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Enron Mail |
Bankruptcy won't be felt here: Hydro California firm owes$200 million to B.C.
Winnipeg Free Press, 04/09/01 Enron Broadband to Cut Jobs. The Oil Daily, 04/09/01 PG&E Parent Files for Bankruptcy to Recover $9 Billion in Costs. The Oil Daily, 04/09/01 Enron India Moves To Protect Dabhol From Political Action Dow Jones International News, 04/09/01 Enron sends political force majeure notice to Indian electricity board AFX News, 04/09/01 INDIA: Enron's Indian unit cites political force majeure. Reuters English News Service, 04/09/01 Enron affiliate up for contract also up for sale Houston Chronicle, 04/09/01 City Bankruptcy won't be felt here: Hydro California firm owes$200 million to B.C. Staff Reporter 04/09/2001 Winnipeg Free Press Metro a4 All material Copyright © Bell Globemedia Publishing Inc. and its licensors. All rights reserved. While Manitoba Hydro earns more than $1 million a day through electricity exports to the U.S., officials say the collapse of California's Pacific Gas & Electric will not affect its operations. "There's no direct impact," spokesman Glenn Schneider said yesterday. PG&E last week became the biggest public utility in U.S. history to file for bankruptcy. It owes more than $200 million to B.C. Hydro and $28 million to Calgary-based Enron Canada Corp. Manitoba Hydro doesn't export power to the west coast. But it does do a lot of business in the U.S. Exports resulted in record revenues of $376 million for Manitoba Hydro in the last fiscal year. And sales to the United States for the first six months of the current year totaled $261 million, compared to $203 million for the same period last year. It's anticipated that Manitoba Hydro will soon sign a deal with Xcel, formerly known as Northern States Power. The deal, worth over a billion dollars, would see Hydro supply Minnesota and other Midwestern states with 500 megawatts, which represents about 10 per cent of Hydro's maximum capacity. "We're still working out some of the legal language but there's no apparent roadblocks," Schneider said. He said forecasters in Minnesota predict demand for hydroelectricity will be strong for the next 10 to 15 years. In the meantime, Schneider said Manitoba Hydro has contacted some California-based companies to see if they'd be interested in relocating to Manitoba where they are assured of cheap, reliable power. "There's been some nibbles but it's a long-term process," he said. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron Broadband to Cut Jobs. 04/09/2001 The Oil Daily © 2001 Energy Intelligence Group. All rights reserved. Energy trading giant Enron said Friday it will eliminate some 250, or roughly 20%, of the jobs at its broadband telecommunications unit, detailing a move that it has previously described as an internal redeployment of staff. Enron Broadband Services spokeswoman Kelly Kimberly said the company is cutting jobs at the unit, which now employs 1,150 people, because it has completed the building of its 18,000-mile fiber-optic network and because of slow demand for streaming media products delivered to personal computers, such as video of corporate events. The job cuts also reflect Enron Broadband's decision to play a less-active role in streaming media services. However, Kimberly said Enron Broadband will continue to pursue entertainment-on-demand services actively. Kimberly said employees whose jobs are being eliminated will be eligible for redeployment to other positions at Enron Broadband Services or other Enron units, although some could lose their jobs. © Copyright 2001. The Oil Daily Co. For more infomation, call 800-999-2718 (in U.S.) or 202-662-0700 (outside U.S.). Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. PG&E Parent Files for Bankruptcy to Recover $9 Billion in Costs. 04/09/2001 The Oil Daily © 2001 Energy Intelligence Group. All rights reserved. After months of warnings about its precarious financial situation, Pacific Gas and Electric, the utility unit of PG&E Corp., on Friday filed for reorganization under Chapter 11 of the US Bankruptcy Code. Company executives said during a teleconference they believe the bankruptcy court will provide a fair and stable venue for resolving the financial crisis caused by more than $9 billion in uncollected costs for power purchases. Under California's flawed deregulation plan, wholesale power costs move with the market, but the resale price to consumers is at a fixed rate. "The regulatory and political processes have failed us, and now we are turning to the court," said Robert D. Glynn Jr., chairman of both PG&E Corp. and the utility. Even though the state in January took over the power purchase function from Pacific Gas & Electric and Southern California Edison, the electric utility subsidiary of Edison International, Pacific Gas & Electric continues to accrue unreimbursed costs at the rate of $300 million per month from purchases made by the California Independent System Operator on its behalf. In addition, Pacific Gas & Electric said continuing decisions by the California Public Utilities Commission (CPUC) have left the company at an economic disadvantage because of their failure to address the unrecovered costs issue. CPUC orders imposed new payment obligations on the company and thereby undermined its ability to return to financial viability. The CPUC also adopted what Pacific Gas & Electric described as "an illegal and retroactive accounting change that would appear to eliminate our true uncollected wholesale costs." Finally, the company said it recognized "the now unmistakable fact that negotiations with Gov. Gray Davis and his representatives are going nowhere." Glynn and Gordon R. Smith, president and chief executive of the utility, said they watched Davis' televised speech Thursday night, but they heard nothing that encouraged them that the state was going to address the unrecovered costs issue. The governor proposed a rate increase of up to 34.5%, but said those customers whose consumption dropped or remained flat likely would see no increase in their bills. The action would affect customers of San Diego Gas & Electric, which is financially healthy, as well as Pacific Gas & Electric and Southern California Edison. Davis presented his plan as an alternative to the rate hike proposed last month by the California Public Utilities Commission, which is seeking boosts of more than 40%. Trading in PG&E common stock was halted shortly before the bankruptcy announcement was made. At that time, PG&E was off only 2? to $11.36. When trading resumed, PG&E plunged to less than $7/share. Edison International took a big hit, falling more than 35% to $8 shortly before the close of trading. Edison said it has no plans to put its utility into bankruptcy. Major power suppliers to California also saw their stocks dive initially, but most recovered some of the losses before the end of trading. Duke Energy, Dynegy, Enron, Mirant, Reliant Energy, and Williams Cos. were off between 2%-5%. El Paso actually was up slightly. Barbara Shook. © Copyright 2001. The Oil Daily Co. For more infomation, call 800-999-2718 (in U.S.) or 202-662-0700 (outside U.S.). Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron India Moves To Protect Dabhol From Political Action 04/09/2001 Dow Jones International News (Copyright © 2001, Dow Jones & Company, Inc.) NEW DELHI -(Dow Jones)- In a new twist in the ongoing saga between the Dabhol Power Co. and India's Maharashtra State Electricity Board, the company Monday sent the Board a notice of political force majeure to enforce its rights under a 1995 power purchase agreement between the two parties. "I can confirm that Dabhol Power Co. has sent the MSEB a notice of political force majeure," said Jimmy Mogul, Enron India spokesman, in a faxed company statement. Essentially, this move is to protect DPC from being penalized by the State Electricity Board if political uncertainties interrupt its power supply to the Board. A subsidiary of U.S. energy major Enron Corp. (ENE), DPC has a controlling 65% stake in the controversial joint-venture 2,184 megawatt electric power project in the western Indian state of Maharashtra, that supplies power to the state-run electricity board. The DPC statement said: The political force majeure indicates that the concerted, deliberate and politically motivated actions of the Government of Maharashtra, Government of India and MSEB have or potentially will have a material and adverse effect on DPC's ability to perform obligations under the Power Purchase Agreement. "Given the cumulative effect of these political actions, DPC determined that the political force majeure declaration is the appropriate mechanism for providing that notice, and that it is an appropriate and necessary step in protecting DPC and its stakeholders' rights," the statement added. So far, there has been no reaction from the MSEB or the Maharashtra state government. Earlier this month, the Indian unit of Enron Corp. had issued a notice to the Indian government in a bid to recover 1.02 billion rupees ($1=INR46.55) owed for supplying power to MSEB. This dispute will be taken to the Court of Arbitration in London. For its part, the MSEB said it wanted the power bill offset against a INR4 billion fine it levied on DPC for what it said was the non-supply of power for intermittent periods between October 2000 and the end of January. The Indian government has asked the two sides to sort out the dispute before it would consider covering any of the payment from the federal government. Under a 1996 counter guarantee agreement, the federal government is obliged to pay Enron when MSEB defaults. Critics object to Dabhol charging INR7.1 a kilowatt hour for its power versus INR1.5 charged by other suppliers. Dabhol, India's largest private power plant currently under construction, was scheduled for commissioning in two phases. The project's first phase, a 740-megawatt power plant, has already been commissioned and phase two is due to be completed later this year. -By Himendra Kumar; Dow Jones Newswires; 91-11-461-9427; himendra.kumar@dowjones.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron sends political force majeure notice to Indian electricity board 04/09/2001 AFX News © 2001 by AFP-Extel News Ltd BOMBAY (AFX) - Enron Power Corp sent a political "force majeure" notice to the state-run electricity board of India's Maharashtra state on Saturday, officials said. The move means Enron is putting the state and federal governments on notice that it might be unable to discharge its contractual obligations to the Maharashtra State Electricity Board (MSEB) due to domestic political events beyond its control. Enron subsidiary Dabhol Power Co is putting up a 3 bln usd, two-part power plant - the largest U.S. investment project in India - at the port town of Dabhol some 200 kilometres south of Bombay. The first part of the project began generating 714 megawatts of electricity in May 1999. The power is sold to the MSEB under a power purchase agreement signed in 1993. "The Dabhol Power Co has sent MSEB a notice of political force majeure. This was one of the steps necessary ... to enforce our rights," DPC spokesman Jimmy Mogal said. Mogal said the notice was given to MSEB on Saturday. "The notice indicates that the concerted, deliberate and politically motivated actions of the government of Maharashtra, government of India and MSEB have or potentially will have a material and adverse effect on (our) ability to perform our obligations." Enron last week issued an arbitration and conciliation notice to the local and federal governments to recover 1 bln rupees due from MSEB's December bill. Enron and the state government disagree regarding the cost of electricity from the Dabhol plant. The state government insists the cost is unaffordable and has set up a panel to review the project, while Enron says the government must honour the contract. The Enron deal was signed in 1993, but was scrapped in 1995 by the state's newly installed Hindu nationalist government. The project was renegotiated the same year and the first part of the power plant began generating electricity in 1999. Construction for phase two is on-going, but opposition to the project has resurfaced from the present Congress party-led coalition government. jr/ For more information and to contact AFX: www.afxnews.com and www.afxpress.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. INDIA: Enron's Indian unit cites political force majeure. 04/09/2001 Reuters English News Service (C) Reuters Limited 2001. BOMBAY, April 9 (Reuters) - The Indian unit of U.S. energy giant Enron Corp said on Monday that it has sent the Maharashtra state utility a notice of political force majeure. Enron and the Indian government have been sparring over the past few months over the Maharashtra State Electricity Board's (MSEB) repeated default on payments owed to Dabhol Power Company (DPC), which is 65 percent owned by Houstan-based Enron Corp. "This step was to protect DPC. The issue of claiming a relief will be considered when appropriate," said a DPC spokesman. He declined to elaborate further. Political force majeure is any event or circumstance beyond the reasonable control of an affected party and which could not have been prevented by good industry practice. It forms a part of major financial contracts. Last week Enron notified the government it is applying to an arbitration court in London to consider its claim for 1.02 billion rupees ($21.88 million) owed by the MSEB for power it purchased in December from Dabhol Power Company. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. April 9, 2001 Houston Chronicle Enron affiliate up for contract also up for sale City learns status of Azurix just as call on water plant due By MARY FLOOD Copyright 2001 Houston Chronicle Azurix Corp., the troubled Enron affiliate vying for a $150 million water contract with the Houston Area Water Corp., is selling the part of the company that would handle the Lake Houston water plant. City officials were notified of the pending sale Friday, the last business day before today's meeting of the so-called Hawk, as the citizen board is known. The Hawk is expected today to pick one of three companies it would like to negotiate with on a design-build-operate contract for the plant. The plant will be the beginning of an expected $2 billion in expenditures to handle surface water in the Houston area. Diane Bazelides, spokeswoman for Azurix, confirmed Sunday that Amanda Martin, president of Azurix North America, informed the office of Mayor Lee Brown and the attorney for the water corporation Friday about the search for a buyer for her company. Bazelides declined to discuss the sale further. David Berg, the trial lawyer who serves as Hawk chairman, said this news probably will play a part in today's meeting. "Certainly this will be considered by the board and go into the decision-making," Berg said. City Council created the Hawk board in August, partly to circumvent bidding rules and get one company to oversee designing, building and operating of the plant. Azurix has been the most controversial of the three companies vying for the contract. It gained national attention when financial problems caused its stock to plummet. Energy giant Enron, which helped create Azurix in 1998, announced a financial deal that would restructure ownership of Azurix. That deal cost Enron a $326 million write-off toward the end of last year. Azurix has long been rumored as the Brown administration's favorite for the contract. Brown's fund-raiser, Sue Walden, is lobbying for Azurix. The Hawk board twice has come close to voting on which company should get the contract that would then be negotiated and sent to City Council for approval. Twice, a committee of City Hall staff has recommended Azurix as the front-runner. Twice the board has sent the staff back to figure different aspects into the calculation. But the second time, the staff committee was planning on recommending California-based Montgomery Watson until City Attorney Anthony Hall and Al Haines, the mayor's chief administrative officer, told the staff that a process revision that would allow a switch from Azurix was unwise. Hall also started a heated argument with Berg at a mayoral re-election fund-raiser over the changes that would keep Azurix from being the top recommendation for the contract. Hall said his concern was for integrity of the process, not which company wins. Despite the sale, Azurix still wants in on the water plant deal. Bazelides said the team on the water plant project will be capable of completing the project, even if sold to another company. "We are still very interested in the project," she said. "We are now in the process of marketing Azurix North America. When we started this process, we weren't." The staff's third recommendation is scheduled to be presented to the Hawk board today. The board is not bound by the staff recommendation.
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