natural-gas pipeline company, Enron has spent
more than a decade creating a trading operation that buys power,
gas and other commodities and resells them to utilities and other
large consumers, a business made possible by deregulation of U.S.
energy markets in the 1980s and 1990s.
     As a result, the company's sales have risen an average of 66
percent annually for the past five years. Enron had 2000 revenue
of $101 billion, making it the second-largest U.S. energy company
behind Exxon Mobil Corp. Revenue will be as much as $170 billion
this year, Chief Executive Officer Jeff Skilling estimated in
March.
     Enron's business in energy-services contracts has escalated
as a result of California's power crisis. Skilling has said demand
is increasing as companies look to cut energy costs and protect
themselves from the risks of energy-price movements.
     Contracts increased nearly 60 percent to $5.9 billion in the
quarter. Enron, which recently signed contracts with Owens-
Illinois Inc., Quaker Oats Co. and Eli Lilly & Co., manages energy
buying and consumption at more than 31,000 sites. It is the
largest manager of customer energy assets, Skilling said.

                             Broadband

     Enron's broadband unit, set up to build a U.S. fiber-optic
network and help trade space on such networks, had a quarterly
loss of $35 million on revenue of $83 million. It broke even a
year earlier. Enron added 70 broadband customers in the latest
quarter, for a total of 120.
     Shares of Enron fell 11 percent on March 12 after the
collapse of an agreement for Blockbuster Inc., the world's largest
video-store chain, to deliver movies on demand over Enron's fiber-
optic system. The shares continued to fall on speculation Enron
would exit the broadband business, analysts said. Enron denied the
speculation.
     Dynegy's new Global Communications division, which markets
and trades broadband, had a $11.6 million loss from start-up and
expansion costs.
     Profit from processing and marketing natural-gas liquids fell
5.4 percent to $22.9 million. Last year's profit included about $4
million from assets that have been sold.
     Profit at Dynegy's Illinois Power utility, with 650,000 gas
and power customers in southern Illinois, more than quintupled to
$25.9 million on cost reductions and higher winter demand.

Enron earnings jump by 20%
Financial Times.com, April 17, 2001
By Julie Earle and Jenny Wiggins in New York
Published: April 17 2001 13:02GMT | Last Updated: April 17 2001 22:18GMT

Enron, the power company, unveiled a 20 per cent increase in first-quarter
earnings, fuelled by strong demand in its wholesale gas and power business,
particularly in North America and Europe.
The Houston-based company, which markets and trades natural gas and power,
also said it would be interested in selling its majority stake in the $3bn
Dabhol power project in India.
Earnings were $406m, or 47 cents a share, in the first quarter, against
$338m, or 40 cents, a year earlier, beating expectations of 45 cents. Enron
said it would raise its 2001 earnings target by 5 cents to $1.80 a share,
based on a positive outlook for the rest of the year.
"It is a sellers' market," said Jeff Skilling, chief executive. "We are
continuing to see strong growth in all markets - in North America, in Europe,
in Australia, across the board." Revenues jumped from $13.1bn to $50.1bn, a
rise of 281 per cent. In the quarter, Enron increased energy volumes by 65
per cent to 69,000bn British thermal unit equivalents per day, and reported a
60 per cent increase in new retail energy contracts to $5.9bn. Income from
the wholesale energy business, which includes buying and selling commodities,
jumped 76 per cent to $755m.
Enron Online, the electronic trading platform, was also a strong contributor,
but the internet business reported a loss of $35m for the quarter. In an
interview, Mr Skilling said Enron would be interested in talking to potential
buyers for its $900m interest in the Dabhol project. Enron has been locked in
an ongoing payments dispute with the Bombay facility and has warned it could
withdraw from the project.
"India is identical to the California situation except that we have a
government guarantee for payment," he said. On California, Mr Skilling said
Enron was owed $580m by Pacific Gas & Electric, which declared bankruptcy
this month.
But Standard & Poor's on Tuesday affirmed its BBB+ senior credit rating on
Enron, and said the rating was not affected by reports of its exposure to
PG&E.
Enron's shares closed 56 cents, or 9 per cent up, at $60.00 on Tuesday after
climbing as high as $61.37.
Meanwhile, Dynergy, a gas and electricity supplier, said its first-quarter
earnings rose 73 per cent, driven by a strong performance from its core
energy marketing and trading business.


FYI
-----Original Message-----
From: Brownfeld, Gail
Sent: Friday, October 12, 2001 10:01 AM
To: Sanders, Richard B.
Subject: FW: York Paper v. Enron/Holzer

FYI

-----Original Message-----
From: Clothier, Robert
Sent: Thu 10/11/2001 10:51 AM
To: Brownfeld, Gail
Cc: Klein, Samuel; Dubas, Jennifer
Subject: York Paper v. Enron/Holzer

Privileged and Confidential

Gail,

I had a productive conversation with Keith Dutill, the Stradley lawyer who
I've known for decades and who is now representing York Paper.

The short of it is that he said he is very interested in trying to resolve
this before the litigation machinery cranks up.  He will discuss it with his
client and get back to me.  He said that York has "strong feelings" and then
agreed with me that Enron feels the same way.  He felt that York has a "good
business sense" and would be interested in reaching a compromise without
spending a lot of dollars in legal fees.

Dutill does not know why two separate summons were filed in Delaware County.
It's his understanding that the claims against Enron are largely the same as
the claims against Holzer (with perhaps one or two exceptions that still
relate to Holzer's employment with Enron).  He is working on a complaint
that will cover both summons, and expects to file it in the next several
weeks, certainly before the mediation conference on November 19th.  I said
that we should try to start our own discussions before that mediation
conference so that the mediator could focus on any areas of disagreement.

Here's how Dutill described York's claims:  Holzer worked for York Paper.
When Holzer left York, York wanted to prevent Holzer from working for Enron.
Holzer wanted to work for Enron, and so did Enron, so there was some
"agreement" between Holzer/Enron and York.  In that "agreement", Holzer and
Enron made "promises" about the way they "would do business" with York.  It
appears that the promise was that Holzer and Enron would not bypass York
Paper and deal directly with York Paper's customers.  Yet, according to
Dutill, that is what Holzer and Enron did -- cut out York Paper as the
middle man.  This has resulted in a "fair erosion of business" for York
Paper.  It is "not just a matter of subsequent solicitation."  It also
involves "interference with existing contracts" between York and its
customers.

So, it would seem that York's claims might include breach of contract,
interference with contractual relations and, perhaps,
misrepresentation/fraud.  Interestingly, he did not mention any of the West
Coast and Garden State Paper contracts we have been looking into.

If you have any thoughts, please let me know.  I will keep you informed of
any further developments.

Bob

Dechert
215-994-2714
215-994-2222 (fax)
robert.clothier@dechert.com

> The information contained in this e-mail message and any attachment(s)
> hereto is legally privileged and confidential information intended only
> for the use of the individual or entity named above. If you are not the
> intended recipient, you are hereby notified that you should not further
> disseminate, distribute or copy this message. In addition, if you have
> received this message in error, please notify us immediately by collect
> telephone call (215-994-2714). Thank you.
>
>


we'll try to get a copy of gary's comments
----- Forwarded by Steven J Kean/NA/Enron on 12/04/2000 08:59 AM -----

	Maureen McVicker
	12/04/2000 08:48 AM

		 To: Steven J Kean/NA/Enron@Enron
		 cc:
		 Subject: Re: See Jeff Skilling's CNBC interview on IPTV

FYI -

----- Forwarded by Maureen McVicker/NA/Enron on 12/04/2000 08:48 AM -----

	Gary Hamel <ghamel@strategos.com>
	12/02/2000 06:27 AM
	Please respond to ghamel

		 To: Maureen.McVicker@enron.com
		 cc:
		 Subject: Re: See Jeff Skilling's CNBC interview on IPTV

You might be interested to know that I gave Enron a big plug last week when I
served as guest host on the evening
European news roundup broadcast from CNBC's London studios.

Gary.

Maureen.McVicker@enron.com wrote:

> >From Maureen McVicker (Steve Kean's Assistant)
>
> If you have any questions, please call me at 713-853-1808.
>
> ----- Forwarded by Maureen McVicker/NA/Enron on 12/01/2000 04:32 PM -----
>
>                     Public
>                     Relations            To:     All Enron Worldwide
>                     Sent by:             cc:
>                     Public               Subject:     See Jeff Skilling's
CNBC interview
>                     Relations            on IPTV
>
>
>                     12/01/2000
>                     03:19 PM
>
>
>
> (Embedded image moved to file: pic26924.pcx)        Public Relations
>
> Did you miss Jeff on CNBC "Street Signs" yesterday?  Not to worry.  Your
> ever benevolent communications team has arranged for Jeff's interview to be
> played on an IPTV webcast.  Just point your browser to
> http://iptv.enron.com, click the link for special events, and then choose
> "Skilling CNBC."  The interview will be available every ten minutes through
> Wednesday, Dec. 6.
>
>   ------------------------------------------------------------------------
>                    Name: pic26924.pcx
>    pic26924.pcx    Type: Corel PHOTO-PAINT 6.0 Image
(application/x-unknown-content-type-CorelPhotoPaint.Image.6)
>                Encoding: base64


Kay, please forward to Scott Josey, John C Thompson and Julie Murray.  I
could not find them on e-mail.

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 07/10/2000
02:27 PM ---------------------------

David W Delainey
07/10/2000 02:31 PM
To: Jeffrey A Shankman/HOU/ECT@ECT, Kevin M Presto/HOU/ECT@ECT, Tim
Belden/HOU/ECT@ECT, Gary Hickerson/HOU/ECT@ECT, George McClellan/HOU/ECT@ECT,
Jere C Overdyke/HOU/ECT@ECT, John J Lavorato/Corp/Enron@Enron, Janet R
Dietrich/HOU/ECT@ECT, W David Duran/HOU/ECT@ECT, Christopher F
Calger/PDX/ECT@ECT, Raymond Bowen/HOU/ECT@ECT, James A Ajello/HOU/ECT@ECT,
Rodney Malcolm/HOU/ECT@ECT, Edward Ondarza/HOU/ECT@ECT, Rob
Milnthorp/CAL/ECT@ECT, Brian Redmond/HOU/ECT@ECT, Jean Mrha/NA/Enron@Enron,
Max Yzaguirre/NA/Enron@ENRON, Jeff Donahue/HOU/ECT@ECT
cc: Mark Frevert/NA/Enron@Enron, David W Delainey/HOU/ECT@ECT, David
Oxley/HOU/ECT@ECT, Kay Chapman/HOU/ECT@ECT, Sally Beck/HOU/ECT@ECT, Mark E
Haedicke/HOU/ECT@ECT, Beth Perlman/HOU/ECT@ECT, Jordan Mintz/HOU/ECT@ECT, Wes
Colwell/HOU/ECT@ECT
Subject: PRC

I would like to thank all of you for putting quality time and effort into
this important process.  There is nothing more important to ENA than
attracting and retaining the most talanted and innovative people.

Effectively immediately, written and oral feedback for commercial managers
and directors can be delivered. As per our discussion, the PRC process is
primarily a feedback, performance management and staff planning tool.  It
provides a data point for bonus purposes; however, it is not the only
determinant.  In the interest of ensuring the most effective performance
management tool, I would suggest that we implement the following:
 a)For employees ranked in the strong and above categories, the ultimate
ranking should not be communicated and the message should focus on progress
towards identified commercial goals and objectives and progress towards the
further development of desirable leadership and commerical capabilities.
Written and oral feedback should be delivered immediately;
 b) For employees ranked in the satisfactory, needs improvement and issues
category, the ultimate ranking should be communicated to ensure approriate
documentation of performance and to stimulate a plan to rectify or cure
performance issues.  For the satisfactory category, the message should focus
on increasing deal-flow, financial performance and productivity.  The bar is
always being raised.  For the needs improvement category, the message should
focus on turning around poor performance over the next six months.  For the
issues category, the business unit manager should determine, in conjunction
with your HR rep., the appropriate plan to find a better "fit" in the
organization or counsel out.  Regardless, the ENA Office of the Chairman will
require a written plan of action for all employees in the needs improvement
and issues category from the business unit manager documenting the plan of
action to rectify performance.

Vice President ranking can not be communicated until after the Enron VP PRC
currently scheduled for July 31st.  I anticipate a similar process as above
with our officer feedback process.  Associate and Analyst rankings can not be
communicated until after the Enron A&A PRC currently scheduled for July 19th.

Other identified action items from the meetings include:
 a) the HR group will put together a "profile and performance book" for ENA's
A&A's to ensure our representatives can augment performance information at
the July 19th meeting;
 b) ENA will be aggressively attempting to retain highest performing A&A's to
continue rotating within ENA;
 c) ENA will be holding an additional "off-cycle" A&A super-saturday for
Houston and Portland in August to augment our capabilities in this area;
 and d) your HR representative is building a pipeline of outside employment
candidates for your review each week.  Please review these resumes in a
timely basis and let them know your interest or lack thereof.

Please communicate to your organization as appropriate.

Regards
Mark and Dave