|
|
Enron Mail |
The State Lockyer Fires Earthy Attack at Energy Exec
Los Angeles Times, 05/23/01 World Watch The Wall Street Journal, 05/23/01 Consumer rights cited in petition with Texas PUC Houston Chronicle, 05/23/01 Enron to meet with Indian officials Houston Chronicle, 05/23/01 New Cynet president to administer change Houston Chronicle, 05/23/01 Enron, Indian goverment talks on power dispute put off Associated Press Newswires, 05/23/01 Enron says Indian panel calls off power contract meeting, gives no explanation AFX News, 05/23/01 Enron, Maharashtra Power Dispute Negotiator Resigns (Update4) Bloomberg, 05/23/01 INDIA: Head of India state panel for Enron talks quits. Reuters English News Service, 05/23/01 India Enron Negotiator Offers To Resign After Criticism Dow Jones International News, 05/23/01 India Dabhol Pwr Co: Mtg With State Govt Panel Canceled Dow Jones Energy Service, 05/23/01 INDIA PRESS: Dabhol Row To Cause INR30B Loss To Lenders Dow Jones International News, 05/23/01 INDIAN CHIEF MINISTER URGES PANEL CHAIRMAN TO WITHDRAW RESIGNATION Asia Pulse, 05/23/01 India: MSEB to pay Dabhol bill 'under protest' Business Line (The Hindu), 05/23/01 US ENRON CORP PULLS OUT OF QATAR-UAE GAS PROJECT Asia Pulse, 05/23/01 Maharashtra may terminate DPC's services The Economic Times, 05/23/01 ASIA-PACIFIC: Enron may seek damages NEWS DIGEST Financial Times; May 23, 2001 Enron goes for valuation of businesses in India Business Standard, 05/23/01 SEC Task Force Says Investors Need More 'Soft' Data Dow Jones Business News, 05/22/01 BANDWIDTH BEAT: Video On Demand II May Have Happy Ending Dow Jones Energy Service, 05/22/01 USA: FERC sets Thursday conference on Calif natgas problems. Reuters English News Service, 05/22/01 Enron Hires Consultants to Value Business in India, Paper Says Bloomberg, 05/22/01 California; Metro Desk The State Lockyer Fires Earthy Attack at Energy Exec JENIFER WARREN TIMES STAFF WRITER 05/23/2001 Los Angeles Times Home Edition B-7 Copyright 2001 / The Times Mirror Company SACRAMENTO -- In a dramatic escalation of energy crisis rhetoric, California Atty. Gen. Bill Lockyer this week suggested the chairman of a Houston-based power company should be locked in a prison cell with an amorous, tattooed inmate named Spike. Lockyer, who is investigating whether energy firms have manipulated prices on the wholesale electricity market, made the comment in an interview with the Wall Street Journal that appeared Tuesday. "I would love to personally escort [Enron Corp. Chairman Kenneth] Lay to an 8-by-10 cell that he could share with a tattooed dude who says, 'Hi my name is Spike, honey,' " Lockyer said. Enron spokesman Mark Palmer called the comment "counterproductive rhetoric" that "does not merit a response." But other industry representatives denounced the remark as "outrageous," especially because neither Lockyer's office nor any investigative panel has filed charges against Enron or other companies. "You'd expect that the state's chief legal counsel would file charges first and make public statements second," said Gary Ackerman of the Western Power Trading Forum, an association of energy producers and traders. "We're very disappointed with his choice of words, which don't exactly fit the profile of his office." In an interview Tuesday, Lockyer said he decided to "ratchet up" the commentary to "put [energy companies] on notice" that "we are not afraid of them and have the will to prosecute." "What I'm trying to do is let these economic buccaneers understand that if we catch them, they're going to be prosecuted," Lockyer said. "Just because they're multimillionaires and run big corporations, it doesn't provide them with immunity." The attorney general is investigating whether power company officials tried to maximize profits through illegal manipulation of prices on the wholesale energy market. Several panels, including a state Senate committee and the California Public Utilities Commission, are conducting similar probes. On Tuesday, Lockyer announced that three power companies have agreed to turn over documents subpoenaed months ago by his investigators. The attorney general went to court to obtain the documents after the companies failed to meet a March 19 deadline to hand them over. Lockyer said the forthcoming documents would help his office as it sifts through mountains of evidence in search of possible violations of antitrust or unfair business practice laws. "Evidence is accumulating that certainly infers illegal activity," Lockyer said. "But we need to make sure it's compelling and clear enough that you can convince a jury." Lockyer said he singled out Enron's chairman because the Houston company is the world's largest energy trader. At least one observer found Lockyer's comments refreshingly candid. Harry Snyder, a senior advocate of Consumers Union, said, "Let Lockyer be Lockyer." * Times staff writer Dan Morain contributed to this story. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. International World Watch Compiled by David I. Oyama 05/23/2001 The Wall Street Journal A21 (Copyright © 2001, Dow Jones & Company, Inc.) Enron Unit Threatened With India Fine An Indian state utility is planning to impose a second penalty of four billion rupees ($85 million) on U.S. energy company Enron's local unit, barely a week after Enron took its first step to pull out of the embattled power project. A Maharashtra State Electricity Board official said the fine on Dabhol Power would be for not meeting capacity targets within a stipulated period. Dabhol Power officials declined to comment. The MSEB earlier this year imposed a similar penalty on Dabhol, which it hasn't paid, saying its plant couldn't be ramped up to full capacity within three hours from a cold start. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. May 23, 2001, 4:38AM Consumer rights cited in petition with Texas PUC By LAURA GOLDBERG Copyright 2001 Houston Chronicle Residential consumers switching power companies under a pilot deregulation program aren't being properly informed of their rights, four consumer groups said Tuesday. At issue is a document called "Your Rights as a Customer" that electric providers are required by the state Public Utility Commission to give consumers signing up to switch companies. The document must include information on a variety of topics, including filing complaints against providers, protection against unauthorized service switches, meter testing and privacy rights. Consumers Union, Texas Legal Services Center, Texas Ratepayers' Organization to Save Energy and the AARP Capital City Task Force for Deregulation of Electricity filed a petition Tuesday with the PUC. In it, they asked the PUC to require electric providers to fix their documents, to take any other action needed to clear up consumer confusion that may be occurring, and to develop a standard document format for providers to use. They also ask that the PUC's education campaign better inform consumers of their rights. Starting Jan. 1, when the Texas electricity market deregulates, all Texas consumers will be able to choose power providers. Before that, a limited number of consumers will be able to get power from new providers under the state's pilot program starting in July. Nearly 50,000 residential customers have signed up for the pilot, and thousands of slots are still open. That Texas consumers haven't had to shop for electricity presents a challenge to start with, said Janee Briesemeister, senior policy analyst with Consumers Union Southwest Regional Office. "And when the information that is given to consumers is confusing, they're at a further disadvantage," she said, adding that the PUC said it would adopt a standard format for the document and hasn't done so yet. Terry Hadley, a spokesman for the PUC, said the agency did promise a standard format for full competition, which starts in January. Officials hope to work with the consumer groups to address their concerns, he said. "It is yet another reason for the pilot project, so that we can get all these things done to everyone's satisfaction before the full roll-out come January," he said. The commissioners may discuss the petition at its open meeting Thursday. The consumer groups analyzed the "Your Rights as a Customer" documents being used by seven electric providers and concluded that none satisfied all the PUC disclosure requirements. Some try to put information in easy-to-understand language, while others don't, the groups said. The procedure to file complaints with electricity providers, and then with the PUC, are identical for all providers, the petition noted. "However, depending on which `Your Rights' document you read, the way the complaint process works and how you access it varies," it goes on to say. "Accessing and utilizing the customer complaint process should be straightforward and objective, not a riddle for consumers to solve." For example, the petition says, one provider doesn't explain an electric provider's responsibility to do an investigation and give the customer the results within 21 days, while another leaves out PUC important contact information and basics on what information is needed to file a complaint. The groups reviewed the "Your Rights" documents being given to consumers by following companies: Entergy Solutions, First Choice Power, Green Mountain Energy Co., The NewPower Co., Shell Energy and TXU Energy Services. All are vying for customers in Houston. The document of Reliant Energy Retail Services, which is marketing to customers outside Houston, was also included. Officials with Shell Energy, NewPower and First Choice said they were still reviewing the petition and couldn't comment on it, while TXU couldn't be reached. Green Mountain Power said it followed appropriate guidelines in creating its document but does support a standard format, while Shell said it would back anything that makes it easier for customers to understand their rights. "While Entergy Solutions is very confident that our document provides a complete picture of consumer protections, we agree that `Your Rights as a Customer' should be standardized," said Jim DeLong, Entergy's vice president of retail markets. Pat Hammond, a Reliant spokeswoman, said the company had already incorporated suggestions about its document made by PUC officials, who reviewed a draft. Most of the petition's comments relate to items that don't apply until full deregulation starts, Hammond said. While Reliant believes its document follows the rules, it plans to draft a new one for full deregulation. May 23, 2001 Houston Chronicle Enron to meet with Indian officials BOMBAY, India -- The Indian subsidiary of Houston-based power concern Enron Corp. said Tuesday it would meet government officials for talks on a power supply dispute. "We look forward to hearing the proposed solutions ... particularly relating to creditworthy purchases for the power," said a statement from Dabhol Power Co., Enron's Indian unit. The statement comes two days after the company issued a preliminary notice to the Maharashtra State Electricity Board, a state-run utility, that it would stop supplying electricity if the government company continued to default on payments. Representatives from Houston-based Enron will meet today with officials from the utility, the federal government and Maharashtra, the western Indian state where the project is located. The electricity board has denied it defaulted on paying electricity bills to the power company that is setting up a $3 billion project in Maharashtra state. Electricity board officials said overdue December and January bills of $48 million should be offset against a fine of $85.31 million it imposed on Enron for not supplying power during the period. Enron disputes the fine. Politicians in Maharashtra say the cost of Dabhol power is too high and have called for renegotiating the tariff. Others have suggested selling power to nearby power-hungry states. May 23, 2001 Houston Chronicle New Cynet president to administer change Executive plucked from vendor in Michigan By TOM FOWLER Copyright 2001 Houston Chronicle Houston company Cynet has chosen an executive from one of its vendors to lead it through a reorganization as its new president and chief operating officer. Robert Demyanovich, the founder of Michigan-based Mail2Media, a company Cynet planned to work with as a vendor, will take on the new posts to help the company reach profitability by early next year. "What caught our eye about him was his background in a part of our core business through fax and e-mail," said Sam Beale, vice president and general counsel for Cynet. Demyanovich will continue to have an advisory capacity with his prior company, but will move from Detroit to Houston to take on the Cynet position full time. Vincent Beale Sr., chairman and chief executive officer of Cynet, said Demyanovich will help the company focus on growing its two core products, global messaging software and wireless device technology. "He has already been instrumental in helping the company shape its revised business plan, along with aggressive cost reduction initiatives as the primary drivers in reaching profitability," Vincent Beale said. Part of the reorganization has included cutting its staff by about 60 percent. Cynet has been steadily eliminating jobs since last winter, going from a high of about 125 workers to about 50. In February, Cynet also signed an agreement with AECsoftUSA to transfer all existing accounts through its Cynet Interactive service to AECsoft. In exchange, AECsoft would forgive outstanding amounts owed by Cynet. The company expects to take a one-time charge in the current quarter to account for the reorganization, but officials expect it to cut the quarterly cash burn rate from $2 million to cash flow positive by the first quarter of 2002. Both the changing climate for technology companies and the failure of a deal to sell off part of the business to a French company fueled the reorganization. The technology market downturn that started last spring has made investors demand a clearer path to profit rather than simply revenue growth, the Beales said, meaning the company needed to slim down and focus on running efficiently. The company also saw a deal to sell its fax broadcasting business to I-Media Group of France fall apart when I-Media couldn't raise the $6.7 million negotiated in the deal. Instead, Cynet decided to integrate that technology back into its global messaging product, said Chief Financial Officer Greg Smith. The global messaging product line will now let businesses send out messages to thousands of recipients at once via fax, e-mail or voice messaging. With new technology that will be introduced by Cynet's relationship with Demyanovich, the software will also let a user design a message and send it via printed media, such as a letter through the mail. The company will also focus on its high-speed wireless technology offerings, such as an add-on to the Compaq iPaq Pocket PC that turns the hand-held digital assistant into a cell phone. When it went public in January 2000, Cynet became Houston's only African-American-managed publicly traded company. It has received financial backing from Enron and Compaq Computer Corp., which has an 8.9 percent stake in the company from an earlier $2 million investment and a recent loan. Enron, Indian goverment talks on power dispute put off 05/23/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. BOMBAY, India (AP) - Talks on a power supply dispute between government officials and the Indian subsidiary of the American energy company Enron were canceled Wednesday after the head of a negotiating panel resigned. Madhav Godbole, chairman of the panel of state and federal government officials and officers of a state power utility, resigned to protest a statement by a top politician that implied the panel had a "negative" attitude. Sharad Pawar, leader of the Nationalist Congress Party that runs the Maharashtra state coalition government, told reporters late Tuesday that he did not foresee a positive resolution since the panel was headed by a person with "negative attitudes." Pawar, who did not name Godbole, later said his statement had been misinterpreted. He said he had merely stated that the panel needed to work with a more positive frame of mind. Representatives of Dabhol Power Co., Enron's Indian unit, were scheduled to meet the state-government appointed panel three days after the company issued a notice to stop supplying electricity if the Maharashtra State Electricity Board continued to default on payments. A new date for the next meeting has not yet been fixed. Godbole earlier headed a five-member committee that submitted a 198-page report last month to the state government recommending renegotiating a power supply agreement with Enron to lower prices. State government ministers have protested that the power supplied by phase one of Dabhol's two-year-old naphtha unit is "unaffordable." While Enron has demanded that the power utility, the Maharashtra State Electricity Board, make electricity payments on time, the board denies it is a defaulter. The board has asked that overdue December and January bills of dlrs 48 million be offset against a fine of 4 billion rupees (dlrs 85.31 million) it slapped on Enron for not supplying power during the same period. Enron has refuted the fine. (rtb-ng-bdb-twx) Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron says Indian panel calls off power contract meeting, gives no explanation 05/23/2001 AFX News © 2001 by AFP-Extel News Ltd NEW DELHI (AFX) - U.S.-based Enron Power Corp said a meeting with an Indian expert panel set up to renegotiate an electricity supply contract to Maharashtra state had suddenly been called off. "We went to attend the meeting and we were told the meeting was called off. We were not assigned any reason for that," a spokesman for Enron's Indian arm told Agence France-Presse. jn For more information and to contact AFX: www.afxnews.com and www.afxpress.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron, Maharashtra Power Dispute Negotiator Resigns (Update4) 2001-05-23 07:08 (New York) Enron, Maharashtra Power Dispute Negotiator Resigns (Update4) (Adds Maharashtra chief minister's comments in third section.) Mumbai, May 23 (Bloomberg) -- A negotiator trying to resolve a payment dispute between Enron Corp. and India's Maharashtra State Electricity Board resigned after being criticized for the way he handled the talks, setting back hopes for a compromise. ``The meeting has been canceled because (Madhav) Godbole has put in his papers,'' said Vinay Bansal, chairman of the electricity board. ``It's not certain when the meeting will be held again.'' The meeting had been scheduled for 11 a.m. Mumbai time. Dabhol on Saturday began a procedure to end its power supply contract by serving a ``preliminary termination notice'' on the electricity board because of unpaid electricity bills. India's federal and state governments, which have guaranteed payments for power by the board and some of the loans to help fund the project, may have to pay Dabhol more than 170 billion rupees ($3.6 billion) if it carries through termination of the 2,184 megawatt power venture. Dabhol is owed 3 billion rupees by the board for power supplied in December and January. The board has refused to pay because it said the bills should be lower to reflect a penalty Dabhol should pay for failing to supply power at full capacity. Dabhol is 65 percent owned by Houston-based Enron, the world's biggest energy trader. Godbole, a former chairman of the electricity board, was criticized for his handling of the negotiations between Enron and the electricity board. Statements ``I have resigned because of statements made against me'' by Sharad Pawar, leader of the Nationalist Congress Party in the state's ruling coalition, Godbole said in an interview. The decision to quit was ``well-considered,'' he said. The Economic Times quoted Pawar as saying ``a person with a positive attitude should head the renegotiation panel. A pessimistic disposition about Enron will further antagonize the two parties.'' Pawar was the state's chief minister when Enron first signed the power supply agreement with the electricity board. Anti-Enron activists went to Godbole's residence in South Mumbai to try to persuade him to return to the negotiating committee, as they view him as a supporter of their cause. ``It's important to get him back,'' said Pradyumna Kaul, an activist with Enron Virodhi Andolan, a non-governmental organization opposed to the project. Still, he said Godbole's resignation has helped focus attention on the need for a solution. Press Conference At a press conference, Maharashtra Chief Minister Vilasrao Deshmukh said the state government hasn't accepted Godbole's resignation. ``We are going to ask him to start working again,'' he told reporters. ``We'll clear all the misunderstandings.'' Chhagan Bhujbal, deputy chief minister of the Maharashtra government, and a member of the Nationalist Congress Party, said his party supports Godbole. ``Let the state government's response come, and I will give it a thought,'' Godbole said, when told of the comments at the press conference. About ten days ago, three other members of the committee led by Godbole, including Deepak Parekh, chairman of Housing Development Finance Corp., India's biggest home mortgage lender, quit citing personal reasons. The committee was set up by Maharashtra after Dabhol in April authorized its Managing Director Wade Cline to cancel the power supply contract. Enron has called on India's federal government to ensure a resolution of the dispute. ``I am awaiting the return of the power minister who is abroad,'' Finance Minister Yashwant Sinha told reporters in New Delhi. Power Minister Suresh Prabhu was in France and is returning later today. INDIA: Head of India state panel for Enron talks quits. 05/23/2001 Reuters English News Service (C) Reuters Limited 2001. BOMBAY, May 23 (Reuters) - The head of an Indian panel examining ways to restructure U.S. energy giant Enron Corp's troubled power project resigned on Wednesday, dashing hopes of an early settlement of the dispute. Enron's $2.9 billion project in the western state of Maharashtra is widely seen as a test case for India's plans to privatise its power sector. "I spoke to the chief minister (of Maharashtra) this morning and I have submitted my resignation to him," panel chief Madhav Godbole told Reuters. After months of wrangling over a payments dispute with the cash-strapped state electricity board, the Enron unit that runs the project, Dabhol Power Co, last Saturday issued a preliminary notice to terminate its contract to sell power to the utility. Godbole said he did not approve of a statement on Tuesday by Sharad Pawar, president of the National Congress Party (NCP), describing Godbole, a former bureaucrat, as having a negative approach. Pawar's NCP is a major ally of the coalition government that rules Maharashtra. A meeting between the panel and Enron's Dabhol Power Company scheduled for Wednesday has been cancelled, Godbole said. The negotiating panel was expected to look at cutting power tariffs as well as third-party sales if the state-run utility could not absorb the power generated by the power project, located at Dabhol, on India's west coast. Media reports on Wednesday quoted Pawar as saying the attitude of the renegotiating committee was a cause of concern. "If you have to renegotiate, you have to strengthen and not weaken the hands," Godbole said. "This way there is no productive work that can be done." Dabhol's termintion notice is widely seen as a first step by Houston-based Enron to pull out of the 21,84 MW power project. The project's 740 MW first phase has begun operation, and the 1,444 MW second phase is expected to be commissioned later this year. Dabhol Power Corp is 65 percent owned by Enron. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. India Enron Negotiator Offers To Resign After Criticism 05/23/2001 Dow Jones International News (Copyright © 2001, Dow Jones & Company, Inc.) NEW DELHI -(Dow Jones)- Madhav Godbole, chairman of the committee appointed by the Maharashtra government to renegotiate the power purchase agreement with the Enron Corp.'s (ENE) Indian unit Dabhol Power Co. resigned from the panel Wednesday, according to Press Trust of India. "I have resigned due to the derogatory remarks made against me by Nationalist Congress Party Chief, Sharad Pawar, last night," Godbole told Press Trust. He has sent his resignation to Maharashtra state Chief Minister Vilasrao Deshmukh, Press Trust reports. But Star TV said Deshmukh has asked Godbole to stay on. In an apparent criticism of Godbole, Pawar who is a member of the state coalition government, said last night he was apprehensive about the outcome of the renegotiations "as those leading the talks from the government side are working with a negative approach." Late Tuesday, Enron said it was prepared to meet government officials for talks scheduled Wednesday on a power supply dispute. "We look forward to hearing the proposed solutions... particularly relating to creditworthy purchases for the power," said a statement from Dabhol Power Co. The statement came two days after the company issued a preliminary notice to the Maharashtra State Electricity Board, a state-run utility, that it would stop supplying electricity if the government company continued to default on payments. Enron representatives were scheduled to meet officials from the western Indian state of Maharashtra, where the project is located, and federal government and MSEB officials Wednesday. The MSEB has denied it defaulted on paying electricity bills to the power company that is setting up a $3 billion project in Maharashtra state. MSEB officials said overdue December and January bills of $48 million should be offset against a fine of 4 billion rupees ($1=INR47.005) it imposed on Enron for not supplying power during the period. Enron disputes the fine. Politicians in Maharashtra say the cost of Dabhol power is too high and have called for renegotiating the tariff. Others have suggested selling power to nearby power-hungry states. Politicians complain Dabhol's costs have averaged more than INR4 as against INR1.8 per unit agreed in 1995 for the naphtha-generated electricity from the 740-megawatt plant. The controversy erupted last year when prices shot up to INR7 per unit because of worldwide fluctuations of oil prices and depreciation of the rupee. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. India Dabhol Pwr Co: Mtg With State Govt Panel Canceled 05/23/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) NEW DELHI -(Dow Jones)- Enron Corp.'s (ENE) Indian unit Dabhol Power Co. said Wednesday a meeting with the Maharashtra state government's expert panel - scheduled for 0530 GMT Wednesday - has been called off, spokesman Jimmy Mogal told Dow Jones Newswires. The aim of meeting was to renegotiate a power purchase agreement between DPC and the Maharastra State Electricity Board. "We went to the meeting today (Wednesday) but we were told the meeting had been called off. Although no official reason was given, we were given to understand that the chairman of the panel, Madhav Godbole, had resigned." Local press reports confirmed Godbole's resignation Wednesday. "I have resigned due to the derogatory remarks made against me by Nationalist Congress Party Chief, Sharad Pawar, last night," Godbole told the Press Trust of India. Mogal said Dabhol will be waiting to hear from the Maharashtra state government and the MSEB to determine its future course of action. He declined to say whether the DPC will participate in a meeting with the state panel if it was headed by a new chairman. "I would not comment on this issue now. Let the Maharashtra state government decide first on what they want to do next," Mogal said. Late Tuesday, Enron said it was prepared to meet government officials for talks scheduled Wednesday on the long-running power supply dispute. "We look forward to hearing the proposed solutions... particularly relating to creditworthy purchases for the power," said a statement from Dabhol Power Co. The statement came two days after the company issued a preliminary notice to the MSEB, a state-run utility, that it would stop supplying electricity if the government company continued to default on payments. The MSEB has denied it defaulted on paying electricity bills to the power company that is setting up a $3 billion project in Maharashtra state. MSEB officials said overdue December and January bills of $48 million should be offset against a fine of 4 billion rupees ($1=INR47.005) it imposed on Enron for not supplying power during the period. Enron disputes the fine. -By Himendra Kumar, Dow Jones Newswires; 91-11-461-9427; Himendra Kumar@dowjones.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. INDIA PRESS: Dabhol Row To Cause INR30B Loss To Lenders 05/23/2001 Dow Jones International News (Copyright © 2001, Dow Jones & Company, Inc.) BOMBAY -(Dow Jones)- The three Indian lenders to the Dabhol Power Company - Industrial Development Bank of India, State Bank of India and ICICI - may take a loss of 30 billion rupees ($1=INR47.005) if the company decides to invoke the accelerable guarantee clause in the wake of the preliminary termination notice, the Business Standard reports. The clause says that the lenders will have to cover the loans should the project fail. Also at stake is the lenders' INR22.5 billion in direct loans outstanding from the Dabhol Power Company, the Indian arm of Enron Corporation, the newspaper said. According to the newspaper, if the accelerable guarantee clause is invoked, the three Indian financial intermediaries will face a massive cash crunch. From phase 1 of Dabhol's project, the outstanding foreign loan from Exim of the U.S. for $221 million is backed by the guarantees of the three Indian lenders. The project has run into controversy with the Maharashtra government and the Maharashtra State Electricity Board over power supply dues. The power company has threatened to withdraw from the massive power project, one of India's largest foreign direct investments. Web Site: www.business-standard.com -By Bombay Bureau, Dow Jones Newswires; 91-22 2884211;djn.bombay@dowjones.com -0- 23/05/01 04-44G Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. INDIAN CHIEF MINISTER URGES PANEL CHAIRMAN TO WITHDRAW RESIGNATION 05/23/2001 Asia Pulse © Copyright 2001 Asia Pulse PTE Ltd. MUMBAI, May 23 Asia Pulse - The Chief Minister of the western state of Maharashtra, Vilas Rao Deshmukh, today appealed to Madhav Godbole to withdraw his resignation from chairmanship of the committee set up for negotiating the power purchase agreement (PPA) with the Enron-promoted Dabhol Power Company (DPC). Godbole, former federal Home Secretary, submitted his resignation to the chief minister this morning after an adverse comment made against him by the Nationalist Congress Party president Sharad Pawar at a public function last night. "Godbole's in-depth knowledge and experience makes him indispensible for handling vexed issues such as renegotiation with the US energy giant," Deshmukh told PTI. "I am requesting on behalf of Maharshtra government that he reconsider his decision to resign," he added. In an apparent criticism of Godbole, Pawar had said, he was "apprehensive of the outcome of the discussions with Enron as those leading the talks from the government side are working with a negative approach". (PTI) 23-05 1751 Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. India: MSEB to pay Dabhol bill 'under protest' 05/23/2001 Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - Asia Intelligence Wire MUMBAI, May 22. THE Maharashtra State Electricity Board will pay Dabhol Power Company's April bill on May 25 "under protest". "We will pay DPC Rs 137 crore under protest unless Enron takes any step to jeopardise the situation," a senior MSEB official said. The two companies will come face-to-face at the negotiating table on Wednesday. According to the official, the board will pay the bill "under protest" because DPC refused to adjust the rebate slapped on MSEB in its earlier bills. "We had asked them (DPC) to carry out corrections in their February bill when we had slapped the penalty. We had asked them to show the shortfall in supplying power to MSEB, for which we charged them the rebate, in their earlier bills. But DPC did not do so," the official said. The board plans to charge DPC for the shortfall in supply for February and May. The rebate is calculated once in four months and the last couple of defaults in supply will be charged at the end of this month, he said. "There is a cap on the rebate amount we can charge so the amount may not exceed Rs 400 crore," the official said. MSEB had earlier slapped a rebate of Rs 401 crore on DPC for shortfall in power supply on January 28. "Although we are paying the April bill under protest, we hope that DPC will make the required corrections in the May bill which is due on June 5," the official said. Enron keen on Dabhol: Meanwhile, according to sources, Enron is keen on continuing with the Dabhol power project and would like its lenders to continue disbursements, in spite of beginning the termination process. They said some lenders are also of the view that since it is more than 90 per cent complete, it makes more sense to finish the project. Lenders had stopped disbursement of funds to the project some time early this year following the dispute between DPC and MSEB. Indian lenders had consistently maintained that they preferred going ahead with DPC. They had also succeeded at a London meeting last month to persuade all lenders to not consent to terminating the project. It was, however, the foreign lenders' will that prevailed ultimately, and they gave their consent last week to invalidate the power purchase agreement with MSEB. DPC today confirmed that it would be present at the Godbole Committee meeting on Wednesday. DPC's stand is also being viewed by Indian lenders as a "positive" development after the pre-termination notice being served. DPC said in a release issued here, "consistent with our traditional practice of being open to discussions with MSEB, State Government and the Centre, we confirm that DPC will be represented at the Godbole panel meeting tomorrow. We look forward to hearing the proposed solutions from the committee, particularly related to creditworthy purchasers for the power. In addition, we are extremely interested in the Centre's attendance and learning of their expected role." The Central Government representative, Mr A.V. Gokak, was not present at the last meeting as he was "appointed at too short a notice". DPC had cited it as the Centre's unwillingness to take any "positive" role in the process. Our Bureau Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. US ENRON CORP PULLS OUT OF QATAR-UAE GAS PROJECT 05/23/2001 Asia Pulse © Copyright 2001 Asia Pulse PTE Ltd. ABU DHABI, May 23 Asia Pulse - US Enron Corp. has bowed out from a US$500 million phase of a US$6-US$S8 billion project to route Qatari gas to the United Arab Emirates and has sold its 24.5 per cent stake in Dolphin Energy Ltd (DEL) to UAE Offsets Group (UOG) for an undisclosed amount, regional newspapers including Oman Observer report today. Reuters reported that a senior Enron official for the Middle East explained at a press conference that Enron was not suited to a project that had evolved into a major upstream venture. Last week, the Middle East Economic Digest reported that the profit margin for Enron would be low and that other partners in the project regarded the company's estimated cost for constructing and laying pipeline as too high. TotalElfFina is reported to be interested in increasing its 24.5 per cent stake in the project although DEL Chairman Ahmed Ali Al Sayegh emphasised that DEL would seek another partner in the project. Qatar sits on the world's third largest gas reserves. (ONA) 23-05 1431 Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Maharashtra may terminate DPC's services Girish Kuber 05/23/2001 The Economic Times Copyright (C) 2001 The Economic Times; Source: World Reporter (TM) MUMBAI THE DABHOL Power Company is likely to be served with a primary termination notice from the Maharashtra government. Senior officials of the state's energy department and the Maharashtra State Electricity Board on Tuesday, separately, held a series of meetings with Maharashtra's Advocate-General to decide their strategy. "This is certainly the first option we are looking at to tackle the situation after the Enron served a PTN to MSEB," sources from the state's energy minister said. The state government and MSEB will issue a primary termination notice to DPC if Enron refuses to change its stand and 'non-cooperation' with the Godbole panel continues. "This could be the only option left with us to face the crisis," said sources. The decision to issue the termination notice will be arrived at only after a meeting of the Godbole panel on Wednesday. The meet will also be attended by A V Gokak, the Centre's nominee on the Godbole panel. This will be the first meeting being held after DPC issued the notice and also the first in which a Centres's nominee will be present. Meanwhile, changing its earlier stand, US energy major Enron, DPC's promoter, has also decided to attend the meet. Enron said it was looking forward to "hearing proposed solutions from the Godbole panel particularly related to credit-worthy purchasers for the power". An Enron spokesman said they were "specially interested in the Centre's presence and learning of their expected role". Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. ASIA-PACIFIC: Enron may seek damages NEWS DIGEST Financial Times; May 23, 2001 By JULIE EARLE Enron may seek damages Enron, the US power company, warned yesterday it would move to recoup significant termination damages if it was unable to settle a dispute over unpaid bills with the Maharashtra State Electricity Board (MSEB). It is understood that Enron would seek damages of Dollars 3.5bn (Pounds 2.4bn) to Dollars 5bn (Pounds 3.4bn). It has a 65 per cent stake in the Dabhol Power Company (DPC), which operates the Bombay plant that has supplied the MSEB. Julie Earle, New York For regional reports, www.ft.com/asiapacific Copyright: The Financial Times Limited Enron goes for valuation of businesses in India P Vaidyanathan Iyer & Parul Gupta NEW DELHI 05/23/2001 Business Standard 1 Copyright © Business Standard In a move which may be a prelude to Enron's complete exit from India, the company has appointed Arthur Andersen and Jones Lang La Salle to undertake a valuation exercise of all its businesses in the country, including the controversial Dabhol Power Company. While Jones Lang La Salle will assess all the real estate investments of Enron in India, Arthur Andersen will value the business worth of the Houston-based energy major's Indian set-up. When contacted, a company spokesperson declined to comment. "Nobody in Enron will talk about it," he said. However, sour- ces said the appointment of consultants was in line with Enron's strategic decision of pulling out of the 2,144 mw power venture which has been mired in controversy from day one. According to sources, Enron's real estate investments have taken a big hit. "Enron invested in prime real estate during 1992-1995 when the prices were at a peak. However, they have touched more realistic levels now," said a real estate consultant. Jones Lang La Salle is, however, tight-lipped about such a mandate from Enron. Meanwhile, sour- ces said that Cushman & Wakefield which had earlier finalised certain real estate investments for Enron was also in the race. CB Richard Ellis has also proposed certain clients to Enron for buying/leasing some of its property. Enron's Houston-based president Jeffrey Skilling had in February said in an interview to Business Week that Enron "should not be in there (India) building $2 billion power plants. Our cost of capital is too high for that." DPC had disregarded the contents of the Godbole Committee report when it issued a preliminary termination notice to MSEB on May 19. The PTN gives DPC, MSEB, the state government and the Centre six months to resolve the issue amicably. If the talks fail, DPC would issue the final termination notice. Enron India had earlier this year also decided to abandon the proposed joint venture with MSEB and Global Telesystems for a broadband network in Maharashtra. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. SEC Task Force Says Investors Need More 'Soft' Data By Judith Burns 05/22/2001 Dow Jones Business News (Copyright © 2001, Dow Jones & Company, Inc.) Dow Jones Newswires WASHINGTON -- A new Securities and Exchange Commission task-force report calls for an overhaul of federal accounting rules, saying financial statements don't reflect the true value of public companies. "At a time when our stock markets loom so large in the economy, we need to close large gaps in the quality of information that companies disclose," said task-force chairman Jeffrey Garten, dean of Yale University's School of Management. The task force wants to close the gaps by providing investors with so-called soft data, such as intangible assets, that don't appear on corporate balance sheets. Any information that helps investors assess future corporate profits and cash flow "should be encouraged" by regulators and accountants, the task force said in a report issued Tuesday. It stopped short of saying regulators should require companies to divulge such information, but suggested protecting firms from litigation as long as they report truthfully. "Soft" data such as financial information about a company's business model, competition, intangible assets and operating performance measures is likely to become increasingly valuable, the task force predicted. Indeed, it said markets are likely to penalize companies that don't voluntarily provide such results. Intangible assets such as patents, technology licenses, customer lists, business alliances, brand-name recognition and a highly skilled work force aren't given sufficient recognition under current accounting rules, the task force concluded. Industry performance measures such as revenue per customer, inventory turnover, order backlogs, and speed at introducing new products to market also get short shrift under existing accounting rules, the task force added. The report suggests lawmakers encourage companies to disclose this data without fear of being sued, provided the information is clearly labeled and the company doesn't intend to deceive. "Intangible assets may seem esoteric, yet they are the reasons why many companies attract investments in this information age," said House Financial Services Committee chairman Michael Oxley, an Ohio Republican. In a statement, Mr. Oxley said he supports voluntary disclosure of off-balance sheet items such as intangibles, saying it will give investors "more accurate information on which to base their financial decisions." SEC officials had no immediate comment on the task-force recommendations. Former SEC chairman Arthur Levitt asked Mr. Garten to create the task force in October 1999, focusing on whether corporate financial reports provide enough information to investors. The group concluded that current disclosure, based on generally accepted accounting principles, or GAAP, and quarterly and annual reports required by the SEC, produces backward-looking documents showing past transactions that offer little help for understanding where the company is headed in the future. To spur companies to provide more forward-looking information, the group rejected the idea of more regulation, saying "a far better approach" would be to make it easier and safer for companies to disclose information beyond what appears in standard financial statements. Adopting standard rules for reporting "soft" results would be difficult since much of the missing information is specific to particular industries or companies, the report noted, and rapid changes in economic and business models would quickly make new rules out of date. Mr. Garten's group acknowledged that without rules in place, companies might tend to skew soft financial results, reporting only those that show the company in a favorable light, or calculating them in a nonstandard way that makes comparisons impossible. But the group said there is an easy fix to such problems, asserting "market forces will penalize companies that provide inadequate information relative to their peers." The task force includes venture capitalist John Doerr; Rob Glaser, chairman and CEO of RealNetworks Inc. (RNWK); Enron Chairman Kenneth Lay; investment banker Peter Peterson; Cisco Systems Inc. (CSCO) controller Dennis Powell; Professor Baruch Lev of New York University; Professor Joseph Stiglitz of Stanford University; and Hal Varian, dean of the University of California-Berkeley's School of Information Management and Systems. Write to Judith Burns at judith.burns@dowjones.com Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. BANDWIDTH BEAT: Video On Demand II May Have Happy Ending By Michael Rieke Of DOW JONES NEWSWIRES 05/22/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) HOUSTON -(Dow Jones)- The prospects for video on demand took a blow in March, when a deal between Enron Corp. (ENE) and Blockbuster Inc. (BBI) fell apart. The split not only broke up a partnership of giants in their fields, but also revealed some of the inherent difficulties in getting the business going. Nevertheless, transcontinental telecommunications networks like Williams Communications Group (WCG) and Global Crossing (GX), as well as major studios and even utilities, are still interested in providing the service. Once the hurdles are cleared, video on demand has a shot at producing significant revenue. Jason Bazinet, a senior research analyst in Internet infrastructure services for J.P Morgan Securities, estimates the market could surpass $1.5 billion in revenue by 2005, with two-thirds of that growth in 2004 and 2005. "We'll be ready," said Greg Onyszchuk, a vice president at Williams' Vyvx Broadband Media unit. "And I don't think we'll be the only network ready." The Blockbuster-Enron team-up sounded like a great idea when the two companies announced it. Blockbuster is known for having videotapes of just about every movie you'd want to see. Enron, always an innovator, promised to move the videos across its long-haul fiber-optic network to local phone companies, like SBC Communications Inc. (SBC), which would deliver them to homes. But there were problems. Blockbuster said Enron's network couldn't deliver the quality needed for transmitting the large video files. And Enron said Blockbuster, whose agreements with movie studios only cover videos rented through its stores, couldn't deliver the content. Those shortcomings point to the significant hurdles that remain before video on demand, also called VOD, can be made viable. Studios Want In As Blockbuster learned, major motion picture studios want a bigger piece of the VOD action, and they're interested in cutting out middlemen between themselves and viewers at home. Clearing that hurdle is trickier than it sounds, even without getting into antitrust issues. Interest by the studios is more rumored than publicly discussed. Still, Onyszchuk believes all the major studios have VOD initiatives under way, because they're already getting big revenues through rentals. Individual studios can't pull it off on their own. The 20 to 25 most popular movies account for a huge percentage of video rentals at any given time, Onyszchuk said. Even two studios working together would still probably have only seven to 10 of the Top 25 pictures, which isn't enough. "If you want to be in the VOD business, you've got to have a current library of hits," he said. "You need most of them." Security is also a big issue for the studios, which want to be sure their movies aren't pirated from a transmission network. A software program called Divx is threatening to do for video what MP3 did for audio distribution via the Internet. Once pirated, a video file can be burned on to a DVD disk and distributed without paying royalties to the studios. Paying users bring their own hurdles: Motion picture studios aren't set up to handle billing and collection from subscribers. Retail End Underdeveloped Problems also exist on the other end of the fiber. To be profitable, the market needs 10 million to 20 million subscribers with high-speed Internet connections, Onyszchuk said. Those volumes won't really be in place for two years. Studies predict that 10 million homes will have high-speed connections by the end of the year, with 20 million connections expected in the next 18-24 months. Storage is another issue. When Enron and Blockbuster tested their VOD service, movies were streamed directly from Los Angeles to individual homes. That system can work when a transmission network is uncongested. But long-haul transmission can develop glitches when there's heavy traffic on a network - like that created by, say, 20 million VOD customers. It makes more sense to have video files of movies in data storage centers in the top 125 cities in the country, Onyszchuk said. Then they would have to be transmitted only a few miles to local subscribers. But most data storage centers are designed to store Web pages, files of 5,000-10,000 bytes. Movies are much larger - 3 billion to 4 billion bytes. VOD calls for terabit storage (that's 1 trillion bytes) in metro areas, he said. Vyvx has a 100-terabyte data storage center in Tulsa, which Onyszchuk said could handle hundreds of movies. Companies like Exodus Communications (EXDS) and StorageNetworks Inc. (STOR) are deploying more data centers with terabyte storage capacity to handle expected demand for services like VOD and streaming video. Aggregation at either end of the long-haul transmission networks could help overcome some problems. Aggregation of content at the studio end would make most if not all popular movies available to subscribers. The model for VOD distribution would be companies like Blockbuster, which aggregate distribution rights for movies on video tape. Aggregation at the other end of the networks could bring all subscribers into the market whether they have high-speed cable-TV connections or high-speed digital subscriber lines from phone companies. Aggregation at the local level seems ideal for utilities that are getting into the telecom sector. They have the billing systems and most if not all the local customers needed to make the service work. Two utilities, Reliant Energy Inc. (REI) and Potomac Electric Power Co. (POM), have opened the door to future revenue from VOD. Reliant Energy Inc. has invested in Grande Communications, which provides Internet access, phone service and cable television. Potomac Electric and RCN Corp. (RCN) have a joint venture, StarPower Communications, which provides cable television service in the Washington, D.C., area. -By Michael Rieke, Dow Jones Newswires; 713-547-9207; michael.rieke@wsj.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: FERC sets Thursday conference on Calif natgas problems. 05/22/2001 Reuters English News Service (C) Reuters Limited 2001. WASHINGTON, May 22 (Reuters) - Key players in the California power crisis will address the Federal Energy Regulatory Commission staff at a special conference on Thursday on the state's need for future natural gas supplies. Executives with Enron Corp , El Paso Corp , PG&E Corp's Pacific Gas & Electric , and Sempra Energy's Southern California Gas will make presentations at the conference, FERC said on Tuesday. The companies are among two dozen utilities, pipelines, marketers, and state regulators scheduled to speak at the technical conference organized by FERC staffers. The technical conference will gather information and recommendations about California's future demand for natural gas, projected interstate pipeline capacity into California, interconnections between interstate and intrastate pipelines, and how the intrastate pipeline capacity is allocated. The conference will begin at 10 a.m. EDT (1400 GMT) on Thursday at FERC's headquarters in Washington, D.C. All participants were to submit copies of their presentations to FERC by Wednesday, and the agency said it would publish the documents on its Internet site. Energy-starved California is facing an estimated 260 hours of blackouts this summer, due in part to tight supplies of natural gas to fuel power plants. A public opinion survey released on Tuesday found that California residents are increasingly fearful of their state's energy crisis. Some 75 percent of the 1,015 adults surveyed said they viewed the energy problem as "very serious," up from 58 percent in January. More than half of those surveyed said they believed the energy crisis was an attempt by energy companies to boost prices, while one-third say they believed there was a genuine shortage of electricity. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron Hires Consultants to Value Business in India, Paper Says 2001-05-22 22:51 (New York) Mumbai, May 23 (Bloomberg) -- Enron Corp. appointed two consultants to value its Indian assets and businesses, including Dabhol Power Co., as a prelude to its exit from the country, the Business Standard reported, without identifying sources. Enron appointed Arthur Andersen LLP and Jones Lang LaSalle Inc., to value properties and overall business in the country, the paper said. On Monday, Enron pulled out of a $2 billion pipeline project in Qatar as it became increasingly likely that its Indian power- sales agreement will collapse. Last week Dabhol Power, owned 65 percent by Enron, served a preliminary termination notice on India's Maharashtra State Electricity Board to stop supplying power because it's owed 3 billion rupees ($64 million) by the board.
|