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Enron Mail |
It looks like we are playing a smaller role than the WSJ article indicates --
i.e. a role commensurate with our level of interest. I have talked with John several times about the relative importance of OPIC, ExIm and other funding organizations in light of the change in emphasis in our business. As a result of those discussions we cut headcount and expenditures from the proposed budget for "01 and John has joined Linda Robertson's organization in the DC office (instead of being a stand alone effort). Having said that, my view (based on the work John has been doing) is that we continue to have a considerable amount of work for him to do on the project finance front as a result of existing projects, projects we continue to pursue, and transfer issues associated with the asset sales. Do you agree? ----- Forwarded by Steven J Kean/NA/Enron on 03/07/2001 11:27 AM ----- John Hardy@ENRON_DEVELOPMENT 03/07/2001 10:59 AM To: Steven J Kean/NA/Enron@ENRON cc: Subject: Re: Enron Mentions Steve This is not a battle to fight with OMB, but we have to show the agencies that we are supportive of their programs and their budgets. We are not going to lead the battle and in fact have not particpated in meetings on the hill. But we are in negotiations with both EXIM and OPIC on Electrobolt and will need their support on our problem projects. Also, Rebecca McDonald is on EXIM's private sector advisory committee. If you need more lets talk. Thanks John Steven J Kean@ENRON 03/07/2001 11:43 AM To: John Hardy/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Linda Robertson/NA/Enron@ENRON Subject: Enron Mentions How important is this fight to us now (see attached article on ExIm)? ----- Forwarded by Steven J Kean/NA/Enron on 03/07/2001 10:41 AM ----- Ann M Schmidt 03/07/2001 08:19 AM To: Ann M Schmidt/Corp/Enron@ENRON cc: (bcc: Steven J Kean/NA/Enron) Subject: Enron Mentions Exporters Rush to Ex-Im Bank's Defense --- Lobby Campaign to Prevent Budget Cuts Seeks Help Of 100,000 Small Firms The Wall Street Journal, 03/07/01 Plots & Ploys The Wall Street Journal, 03/07/01 Dutch Gas Competition Grows Despite Sluggish Reforms Dow Jones Energy Service, 03/07/01 USA: Big U.S. exporters to fight Ex-Im Bank cuts - WSJ. Reuters English News Service, 03/07/01 Major U.S. Exporters Rush to Export-Import Bank's Defense Dow Jones Business News, 03/07/01 What's News United States The Globe and Mail, 03/07/01 Deal with state could take until 2002 to close Associated Press Newswires, 03/06/01 Sierra Pacific CEO Doubts SEC OK Of Enron Unit Buy-Report Dow Jones Energy Service, 03/06/01 Many Power Deals Announced by California Governor Still Not Final Dow Jones Business News, 03/06/01 US Natural Gas Prices Fall As Demand Slips In Most Areas Dow Jones Energy Service, 03/06/01 Economy Exporters Rush to Ex-Im Bank's Defense --- Lobby Campaign to Prevent Budget Cuts Seeks Help Of 100,000 Small Firms By Michael M. Phillips and Laura Heinauer Staff Reporters of The Wall Street Journal 03/07/2001 The Wall Street Journal A2 (Copyright © 2001, Dow Jones & Company, Inc.) WASHINGTON -- Angry and confused that a Republican administration has targeted one of their favorite programs for big cuts, America's largest exporters are appealing for help from lawmakers. Boeing Co., Caterpillar Inc., Enron Corp., Halliburton Co. and others are launching an aggressive lobbying campaign on Capitol Hill to protect the Export-Import Bank from budget reductions; the White House labels the Ex-Im Bank as corporate welfare. "The administration has fired its shot, and now we're firing ours," said Edmund B. Rice, president of the Coalition for Employment Through Exports, an industry group that is leading the effort. Since they got wind of the proposed cuts a few weeks ago, business lobbyists have been trying to rally sympathetic lawmakers. And executives at Boeing, Caterpillar and other big companies plan to contact some 100,000 smaller suppliers that benefit indirectly from the $12.6 billion of export loans, guarantees and insurance that Ex-Im Bank provided in the last fiscal year. Those small companies, the executives hope, will create a groundswell of support in Congress for the Ex-Im Bank. "Companies large and small who have similar interests here are banding together to provide an educational effort so people understand the impact of this," said Chris Hansen, Boeing senior vice president for government relations. Corporate lobbyists also have dug up a speech that Vice President Dick Cheney, while chief executive of Halliburton, gave in 1997 praising the bank and scoffing at those who consider it a giveaway to big business. They plan to pass Mr. Cheney's comments to influential members of Congress this week. "We'll be circulating them very broadly," Mr. Rice said. A spokeswoman for Mr. Cheney had no immediate comment. Ex-Im Bank officials aren't talking publicly, avoiding the appearance that they are battling the White House to overturn the proposed 25% cut in the bank's $865 million operating budget for the current fiscal year, which ends Sept. 30. But an Ex-Im official said the topic has come up in conversations between key lawmakers and Ex-Im Bank Chairman James A. Harmon, who is soon to be succeeded by Mel Sembler, a Bush campaign fund-raiser and a shopping-center developer. At first, business lobbyists assumed administration budgeteers were just looking for savings anywhere they could find it. Before President Bush released his spending plan last week, companies appealed to Mitchell Daniels, head of the White House budget office, in an attempt to keep the Ex-Im Bank cuts out of the final proposal. The Ex-Im Bank's corporate clients include some of the country's largest political contributors. Boeing, the bank's largest user, received $3.3 billion of financing last year. The Seattle aerospace company and its employees contributed $1.8 million to politicians and parties during the 2000 election cycle, 61% to Republicans, according to federal election data assembled by the Center for Responsive Politics. Caterpillar, a Peoria, Ill., maker of engines and heavy equipment that secured seven Ex-Im Bank deals last year, and its employees contributed more than $500,000 -- 96% to Republicans. Company officials deny they wanted to leverage donations to try to secure political support for the Ex-Im Bank. Many lobbyists have come to the conclusion that administration officials -- those of a libertarian persuasion -- oppose Ex-Im Bank as a form of welfare for corporations. Indeed, the White House budget plan criticized the bank's operations as unjustified public subsidies for companies. "That makes it a much more serious issue," Mr. Rice said. "We're concerned that the administration seems to be turning its attention in this direction." Barring intervention from Mr. Cheney, business groups now have largely given up hope of convincing the White House to back down, planning instead to use their muscle to convince Congress to restore the Ex-Im Bank's funding. Bank officials and U.S. companies argue that, far from being a subsidy, the bank simply allows American companies to compete with European and Japanese firms that receive assistance from their own governments. "In many markets in Asia and Africa, the bank is absolutely critical to our ability to sell American-made products," said Bill Lane, Caterpillar's Washington director for governmental affairs. --- Corporate Beneficiaries Top 10 recipients of Ex-Im Bank loans, guarantees and insurance for fiscal year 2000, as measured by amount of financing, in millions Boeing $3,335 Bechtel Group $1,075 Distributed Processing Systems $388 Willbros Group $387 United Technologies $334 Raytheon $156 General Electric $150 Halliburton $136 Enron $135 LSI Logic $120 Source: Ex-Im Bank Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. The Property Report Plots & Ploys By Peter Grant 03/07/2001 The Wall Street Journal B10 (Copyright © 2001, Dow Jones & Company, Inc.) [What's Brewing in the Real Estate Market] No Problem, Houston CENTURY DEVELOPMENT is about to announce plans to break ground on downtown Houston's third major office development in less than three years. In another sign of the strength of the city's energy sector, Century is finalizing a headquarters deal with Reliant Resources Inc. to take more than two-thirds of the project's 850,000 square feet, says Edwin Murphy, a Century senior vice president. Two other towers also are underway. In 1999, Hines began building a 1.2 million square-foot tower for Enron Corp. and late last year Crescent Real Estate Equities broke ground on a 27-story tower that will be anchored by Ernst & Young. These three projects are the first major downtown office projects to get underway since 1986. The surge is part of a renaissance of downtown Houston, where new sports facilities, hotels, apartment buildings and restaurants have been mushrooming in recent years. "The new amenities have kept people from leaving and enticed people to come back," says Michael Hassler, of CB Richard Ellis. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Dutch Gas Competition Grows Despite Sluggish Reforms By Germana Canzi Of DOW JONES NEWSWIRES 03/07/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) LONDON -(Dow Jones)- The Netherlands is emerging as an important testing ground for E.U. gas liberalization, as new trading hubs for competitive, short-term gas supplies from the U.K. and Norway emerge on the Belgian and German borders. However, much remains to be done. A group of large energy users and traders is preparing to confront Gasunie Thursday in a hearing organized by the regulator. The main issues of contention are the balancing system, which Gasunie conducts on an hourly basis, the extent to which transport tariffs are cost-focused and third-party access to storage facilities. The emergence of competition in the Dutch gas sector is mostly due to the initiative of new market entrants who, despite a difficult regulatory environment, have managed to develop a market for short-term gas virtually from scratch. If liquidity improves in these emerging hubs, the Netherlands could become an important transit country for freely tradeable gas supplies to other countries in northwest Europe, as well as being an important market in its own right. However, the difficulty of implementing transparent third-party access systems in the Netherlands and in neighboring Germany casts a dark cloud over recent progress in competition. Since December, Enron Europe Ltd. (U.ENE), Duke Energy Corp. (DUK), E.On AG (EON), RWE AG (G.RWE) and Electrabel SA (B.ELE) have been actively buying and selling gas, sourced in the U.K., the Netherlands and Norway, in a number of hubs between Emden in Germany and Emshaven and Oude Statenzijl in the Netherlands. David Gallagher, head of European gas trading at Enron in London, estimates that at least one trade a day of around 100,000 therms for a quarterly contract is done at the Oude Statenzijl hub, where the Gasunie pipeline system connects to the network of Wingas GmbH. An important element kick-starting short-term trading was the sale, in December 2000, of a 2 billion cubic meter a year Norwegian gas supply contract to five Dutch-based power generators. Robert van der Hoeven, head of fuel procurement at Electrabel, the owner of Dutch generator EPON, said his company uses most of the gas it imports from Norway for its plants in the Netherlands and trades the rest on a short-term basis in the Oude-Emden area. This pattern is common to the other Dutch-based parties to that contract. Trading in Dutch hubs received a further boost when Nederlandse Gasunie NV (N.NEG) decided, after months of wrangling with regulator DTe, to lower its transport tariffs by 6.5% from January 2001 and to unbundle its combined commodity and service tariff, the so-called CSS system, from July 2001. Gasunie now claims its pipeline system is fully open and transparent. To prove this, it says it has lost 30% of its customers in the eligible market, but that figure hasn't changed much since March 2000. Small wonder that critics say the switching figure doesn't necessarily indicate an ideal system of third-party access. According to energy consultants The Brattle Group, around half of the gas used by alternative suppliers goes through the 1 bcm/year Zebra pipeline from Zelzate to Zeeland, which was built by Dutch utilities a few years ago precisely because Gasunie refused to provide access on favorable terms. Shippers have complained that the hourly system used by Gasunie to balance the pipeline system raises the overall cost of shipping through its network significantly. Gasunie imposes a balancing charge which effectively forces shippers to pay for the extra gas brought into the system from storage sites, in addition to the capacity and transmission price. Critics say Gasunie has so far failed to unbundle these charges, although it agreed to do so in January. According to the Brattle Group, another controversial aspect of Gasunie's tariff system is that it is based on theoretical costs of constructing new pipelines rather than its actual costs. The DTe is also considering ways of reforming the storage system to make it competitive. BP PLC (U.BP) and Nederlandse Aardolie Maatschappij NV operate storage facilities and lease capacity to Gasunie through long-term contracts. The regulator is studying ways of allowing third parties access to storage facilities. Gasunie has so far shown little sign of negotiating more competitive tariffs with storage operators and passing on the benefits to customers, critics say. The growth of short-term trading in the Dutch gas market is also inevitably linked to its potential as a transit country for gas coming from the U.K.-Belgium gas interconnector and going towards the 82bcm-a-year German market. Market participants say liquidity at the Emden and Oude hubs has grown considerably since E.On and RWE started trading there earlier this year. However, the obstructive attitude of incumbents toward third-party access there has meant that so far most gas traded in the Netherlands has remained there. -By Germana Canzi, Dow Jones Newswires; +44 20 7842 9283; germana.canzi@dowjones.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: Big U.S. exporters to fight Ex-Im Bank cuts - WSJ. 03/07/2001 Reuters English News Service (C) Reuters Limited 2001. NEW YORK, March 7 (Reuters) - America's largest exporters are launching an aggressive lobbying campaign on Capitol Hill to protect the Export-Import Bank from budget reductions, the Wall Street Journal reported in its online edition on Wednesday. The exporters, including Boeing Co. , Caterpillar Inc. , Enron Corp. , Halliburton Co. and others, are angry and confused that a Republican administration has targeted one of their favourite programmes for big cuts, the paper reported. Ex-Im Bank officials were not talking publicly, avoiding the appearance that they are battling the White House to overturn the proposed 25 percent cut in the bank's $865 million operating budget for the current fiscal year, which ends Sept 30, it said. The White House labels the Ex-Im Bank as corporate welfare. "The administration has fired its shot, and now we're firing ours," Edmund Rice, president of the Coalition for Employment Through Exports, an industry group that is leading the effort, was quoted as saying by the paper. Executives at Boeing, Caterpillar and other big companies plan to contact some 100,000 smaller suppliers who benefit indirectly from the $12.6 billion of export loans, guarantees and insurance that Ex-Im Bank provided in the last fiscal year, the paper said. Those small companies, the executives hope, will create a groundswell of support in Congress for the Ex-Im Bank, it said. New York Newsroom (212) 859-1700. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Major U.S. Exporters Rush to Export-Import Bank's Defense 03/07/2001 Dow Jones Business News (Copyright © 2001, Dow Jones & Company, Inc.) WASHINGTON -- Angry and confused that a Republican administration has targeted one of their favorite programs for big cuts, America's largest exporters are appealing for help from lawmakers, Wednesday's Wall Street Journal reported. Boeing Co. (BA), Caterpillar Inc. (CAT), Enron Corp. (ENE), Halliburton Co. (HAL) and others are launching an aggressive lobbying campaign on Capitol Hill to protect the Export-Import Bank from budget reductions; the White House labels the Ex-Im Bank as corporate welfare. "The administration has fired its shot, and now we're firing ours," said Edmund B. Rice, president of the Coalition for Employment Through Exports, an industry group that is leading the effort. Since they got wind of the proposed cuts a few weeks ago, business lobbyists have been trying to rally sympathetic lawmakers. And executives at Boeing, Caterpillar and other big companies plan to contact some 100,000 smaller suppliers that benefit indirectly from the $12.6 billion of export loans, guarantees and insurance that Ex-Im Bank provided in the last fiscal year. Those small companies, the executives hope, will create a groundswell of support in Congress for the Ex-Im Bank. Corporate lobbyists also have dug up a speech that Vice President Dick Cheney, while chief executive of Halliburton, gave in 1997 praising the bank and scoffing at those who consider it a giveaway to big business. They plan to pass Mr. Cheney's comments to influential members of Congress this week. A spokeswoman for Mr. Cheney had no immediate comment. Ex-Im Bank officials aren't talking publicly, avoiding the appearance that they are battling the White House to overturn the proposed 25% cut in the bank's $865 million operating budget for the current fiscal year, which ends Sept. 30. But an Ex-Im official said the topic has come up in conversations between key lawmakers and Ex-Im Bank Chairman James A. Harmon, who is soon to be succeeded by Mel Sembler, a Bush campaign fund-raiser and a shopping-center developer. Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Report on Business: The Wall Street Journal What's News United States Wall Street Journal 03/07/2001 The Globe and Mail Metro B10 "All material Copyright © Bell Globemedia Publishing Inc. and its licensors. All rights reserved." Boeing Co., Caterpillar Inc. and Enron Corp. are among the big U.S. exporters launching an aggressive lobbying campaign on Capitol Hill to protect the Export-Import Bank from budget reductions. The White House labels the Ex-Im Bank as corporate welfare. "The administration has fired its shot, and now we're firing ours," said Edmund Rice, president of the Coalition for Employment Through Exports, an industry group leading the campaign. Since they got wind of the proposed cuts a few weeks ago, business lobbyists have been trying to rally sympathetic U.S. law makers. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Deal with state could take until 2002 to close By LESLIE GORNSTEIN AP Business Writer 03/06/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. LOS ANGELES (AP) - A tentative deal aimed at rescuing Southern California Edison from insolvency might not close in time to prevent the utility from begging creditors for more patience, Edison officials said Tuesday. The utility's tentative, $2.7 billion agreement to sell its power lines to the state could take until 2002 to be consummated, thanks to complicated legal issues and other paperwork, an Edison official told bondholders Tuesday. Once the deal is signed, Edison will try to borrow against the promised cash, but Edison International Chief Financial Officer Ted Craver admitted the utility might have to ask creditors to simply wait for their money until it has the $2.7 billion in hand. Energy suppliers owed money by Edison did not immediately return calls for comment Tuesday. At least four groups of suppliers have sued Edison for millions in unpaid bills going back months. Edison and fellow utility Pacific Gas & Electric have said they have lost $13 billion on the open power market thanks to soaring prices paired with state-imposed price caps. PG&E's parent company was able to recently borrow $1 billion to pay its stockholders and its debuts. It did not use any of that money to pay PG&E's bills. Edison's disclosure, meanwhile, shocked state officials. Steve Maviglio, spokesman for Gov. Gray Davis, initially declined to comment on the status of the Edison deal, but eventually said, regarding its closure, "We're optimistic it will be sooner rather than later." The pacing would have nothing to do with whether fellow utilities Sempra Energy and PG&E also sell their transmission lines to California, Craver said. Among the things that could delay the deal's closing is Edison's need to find landowners on whose property its lines were built to assure no legal agreements are being violated by the sale. Edison would also have to pin down exactly what it would be selling to the state - terms that might not be decided until after a deal has been inked, Craver said. "Trust me," Craver said in a phone call after the conference. "There are a lot of legal-type documents - stuff that you and I ... would think of as a bloody nightmare." The disclosure comes at a time when an increasing number of power suppliers are suing the utility for millions in unpaid bills. Edison also disclosed Tuesday that two more lawsuits had landed in its lap - one by a group of wind-powered generators including Enron Wind, the other by two suppliers including New York-based Caithness Energy. Both suits were filed during the past five days, Edison Assistant General Counsel Barbara Reeves said. It was not immediately clear how much the complainants were seeking; neither Enron nor Caithness returned calls for comment. The two filings bring the total number of suits by renewable-energy suppliers against Edison to four, the utility said. The city of Long Beach and CalEnergy Operating Group, a geothermal supplier, have also sued for back payments. CalEnergy alone has said it is owed $45 million in November and December payments. The line sale, part of a multifaceted, tentative deal with the state that could save Edison from insolvency, could take anywhere from several months into next year, Craver said. The tentative deal, announced by Gov. Gray Davis Feb. 23, calls for the state to pay more than twice the book value for Edison's lines. It also would require Edison to sell cheap power to the state for a decade and for Edison to end its lawsuit against state regulators. The suit asserts that price caps imposed by the California Public Utilities Commission are illegal under federal law. Additionally, Edison's parent would have to return $420 million it collected from the utility over the past several years. The money was used to pay debt, buy back stock and pay dividends to investors. SCE, PG&E and Sempra have complained they are near bankruptcy because of soaring prices on the open market combined with the state-imposed price caps for consumers. Sempra and PG&E have yet to announce similar line-sale deals with the state, though they and the governor have said negotiations are ongoing. The total cost of the 26,000 miles of lines has been estimated at $4.5 billion to $7 billion. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Sierra Pacific CEO Doubts SEC OK Of Enron Unit Buy-Report 03/06/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) LOS ANGELES -(Dow Jones)- Sierra Pacific Resources (SRP) CEO Walter Higgins said in an interview last week that he doubts the company's $3.1 billion acquisition of Enron Corp.'s (ENE) utility Portland General Electric will be approved by the federal Securities and Exchange Commission, the Las Vegas Sun reported Tuesday. The SEC must find that Sierra Pacific is in a strong financial position before it will approve the deal, but the company is currently weakened by having lost millions of dollars in fuel and purchased power costs, Higgins said in the report. A $311 million rate increase to cover those costs began March 1, but Higgins said that money would only pay back those expenses and wouldn't improve the company's stability to a level the SEC would find adequate, according to the report. The Public Utilities Commission can halt the rate hike and order refunds if it decides the hike isn't necessary. The PUC is holding hearings to determine the prudency of the hike, and members of the state's powerful casino and mining industries have filed to intervene. Sierra Pacific's plan to shore up its financial position through the sale of its 10 power plants, worth nearly $2 billion, may also be in jeopardy. The state Senate is considering a bill to block the sales, and Nevada Gov. Kenny Guinn recently sent a letter to the PUC asking that it reconsider its order allowing electric utilities to sell assets. Financial analysts have said that not allowing Sierra Pacific's two utilities to sell their assets would have a ripple effect on the company's financial position. The asset sales are tied to low-priced power contracts, and if the sales are canceled, the low-priced power will be gone as well. "If the divestiture is stopped...the state may be dealing with a much bigger rate increase," Steve Fleishman, Merrill Lynch utility analyst, told Dow Jones Newswires recently. Sierra Pacific is the parent company of electric utilities Sierra Pacific Power Co. and Nevada Power, which serve customers in the state's North and South, respectively. -By Jessica Berthold, Dow Jones Newswires; 323-658-3872, jessica.berthold@dowjones.com -0- 07/03/01 01-04G Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Many Power Deals Announced by California Governor Still Not Final By Jason Leopold 03/06/2001 Dow Jones Business News (Copyright © 2001, Dow Jones & Company, Inc.) Dow Jones Newswires LOS ANGELES -- Many of the long-term power-supply contracts announced by California Gov. Gray Davis this week remain under negotiation or are the subject of ongoing lawsuits, power suppliers said Tuesday. The lack of finality to the deals raises questions about the state's success in covering its power needs, particularly going into what is expected to be an unusually tight summer. Generators said privately they were surprised the governor went ahead with his announcement Monday, given that many of the contracts haven't been signed. David Freeman, general manager of the Los Angeles Department of Water and Power, who negotiated the contracts on behalf of the state, conceded that details remain to be worked out. "This is not a done deal," Mr. Freeman said, adding that credit concerns are keeping generators from signing the deals. Gov. Davis announced Monday that California has secured 40 long-term contracts that will provide California with about 629 million megawatt hours of electricity over 10 years, at a price of more than $40 billion. A megawatt hour is roughly the amount of electricity needed to power 1,000 homes. Several of those forward deals, however, involve contracts originally held by Edison International (EIX) unit Southern California Edison and PG&E Corp. (PCG) unit Pacific Gas & Electric at the California Power Exchange, previously the state's main power market. The governor seized those contracts earlier this year, just before the Power Exchange liquidated them to cover hundreds of millions of dollars in power bills the utilities had failed to pay. The contracts, which total about 1.3 million megawatt hours of electricity and have a market value of about $1 billion, according to market sources, have yet to be paid for or signed over to the state. Duke Energy Corp. (DUK), one of the suppliers that sold the contracts to Pacific Gas and SoCal Ed, has sued Gov. Davis for unlawfully commandeering those contracts. Although Duke has reached an interim settlement to continue providing power to the state Department of Water Resources until April 30, the company and the Davis administration still have to "develop a comprehensive long-term settlement to pay for the power supply contracts," said Duke spokesman Tom Williams. The governor went ahead with the announcement, because the California Department of Water Resources believes it will be able to finalize and sign the contracts over the next several weeks, Davis spokesman Steve Maviglio said. Separately, several suppliers named in the governor's announcement Monday -- including Duke, Reliant Energy Inc. (REI), Mirant Corp. (MIR), Sempra Energy, Enron Corp. (ENE) and Avista Corp. (AVA) -- said they have yet to sign final agreements with the state, although negotiations were ongoing. "We are working in good faith with the DWR toward a long-term contract," said Art Larson, spokesman for Sempra Energy Resources, a unit of Sempra. Mr. Larson said Sempra signed a terms of agreement with the water-resources department and expects to reach a final agreement over the next several weeks. Reliant said it has only signed a short-term contract with the state that expires in about two weeks. The company will only sign a long-term contract once it's paid more than $400 million owed by Pacific Gas and SoCal Ed, spokesman Richard Wheatley said. Mirant said it also won't sign contracts with the state until it's paid. Enron said it's reached agreement on terms with the state, but has some credit-related details to hammer out. "Everything's been agreed to except for some credit technicalities," Enron spokesman Mark Palmer said. Meanwhile, small, independent power plants in California that are capable of generating 1,800 megawatts of power are shut down because their owners haven't been paid by the state's two main utilities, the California Independent System Operator said Tuesday. The decline in small-plant output has contributed to the state's power-supply problems the past two months. Partnerships involving El Paso Corp. (EPG), for example, shut down 350 megawatts of generation last weekend due to nonpayment, the company said Tuesday. SoCal Ed hasn't paid the owners of the smaller generators, known as "qualifying facilities," since early December, which means the generators are still owed for electric production in October, while PG&E has paid only a small percentage of its qualifying facility bills since its last full payment in early January. The plants, one-third of which are powered by renewable sources like wind and solar power, meet almost 30% of California's electricity needs. Almost all of the closed generators are fueled by natural gas, and many haven't been able to pay their gas suppliers and have been cut off from their gas supply. The California Senate Energy Committee plans to vote on legislation to create a new pricing system for all qualifying facilities this week. The proposed bill would cut the prices to qualifying facilities from about 17 cents a kilowatt-hour the past eight months to about eight cents, depending on the price of five-year natural-gas contracts the generators can sign. The plants that run on renewable resources would be paid 5.4 cents a kilowatt-hour. -- Mark Golden contributed to this article. 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. US Natural Gas Prices Fall As Demand Slips In Most Areas 03/06/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) HOUSTON -(Dow Jones)- U.S. natural gas physical prices fell Tuesday as demand eased, except in the Northeast and Southeast areas of the country, traders said. Heavy snowstorms in the upper Northeast supported some pricing, as did cooler weather in Georgia, the Carolinas and the Florida panhandle. Some storage buying occurred in Texas "if they could make it work," a trader said. "It was a pretty uneventful day," a Gulf Coast trader said late Tuesday. Also, because of the snowstorm in the Northeast, traders had purchased gas ahead of time to make up for needed load, he said. A scheduled work outage on Enron's Transwestern San Juan lateral in New Mexico was completed, and the return of a power plant in California alleviated demand in the West, traders said. At the Arizona-California border hub, buyers paid around $13-$33 a million British thermal units, West Coast traders said, down as much as $15 from Monday. At PG&E Citygate, prices were mixed, with buyers paying $9.75-$10.65/MMBtu, down 25 cents on the bid, up 15 cents on the offer. In the Midwest, Chicago Citygate prices fell 7 cents-8 cents to a range of $5.42-$5.53/MMBtu. Alliance Pipeline into Chicago traded around $5.47-$5.52/MMBtu, down 4 cents to 9 cents from Monday. The Nymex April natural gas futures contract settled at $5.315/MMBtu, down 2.1 cents in a tight, range-bound, uneventful session that started late due to bad weather. Physical gas prices at the benchmark Henry Hub in south Louisiana ended in a range of $5.25-$5.30/MMBtu, down 2 cents-6 cents from Monday. Transcontinental Gas Pipe Line at Station 65 deals were made in a similar range of $5.26-$5.35/MMBtu, down 2 cents on the bid, unchanged on the offer. At Katy in East Texas, buyers paid $5.21-$5.30/MMBtu, down 5 cents-6 cents. At Waha, prices fell 9 cents-12 cents to a range of $5.15-$5.30/MMBtu. -By John Edmiston, Dow Jones Newswires; 713-547-9209; john.edmiston@dowjones.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.
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