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Enron Mail |
PBS's Frontline to Air First Television Investigation of California Energy
Crisis PR Newswire, 06/01/01 Energy wholesalers on PG&E committee accused of conflict Associated Press Newswires, 06/01/01 CANADA: Delays could unplug Enron's Ontario power plans. Reuters English News Service, 06/01/01 USA: NewPower sees savings from smart energy technology. Reuters English News Service, 06/01/01 Amer Elec Power Completes Houston Pipe Line Buy <AEP ENE Dow Jones News Service, 06/01/01 California Lawmakers Weigh Plan to Let Business Shoulder Burden of Utility Rescue Dow Jones Business News, 06/01/01 Williams CEO fears bankruptcies in California Associated Press Newswires, 06/01/01 Saudi Gas Ventures May Offer Promise, Small Returns (Update1) Bloomberg, 06/01/01 PBS's Frontline to Air First Television Investigation of California Energy Crisis 06/01/2001 PR Newswire (Copyright © 2001, PR Newswire) 'Blackout' is a FRONTLINE co-production with The New York Times BOSTON, June 1 /PRNewswire/ -- FRONTLINE and The New York Times join forces to investigate the story behind the California energy crisis in "Blackout," a new documentary airing Tuesday, June 5, at 10 P.M. on PBS (check local listings). Through interviews with utility executives, industry insiders, and state and federal officials, the one-hour documentary examines how profits of both power companies and energy-trading giants have soared amid a deregulation process that has produced blackouts and rate hikes for consumers. The program also explores why the federal government refused for months to intervene in the California crisis, as well as the rationale for dismantling the old system of utility regulation. "Blackout" examines the importance of a new kind of megacorporation: giant, national holding companies that trade electricity and gas much like any other commodity. With names like Enron, Dynegy, Reliant, and El Paso -- and with close ties to high-ranking Republican and Democratic officials -- these energy traders have seen their profits explode in recent years even as consumers endured power shortages and rate hikes. FRONTLINE and The New York Times interview key figures on both sides of the energy debate, including Vice President Dick Cheney, California Governor Gray Davis, Enron CEO Jeff Skilling, and Curt Hebert, chairman of the Federal Energy Regulatory Commission (FERC). State utility executives and citizens' advocates, who charge that California's deregulation fell prey to market manipulation, are also interviewed. Following the broadcast, viewers can learn more about the energy crisis by logging on to FRONTLINE's companion "Blackout" Web site -- http://www.pbs.org/frontline/shows/blackout. In addition to articles and in- depth interviews on the power crunch, the site will feature graphs and timelines illustrating the origins of the California crisis, America's historical and projected power usage, and the profits of the major power companies and energy-trading giants. The site also will offer an analysis of the Bush administration's energy plan. MAKE YOUR OPINION COUNT - Click Here http://tbutton.prnewswire.com/prn/11690X68531669 /CONTACT: Erin Martin Kane of FRONTLINE, 617-300-3500, erin_martin_kane@wgbh.org; or Diane McNulty of The New York Times, 212-556-5244 mcnuldc@nytimes.com/ 12:40 EDT Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Energy wholesalers on PG&E committee accused of conflict By KAREN GAUDETTE Associated Press Writer 06/01/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. SAN FRANCISCO (AP) - Two of the same energy wholesalers accused of driving Pacific Gas and Electric Co. into bankruptcy with high power prices asked a federal bankruptcy judge Friday to let them keep selling electricity to the utility. Critics say that could result in higher bills for ratepayers and less money for the rest of PG&E's creditors to share, if the wholesalers' high prices keep whittling away at the utility's remaining money. "We certainly don't believe they should get a safe harbor order so that they can do what they've done in the past," said Irving Sulmeyer, an attorney representing the city and county of San Francisco. Houston-based Enron Corp. and Dynegy Inc., like other power wholesalers, have denied gouging Californians on the price they pay for power. On Friday, the two companies asked U.S. Bankruptcy Judge Dennis Montali to let them keep selling electricity to PG&E's customers via the state Department of Water Resources, which has bought electricity on PG&E's behalf since January. Dynegy and Enron sit on the 11-member creditors committee that will play a huge role in how PG&E's fortunes are divided among the more than 50,000 banks, energy companies and cities to whom the utility owes money. The "safe harbor" would shield them from conflict of interest accusations. The committee members would be honor-bound not to share information with any branches of their companies able to profit from it. "They want to be absolved in advance," Sulmeyer said. "What are they so concerned about if they're not doing anything wrong?" Robert Moore, an attorney representing the voluntary creditors committee, said other committee members such as Bank of America and Merrill Lynch also are requesting safe harbors so they can continue trading stock and remain members. "At least four members of the committee would have to resign without it," Moore told the judge. Montali asked each committee member to file a declaration with the court requesting to trade either commodities (electricity) or securities (stock), and scheduled another hearing on the issue for June 12. --- http://www.pge.com http://www.canb.uscourts.gov Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. CANADA: Delays could unplug Enron's Ontario power plans. By Scott Anderson 06/01/2001 Reuters English News Service (C) Reuters Limited 2001. TORONTO, June 1 (Reuters) - A planned C$200 million ($130 million) power plant for southwestern Ontario may be in jeopardy if the provincial government continues to drag its feet on deregulating the province's electricity market, the head of Enron Corp.'s Canadian unit said on Friday. Enron, the Texas-based energy firm, is slated to build the 400-megawatt Moore project near Sarnia, Ontario. But construction of the plant is contingent on the government's date for opening the market to competition and time may be running out, Ron Milnthorp, president of Enron Canada, told Reuters in a telephone interview from Calgary. "I think we are really looking for a fall date as an optimum time for us to align our interests with Ontario," Milnthorp said. "If it's put off until spring, I do believe that the project is somewhat in jeopardy and would need to be assessed from an operational standpoint against all other opportunities that Enron has on its plate." Ontario said in April that deregulation would be brought into effect by the late spring of 2002, but was accused of raising market uncertainty by not setting a specific target date. The government may have a better idea of its timetable in September, after a key study by the Independent Electricity Market Operator (IMO) and the Ontario Energy Board (OEB) is finalized. The two have set up a joint task force to prepare for an open the wholesale and retail electricity market. Milnthorp said Enron still holds out hope the province will give a target date soon after the September study is released. "The problem is date certainty. The way things are structured, they have a conditional announcement," he said. "We would really like to have a date so that we can start investing further capital in that project." Although Milnthorp said Enron is "still committed to Ontario," he said the company will not invest any further until there is greater certainty. "We're on hold at this point," he said. "You can't conditionally invest capital. Capital investment is unconditional and we're looking for a date that is unconditional also, and I think that is consistent with Enron and other outside investors who are going to have the same opinion." The company needs about six to 12 months to build the new plant, he said. The turbines and most of the required permits are already in place. Ontario, Canada's most populous province, has already pushed back its original deregulation deadline of November 2000 by one year to try to avoid the kind of problems encountered in California and to a lesser extent in Alberta. California's electricity deregulation has been plagued by skyrocketing costs, bankruptcy and rolling blackouts as power demand has increased dramatically, while little new generating capacity has been added in the past 10 years. In Alberta, consumers have been hit with a series of cost increases as the province deregulates its power sector. Enron officials say Ontario should not be viewed in the same light as California or Alberta. While California's concerns are purely one of supply and demand, Ontario already has adequate generating facilities to fuel the needs of the province. "There are significant differences between Ontario and California and there is absolutely no expectation that the scenario that is unfolding in California now will unfold in Ontario," said Aleck Dadson, senior director of governmental affairs at Enron. ($1=$1.53 Canadian). Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: NewPower sees savings from smart energy technology. 06/01/2001 Reuters English News Service (C) Reuters Limited 2001. NEW YORK, June 1 (Reuters) - NewPower Holdings Inc. said it will conduct three pilot programs in Philadelphia to test consumers' reaction to "smart" energy saving technology. With the restructuring of the electricity industry, energy companies expect to offer customers new products and services designed to save money and conserve energy. These new products, however, require "smart" meters that tell "smart" device to operate when the cost of generating electricity is cheapest. Some of these "smart" meters and devices are now available to large commercial and industrial consumers but, for the most part, are either too expensive or in the development stage for the average homeowner, pending testing in pilot programs like the NewPower program. "Energy restructuring leads to technological innovation, efficiency and environmental benefits," said H. Eugene Lockhart, The New Power Co.'s president and chief executive officer. Almost all utilities still sell power to residential customers at flat rates throughout the day regardless of what that power costs in the wholesale market. "These pilots are a wonderful example of control being shifted from the utility to the consumer. The nation's move to energy restructuring makes it possible for consumers to better manage their energy needs," Lockhart said. THE PILOT PROGRAMS The three pilots consisting of 100 households each will include: a time-of-use metering pilot; an HVAC (heating, ventilation and air conditioning) load control pilot, and an interactive pilot allowing consumers to remotely access their thermostat from any Internet-enabled device. New Power said it will install meters in consumers homes in the time-of-use metering program. the meters record daily energy use and will enable NewPower to better understand typical energy consumption patterns. In the HVAC load control pilot, NewPower will install air conditioning programmable thermostats in 100 homes to gauge customers' reaction to having NewPower remotely alter their thermostat setting by 2 to 6 degrees to help the homeowner better manage their energy usage and costs. In the remote energy management system pilot, consumers can change their thermostat setting from any Internet-accessible device. However, unlike the HVAC load control pilot, NewPower said the customer always remains in control and may override the adjustment at any time from the Web or a wireless device. The pilot programs will run from early June to the end of September - the peak season for energy consumption when air conditioning pushes electric demand to annual peaks. NewPower Holdings, based in Purchase, N.Y., through its subsidiary The New Power Co., is the first national provider of electricity and natural gas to residential and small commercial customers in the U.S. - Scott DiSavino, New York Power Desk, +646-223-6072, fax +646-223-6079, e-mail scott.disavino@reuters.com. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Amer Elec Power Completes Houston Pipe Line Buy <AEP ENE 06/01/2001 Dow Jones News Service (Copyright © 2001, Dow Jones & Company, Inc.) COLUMBUS, Ohio -(Dow Jones)- American Electric Power Co. (AEP) completed the purchase of Houston Pipe Line Co. from Enron Corp. (ENE) for $726.6 million. In a press release Friday, American Electric said it will raise the money for the acquisition by issuing a noncontrolling, preferred equity stake to private investors. The acquisition included Houston Pipe Line's inventory and a 30-year pre-paid lease for the Bammel storage facility. American Power now has daily gas capacity of about 3.2 billion cubic feet and more than 6,400 miles of natural gas pipeline across Louisiana and Texas. New York Stock Exchange-listed shares of American Electric closed Friday at $49, down $1.20, or 2.4%, on composite volume of 1 million shares, about 12% higher than average daily volume. Company Web site: http://www.aep.com -Pamela Tate; Dow Jones Newswires; 201-938-5400 Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. California Lawmakers Weigh Plan to Let Business Shoulder Burden of Utility Rescue By Jason Leopold 06/01/2001 Dow Jones Business News (Copyright © 2001, Dow Jones & Company, Inc.) Dow Jones Newswires LOS ANGELES -- Lawmakers in California are mulling yet another set of ideas for rescuing embattled utility Southern California Edison, and this time businesses would be on the hook. In an attempt to deflect charges of a bailout that have thus far stymied efforts to restore the Edison International (EIX) unit to solvency, legislators are now considering ways to shift the burden of financing the rescue from residential ratepayers to the state's largest businesses, aides to key state lawmakers said this week. The ideas being worked over by Senate President Pro Tem John Burton, Assembly Speaker Robert Hertzberg and Assemblyman Fred Keeley have yet to take shape as formal proposals. But an aide to Mr. Burton said some key lawmakers are so "desperate" to keep Southern California Edison from following PG&E Corp. (PCG) unit Pacific Gas & Electric Co. into a bankruptcy filing that they are willing to consider anything that will take residential consumers out of the equation. "The idea is that the large industrial customers are the ones who pushed for deregulation in the first place, so they should be responsible for bailing out Edison," the aide said. "We're looking to take the burden off of residential ratepayers." The premise of a plan discussed by lawmakers Thursday is to designate Southern California Edison's largest commercial ratepayers as non-core customers. Those customers -- some 3,600 users of more than 500 kilowatt-hours a month -- would be responsible for financing the cost of power the utility must purchase or have purchased for it in the wholesale market. The non-core customers would also help the utility recoup most of its $5.5 billion in unrecovered power costs through a surcharge on their bills. Core residential customers would be protected from the wholesale power market as the primary beneficiaries of the low-cost power the utilities generate themselves or have locked up in long-term contracts. The core/non-core proposal is one of several being discussed by lawmakers as alternatives to a memorandum of understanding California Gray Davis struck with Edison in April. The pact -- which doesn't vary much from an agreement in principle reached in February - - has been called dead on arrival by some lawmakers, who have been mulling various alternatives rather than moving the agreement forward. Dominic DiMare, a lobbyist with the California Chamber of Commerce, said the chamber has told the Davis administration that shifting the burden of the Southern California Edison bailout to businesses is "a very bad idea" that could cost the state billions of dollars in economic activity. "This (plan) would really screw businesses," Mr. DiMare said. "We just got hit with a 50 to 90% rate increase. We're dangerously close to losing our businesses to other states." Separately, Enron Corp. (ENE) has been lobbying lawmakers for several weeks to win approval to sign power-supply contracts with Southern California Edison's largest commercial customers, leaving the utility to serve just its residential customers and small businesses, aides to Gov. Gray Davis, Mr. Burton and Mr. Hertzberg said. An Enron executive confirmed that the company sent a four-page proposal to Hertzberg proposing that Southern California Edison's large industrial customers sign so-called direct-access contracts with Enron. Enron also has recently made a presentation about direct access to some members of the California Chamber of Commerce. Under the proposal, heavy users would be required to contract directly with companies like Enron for their power. Direct access was a key part of the state's 1996 deregulation plan, but was scrapped early this year when the state started buying wholesale power in place of the utilities. Write to Jason Leopold at jason.leopold@dowjones.com Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Williams CEO fears bankruptcies in California 06/01/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. TULSA, Okla. (AP) - Allegations of price fixing are locking energy suppliers out of efforts to solve California's power squeeze, the head of a Tulsa-based energy provider says. "We have been demonized to the point that we are not a credible voice politically," said Keith Bailey, chairman, president and chief executive officer of Williams. California energy regulators say they are close to finishing probes into whether electricity wholesalers illegally manipulated the power market, driving up prices. The Federal Energy Regulatory Commission earlier this year alleged that Williams profited from the closure of two Southern California power plants owned by a business partner, Arlington, Va.-based AES Corp. Williams admitted no wrongdoing but refunded $8 million to settle the charges. California's inv-estigations are examining the conduct of Williams, as well as that of other wholesalers, including Houston-based Enron Corp., Dynegy Inc., and Reliant Energy, Charlotte, N.C.-based Duke Energy and Atlanta-based Mirant Corp. Bailey said California owes Williams more than $600 million for electricity sold to the state. He said California lawmakers must act soon if they want to keep the state's struggling electric utilities from going bankrupt. Bailey said the matter could be assigned to a bankruptcy judge if lawmakers fail to establish a plan to restore the financial health of those utilities. Williams supports short-term price controls to get the utilities back on track. The company also supports Gov. Gray Davis' efforts to pass legislation that would help Southern California Edison, the state's second-largest power provider, pay its debts. California's largest utility, Pacific Gas & Electric, rejected a similar deal and filed for bankruptcy protection. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Saudi Gas Ventures May Offer Promise, Small Returns (Update1) 2001-06-01 14:26 (New York) Saudi Gas Ventures May Offer Promise, Small Returns (Update1) (Updates first, second paragraphs to reflect that Enron quit the project. Adds quote in 18th paragraph.) London, June 1 (Bloomberg) -- Exxon Mobil Corp., BP Plc, Royal Dutch/Shell Group and four other energy companies are set to spend $25 billion on Saudi Arabian natural gas ventures that some analysts say may barely meet managements' profit targets. Along with Total Fina Elf SA, Conoco Inc., Phillips Petroleum Co. and Occidental Petroleum Corp., the partners are scheduled to sign agreements this weekend for the three projects. Their annual return on investment may at best be 15 percent, a level some companies call the minimum to justify spending, analysts said. ``Fifteen percent might be a limit,'' said Jon Wright, an analyst at Merrill Lynch & Co. ``But maybe they are taking the view that, `We need to be here, we have to be here and it's a major, important area.''' Flush with cash -- Exxon, Shell and BP alone posted net income of $41.5 billion last year -- oil companies are seeking the best ways to meet annual growth in energy demand while maximizing profits. Saudi Arabia has said those who help now will likely get first crack at the nation's oil fields, the world's largest, should they open to foreigners. Executives from the seven partners are scheduled to sign the agreements Sunday in the Red Sea coast city of Jeddah, ending years of talks and marking the return of Western oil companies to the kingdom for the first time in two decades. Financial terms of the ventures are to be negotiated later this year. ``It's unlikely to contribute to the bottom line in the short term,'' said Roger Richards, who helps manage more than 3 billion pounds ($4.26 billion) in the U.K. for Prudential Bache Ltd. clients. Still, ``it's important to the majors to be in such an important gas province when it's potentially the door to getting back into Saudi oil.'' Further Talks Development of gas fields to fuel power plants and water desalination factories is part of Saudi Arabia's plan to convert its power industry from running on oil to gas. The nation wants to free more crude oil for export and provide jobs for the estimated 15 percent of the population who are unemployed. Many analysts said the return on investment will barely match the companies' targets -- in Shell's case, 15 percent return based on oil prices at less than half of today's levels. U.S. brokerage Fahnestock & Co. estimates returns from the Saudi projects at 10 percent to 15 percent. Deep-water oil and gas drilling can pay back 40 percent a year, said J.J. Traynor, an analyst at Deutsche Bank AG in Edinburgh, Scotland. ``The line in the sand for the major oils is a 15 percent return -- they won't go below that,'' Traynor said. ``In the long term, maybe oil becomes available. That's 10 or 20 years away, but you have to be there now.'' Lee Raymond, Exxon's chairman and chief executive, has said he expects returns from the Saudi ventures in the ``mid to high teens.'' That's lower than the 20.6 percent return on capital Exxon posted last year and rival BP's 23 percent return, when adjusted for special items. Little Risk The benefits of going into Saudi are twofold, analysts said. Firstly, the winners will have a lead should the country open access to its crude oil reserves. Secondly, the projects carry little risk compared to exploratory drilling that can cost millions for nothing more than a hole in the ground. Much of the Saudi reserves are already mapped, and the government understands it needs Western capital and expertise. ``It's in the Saudis' interests to get Western oil companies involved again,'' said Will Claxton-Smith, director of U.K. equities at Clerical Medical Investment Group Ltd., which owns BP and Shell shares. ``You wouldn't want them to be left out.'' The kingdom has not yet named the leaders of the $17 billion South Ghawar gas project, the centerpiece of its plan, or the $4 billion Shaybah field. Companies selected for these two developments include Exxon, Shell, BP, Phillips, Conoco and Total. Saudi Arabia picked Exxon to lead the estimated $4 billion Red Sea gas development project, with Occidental and Enron Corp. as junior partners. Enron Quits Enron today withdrew from the venture, leaving partner Occidental to absorb its role, Enron spokesman Alex Parsons said. He declined to say why Enron pulled out. The company has been moving away from large infrastructure projects to focus on trading natural gas, electricity and other commodities. ``If we have a continued association with this project, it will be to provide services under a separate contract directly with Occidental,'' Parsons said. Once the ink dries this weekend, financial negotiations between the kingdom and the companies should take months, analysts said. ``The companies are keen to get their foot through the door but they're not going to throw shareholders' money away,'' said Leo Drollas, deputy executive director of the Centre for Global Energy Studies, which was founded by former Saudi oil minister Sheikh Zaki Yamani. ``They are not philanthropic institutions. If they're not happy, they won't do it.''
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