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Please see the following articles:
Sac Bee, Thurs, 5/10: "PUC sweats $4.8 billion rate raise"
Sac Bee, Thurs, 5/10: "PG&E wants panel to get boot"
Sac Bee, Thurs, 5/10: "Major job losses predicted; governor presses
generators"
Sac Bee, Thurs, 5/10: "Bond-sale bill goes to Davis "
Sac Bee, Thurs, 5/10: "State revenue outlook shrinks "
SD Union, Thurs, 5/10: "No blackouts despite dip in supplies"
SD Union (AP), Wed, 5/9: "Biggest users face huge rate hikes under PUC plan"
LA Times, Thurs, 5/10: "Rate Hikes Up to 60" Proposed by PUC Chief"
LA Times, Thurs, 5/10: "Bush Energy Stance Begins to Worry Some in GOP"
LA Times, Thurs, 5/10: "In Office Buildings, the Lights Are On, But Nobody's
Home"
LA Times, Thurs, 5/10: "Power Shifts to Congress" (Commentary)
SF Chron, Thurs, 5/10: "Proud state forced to knees in power hunt"
SF Chron, Thurs, 5/10: "Power bills set to skyrocket for heavy users
Graduated rate increase would take effect in June "
SF Chron (AP), Thurs, 5/10: "Developments in California's energy crisis "
SF Chron (AP), Thurs, 5/10: "PG&E says fewer small power plants offline "
SF Chron (AP), Thurs, 5/10: "A look at two rate designs before power
regulators"
SF Chron, Thurs, 5/10: "Lights stay on despite failure of big plant"
SF Chron, Thurs, 5/10: "PG&E fights consumer committee
Obstruction feared in bankruptcy case "
SF Chron, Thurs, 5/10: "Generators silent on Davis plan
He offers lower compensation to stave off Edison bankruptcy "
Mercury News, Thurs, 5/10: "Rate plans shield most households"
Mercury News, Thurs, 5/10: "Energy bond plan gets final legislative OK,
faces delay"
Mercury News, Thurs, 5/10: "Fusion research gets a boost"
OC Register, Thurs, 5/10: "Power is Money
PUC details plan to raise Edison rates up to 34%. Half of users to see no
hike"
OC Register, Thurs, 5/10: "Economic crisis in forecast"
OC Register, Thurs, 5/10: "GOP stalls sale of bonds with vote"
OC Register, Thurs, 5/10: "Electricity notebook
Davis asks power suppliers to accept 30% less than owed"
OC Register, Thurs, 5/10: "Regulators says more electricity rate hikes are
likely"
OC Register, Thurs, 5/10: "Starting all over again
The Legislature's special session on the power crisis ends today -- with more
work to do at an added cost"
OC Register, Thurs, 5/10: "Davis is set to sign a $13.4 billion bond-issue
measure
today to cover electricity costs"
OC Register, Thurs, 5/10: "Papering over state electricity problems"
Individual.com (AP), Thurs, 5/10: "Task Force To Propose Legislation"
Individual.com (AP), Thurs, 5/10: "Stage 2 Electrical Emergency Declaration;
SCE to Curtail 'Load' for Some Customers"
Individual.com (Bridgenews), Thurs, 5/10: "[B] FULL/ Pacific Gas & Electric
restores all Qualifying
Facilities --Pacific Gas & Electric says 8 of 300 QFs still shut down"
------------------------------------------------------------------------------
-------------------------------------
PUC sweats $4.8 billion rate raise
By Carrie Peyton
Bee Staff Writer
(Published May 10, 2001)
Big industries' electric bills would leap 50 percent or more and household
bills would rise an average of 11 percent to 17 percent under two proposals
outlined by state regulators Wednesday for revamping electric rates.
The twin proposals are efforts by Loretta Lynch, president of the state
Public Utilities Commission, and Christine Walwyn, a PUC administrative
judge, to decide how to divide the burden of a $4.8 billion rate hike.
"Both of them are just going to be very, very hard on business," said Bill
Booth, an attorney for the California Large Energy Consumers Association. He
said it appeared that some cement and steel makers could face 90 percent rate
hikes.
But small consumers were equally dismayed.
"This never should have happened in the first place," said Bob Finkelstein,
an attorney with The Utility Reform Network, placing the blame for soaring
rates on electric deregulation.
"In terms of allocating the fallout from the failed experiment, they seemed
to do a reasonable job. But it assumes that the fallout should be allocated
in the first place, and that just sticks in our craw," he said.
Several PUC commissioners have said they want to select a new rate design at
a special meeting Monday, so the higher electric bills can begin going out
June 1 to customers of Pacific Gas and Electric Co. and Southern California
Edison.
One version before the PUC would include Lynch's call to begin looking for
ways to charge federal installations power rates that are tied to wildly
gyrating wholesale costs.
Reportedly first floated as a joke, the idea quickly took hold within the
PUC. Lynch said she wants to set it up as "pilot program," perhaps beginning
in mid-summer, so the federal government can test its own theories about
unfettered market prices being good for consumers.
"I don't believe it's a dig at the FERC (Federal Energy Regulatory
Commission)," she said during a news conference.
But she repeated her attack on federal regulators, saying electric rates are
rising in California only because the FERC has refused to cap runaway
wholesale electric prices.
Commissioner Richard Bilas later called a special federal rate "silly" and
"kindergartenish," and said the proposal was clearly intended "just to get
back at the federal government."
Any of the five appointed commissioners can offer an alternate version of the
rate design, as Lynch did. The alternates will be considered alongside the
proposal by Walwyn, the judge who presided over lengthy hearings on how the
new rates should be crafted.
She recommended increases that would fall slightly more softly on residential
customers -- averaging 11 percent for Edison and 15 percent for PG&E -- and
more heavily on large industrial users, averaging 52 percent for Edison and
55 percent for PG&E.
But within those averages could be much higher individual increases, and
advocates for everyone from farmers to manufacturers waited anxiously
throughout the day for detailed tables that would list rates for dozens of
customer categories.
"I have got my expert economist standing by to look at the numbers when they
come out," said Ron Liebert, associate counsel for the California Farm Bureau
Federation.
The release of the rate proposal has been delayed repeatedly as the PUC tried
to cram work that usually takes months into just a few weeks, and many of its
details remained obscure late Wednesday, dismaying those who are still
arguing for changes.
"We have to file comments on this by Friday. What they're doing is, they're
shutting down the comment period," said Jack Stewart, president of the
California Manufacturers & Technology Association.
He said it appears that some rates could nearly double, and "that's just a
death knell for many California manufacturers."
Lynch provided only sketchy summaries of her ideas, saying she wanted to
raise residential rates 16 percent for Edison and 17 percent for PG&E on
average, raise industrial rates 50 percent to 52 percent and cap agricultural
rate increases on a sliding scale from 23 percent to 30 percent, partly at
Gov. Gray Davis' urging.
She said that about half of households statewide would see no increase under
a state law that protects those who use less than 130 percent of a "baseline"
amount. However, PG&E has calculated that far more households -- 69 percent
-- use more than the baseline at some point during the year.
PG&E's baseline varies by region and season but generally runs between 300
and 400 kilowatt-hours, or about 50 percent to 60 percent of average
electricity use per household. It was created to give people access to a
minimal amount of power at a lower rate.
The heaviest household users still would see no increase on their first few
hundred kilowatt-hours, but after that prices would rise sharply, in tiers,
so that some households could see their overall bills rise 34 percent or
more.
Lynch and Walwyn also have proposed "bill limiters" so that businesses with
unusual usage patterns won't get hammered by unintended rate spikes.
The increases will not affect customers of the Sacramento Municipal Utility
District, which recently approved its own hikes, averaging 22 percent, and
other ratepayer-owned utilities.
The Bee's Carrie Peyton can be reached at (916) 321-1086 or
[email protected].
PG&E wants panel to get boot
By Claire Cooper
Bee Legal Affairs Writer
(Published May 10, 2001)
SAN FRANCISCO -- Pacific Gas and Electric Co. on Wednesday asked a judge to
disband an unprecedented committee of ratepayers appointed last week to
represent consumers in the utility's bankruptcy case, saying that some in the
group were politically biased.
The utility filed a motion arguing that U.S. Bankruptcy trustee Linda Ekstrom
Stanley exceeded her legal authority by designating a consumers committee
armed with broad powers to investigate and negotiate alongside the utility
and its creditors.
The utility denounced the committee as a collection of "special interest"
groups with "well-known political and policy agendas" and a "history of
aggressive lobbying and litigation."
The PG&E motion, which was set for a hearing May 18 before Bankruptcy Judge
Dennis Montali, warned that turning the consumer committee loose could
"substantially retard the progress of this case and seriously prejudice its
outcome."
On Friday, PG&E singled out Consumers Union and The Utility Reform Network as
"well-organized lobbyists and political operatives."
Consumers Union regional chief Harry Snyder, a committee member, said he
would have no comment. TURN's representative to the committee, Nettie Hoge,
did not respond to a request for comment.
In appointing the ratepayers committee last week, Stanley, who is
administering the bankruptcy proceedings, said she was bringing it into the
case because the state, which ordinarily would represent the public, has
chosen to stay out.
Stanley chose the nine committee members to represent a mix of energy
consumers -- households, businesses, farms and government. In addition to
Consumers Union and TURN, the groups include the California Farm Bureau, the
California School Boards Association and the California Manufacturers &
Technology Association.
If Montali upholds Stanley's action, PG&E must pay for the committee's
lawyers, accountants and other consultants to analyze data and present
arguments in the bankruptcy proceedings from the consumer's perspective.
"They (will) have all of the information that's going on," said Judy Beckner
Sloan, a bankruptcy expert at Southwestern Law School, who speculated that
PG&E was balking at the committee's potential power and its costs to the
bankruptcy estate.
"The creditors and PG&E are opposed to their presence because to the extent
the judge heeds the consumers' concerns, he's going to be less aggressive
about raising rates," said Jesse Fried, a law professor at the University of
California, Berkeley.
While Fried said Stanley's decision was defensible because the judge "is
supposed to take into account the wider interests of society," Los Angeles
bankruptcy lawyer Richard Levin sided with PG&E. Only the state should have
been allowed to represent consumers, Levin said, and its decision not to do
so should be final.
The Bee's Claire Cooper can be reached at (415) 551-7701 or
[email protected].
Major job losses predicted; governor presses generators
By Dale Kasler, Ed Fletcher and Emily Bazar
By Dale Kasler, Ed Fletcher and Emily Bazar
(Published May 10, 2001)
As a private consultant predicted the state will lose 135,000 jobs from a
summer of blackouts, Gov. Gray Davis on Wednesday pressed power generators to
forgo 30 percent of their California earnings to help pull the state out of
the energy crisis.
Summoning executives of the companies he has repeatedly accused of price
gouging, Davis said the generators probably would have to forgive a portion
of the debt they're owed by California's two destitute utilities to win the
Legislature's approval for his controversial plan to repay the debts and
rescue the utilities.
"I suggest that they should look to (accept) 70 percent of what they claim
they were owed," Davis said after a four-hour meeting in the Capitol. "I felt
the Legislature will insist on a reduction."
Although Davis said, "I believe they are willing to take some reduction," at
least one generator, Reliant Energy Inc., immediately dismissed the
governor's proposal.
The meeting capped a roller-coaster day in which anti-generator protesters
brought a pig to the Capitol and the state narrowly averted a third straight
day of rolling blackouts. But while enough megawatts were found to scrape by
for a day, the state is surely facing a summer of severe shortages.
A study, commissioned by some of the state's most influential business
lobbyists and partly funded by Intel Corp., predicted chronic blackouts will
mean significant economic harm to California.
The study by John Urbanchuck of New Jersey-based AUS Consultants said the
blackouts would erase 135,000 jobs and cause $26 billion in economic
devastation.
Several California economists said the prediction was overblown, but none
doubted the electricity crisis could significantly harm the state's business
climate.
"It really depends on how severe the blackouts are," said UCLA economist
Chris Thornberg. "If we have 30 straight days of blackouts in June ... you're
going to end up with a mess."
Everything else being equal, the loss of 135,000 jobs would raise
California's unemployment rate by 0.7 percent, to 5.4 percent, based on the
latest numbers from the Employment Development Department.
Ted Gibson, chief economist with the state Department of Finance, said AUS'
estimates seem high.
"It'd be hard for me to think those relatively limited, one-hour-at-a-time
(blackouts) would have such an impact," Gibson said.
As it is, the blackouts have struck some of California's most important
employers, such as Sun Microsystems Inc. and Advanced Micro Devices.
Tuesday's blackout hit Apple Computer Inc.'s lone U.S. factory, in Elk Grove.
Economic development agencies from other states have stepped up recruiting
efforts in California, hoping to capitalize on the state's misfortunes. A few
glass manufacturers have moved production, said Jack Stewart, president of
the California Manufacturers & Technology Association.
It could get worse. For example, a leading Silicon Valley electronics
manufacturer, Solectron Corp. of Milpitas, said it is seriously considering
pulling some of its operations out of California.
"The blackouts and the lack of reliable power are our biggest concerns," said
Solectron spokesman Bob Kula. "We have the ability to move (production)
quickly."
Solectron, whose factories were hit with blackouts in January and March,
employs 4,000 workers in Northern California.
A top state official said business leaders around the country look at the
electricity crisis as emblematic of a state that's becoming iffy as a place
to do business.
"The whole question of how did the state allow it to get this far -- I keep
hearing that from Wall Street, I keep hearing that from the business
community," said the official, who asked to remain anonymous. "The last year
has demonstrated that the risks of doing business in California are much
higher than anywhere else in the United States."
The state was spared a third day of blackouts Wednesday when cooler, windier
weather in the late afternoon produced a spurt of wind-generated electricity
and a much-needed drop in demand. Throw in an unexpected power purchase from
the Pacific Northwest, and the state's fragile power grid suddenly had 1,400
megawatts it wasn't expecting, more than enough to compensate for a breakdown
of a major Bay Area power plant in early afternoon.
Another boost: Pacific Gas and Electric Co. said all but a handful of its
alternative-energy suppliers have resumed production. These suppliers,
responsible for a fourth of the state's energy supply, have been closed for
weeks because of nonpayment by PG&E and Southern California Edison. The two
stricken utilities are paying them again.
But while blackouts were unlikely today, there were no guarantees.
"We're not swimming in megawatts," said spokeswoman Stephanie McCorkle of the
Independent System Operator, which runs the state's power grid.
Representatives from a dozen wholesale power generators -- 10 in person and
two by phone -- attended the Capitol summit.
Despite months of verbal potshots between Davis and the generators, the
meeting was described as cordial by John Stout, senior vice president of
Houston-based Reliant.
But Davis also said he told the executives that unless they accept a
reduction in payment for back debts, the Legislature is likely to reject his
plan to buy the utilities' transmission lines -- a key element of his plan to
pay back billions the utilities owe them.
If the plan goes through, the generators can get paid this year, Davis said.
If it's killed, they'll probably have to wait three or four years to get
their money in Bankruptcy Court.
So far only Edison has agreed to sell its lines to the state. Senate
President Pro Tem John Burton, D-San Francisco, said Wednesday that the
Edison deal will be rejected unless the generators forgive some debts.
"I'm going to insist that they take at least a 30 percent haircut on the
monies that they're owed," Burton said earlier.
The Bee's Dale Kasler can be reached at (916) 321-1066 or [email protected].
Bee Staff Writer Kevin Yamamura contributed to this report.
Bond-sale bill goes to Davis
(Published May 10, 2001)
The state Senate sent legislation to Gov. Gray Davis on Wednesday authorizing
the largest revenue bond sale in U.S. history over continued Republican
opposition.
The bill, SB 31x, would allow California to sell $13.4 billion in bonds,
starting in August, to repay the state for past and future power purchases.
Davis is expected to sign the bill today.
Because the bill failed to receive the two-thirds majority needed for an
urgency measure, however, the bonds can't be sold until 90 days after the end
of the Legislature's special session.
Lawmakers are expected to end the session Monday, and most of the 200 pending
energy bills already introduced will be reborn in a second energy session,
said Senate President Pro Tem John Burton, D-San Francisco.
SB 31x passed on a 23-12 vote, with most Democrats supporting the measure and
all Republicans opposing it. Sen. Joe Dunn, D-Garden Grove, was the only
Democrat to vote against it.
Republicans proposed that the state use the surplus to write off $6 billion
that California has spent on electricity since mid-January. But Democrats
said the state needs to replenish those funds to support other state programs
in education, transportation and health care.
Treasurer Phil Angelides had pursued a bridge loan of $4.13 billion to
bolster the state's budget and ensure that non-energy programs remain funded.
But when Assembly Republicans assailed the immediate bond sale, the
short-term loan was lost.
Zane Mann, editor of the California Municipal Bond Advisor, said the delay in
the bond sale "casts a cloud" over the project but won't kill it. It will
probably lead to a higher interest rate, which will add to the ratepayers'
costs, he said.
-- Kevin Yamamura and Dale Kasler
State revenue outlook shrinks
By John Hill
Bee Capitol Bureau
(Published May 10, 2001)
Legislative Analyst Elizabeth Hill dropped a budget bombshell Wednesday,
reporting to legislators that state revenues will be $3.4 billion lower than
Gov. Gray Davis predicted in his January budget proposal.
Instead of enjoying a $1.9 billion reserve, the Davis budget plan for the
fiscal year beginning July 1 would now leave the state $1.5 billion in the
hole, Hill wrote in a letter to legislators overseeing the budget.
Dwindling revenue from a faltering economy leaves Davis' plan in need of
major revisions. The new revenue estimates would require cuts in one-time
expenditures that Davis proposed for programs such as clean beaches and
fiscal relief for local governments. Cuts also may have to be made in new
spending contemplated for education, which got most of the new money in the
$104.7 billion January budget proposal.
"The number is so deep that it's going to be hard for us not to contemplate
cuts or make cuts," said Assemblyman Tony C?rdenas, D-Sylmar, vice chairman
of the Joint Legislative Budget Committee. "We don't know where those cuts
are going to come from."
Little will be immune, said Dan Howle, chief of staff for Sen. Steve Peace,
D-El Cajon, chairman of the Joint Legislative Budget Committee.
"It's going to include programs the governor is very supportive of and would
like to get done, but we're in a little bit of a cash crunch here, and you've
got to do what you've got to do," he said.
"If anything's got a protective fence around it, it's education. But I still
think it'll have to take a share of the cuts."
These grim budget figures don't take into account possible hits on the budget
caused by the state's breathtaking expenditures on electricity.
Those effects could be negligible if the state is able to sell bonds to pay
for power and replenish the treasury. But considering recent events in the
volatile energy crisis, no assumption is safe.
The budget crunch will likely highlight conflicting spending priorities and
could lead to more polarization between Democrats and Republicans who have
been squabbling over the energy crisis.
"A third of the Assembly has never done a budget," Howle said. "Another third
has never dealt with anything other than huge surpluses. Now you're saying
we've got to go in and cut. This could be a long, hot summer."
The new revenue projections are a dramatic illustration of the state's
faltering economy. Revenues for the fiscal year that starts July 1 are now
expected to be $4.8 billion less than anticipated in January, Hill wrote.
That includes a decrease of $3.9 billion in income tax, $500 million in sales
tax and $600 million in bank and corporation taxes, offset by some moderate
increases in insurance and estate taxes, said Brad Williams, chief economist
in the non-partisan Legislative Analyst's Office.
"It's deterioration in the stock market and implications for capital gains
and stock options," Williams said, "and also the weakening outlook for the
economy as a whole."
The $4.8 billion blow is softened somewhat by unexpectedly strong revenues
from last year's tax returns, which helped boost revenues $1.4 billion higher
than had been anticipated.
The net effect is $3.4 billion less for the fiscal year that begins July 1.
If the Democratic governor's budget were approved as is, the deficit would
reach almost $6 billion in the fiscal year that begins July 1, 2002, Hill
wrote.
The governor is expected to release his revised budget Monday. The state
Department of Finance said Wednesday that it wouldn't comment on the new
revenue estimates until then.
One obvious target for budget cutters is one-time expenditures in the January
proposal. This includes money for local governments, state building projects,
housing initiatives, replacing diesel engines that contribute to air
pollution, cleaning up beaches, law enforcement technology grants, flood
control, parks along rivers and more.
Even if the state axed $2.5 billion for one-time expenditures that Davis
proposed, it would still have to cut an additional $1.7 billion proposed for
ongoing programs.
Davis' budget -- which projected an $8 billion surplus -- includes at least
$1.9 billion more for education than required under formulas approved by
voters in Proposition 98. But considering Davis' commitment to education,
most believe it's unlikely the governor would balance the budget by
throttling back to the minimum funding level, which would require cuts to
existing education programs.
C?rdenas said education, health care and transportation should be protected
from cuts.
Assembly Republicans agree about education, but have different ideas about
the rest.
On Wednesday, the Republicans released their plan for the revised budget. It
includes protecting schools and law enforcement, creating a $4 billion
reserve for future electricity purchases, and striking a proposed 1/4-cent
sales tax increase.
The sales tax, which went into effect in the early 1990s, was removed this
year, but Davis has proposed restoring it in 2002.
"All this does is put a new burden on the backs of Californians" already
coping with higher energy costs, said Assemblyman George Runner, R-Lancaster,
a member of the Assembly Budget Committee.
Republicans say an electricity reserve could avoid the need to do another
bond sale for power purchases next year.
"This is the time to make sure we are putting money aside and that we're not
going to have to turn back to taxpayers or ratepayers and put an additional
burden on them," Runner said.
The Bee's John Hill can be reached at (916) 326-5543 or [email protected].
No blackouts despite dip in supplies
Stage 2 alert, power plant breakdown add to concerns
By Jeff McDonald
UNION-TRIBUNE STAFF WRITER
May 10, 2001
In the nip-and-tuck world of meeting California's energy needs, a small
victory was notched yesterday in Folsom, where managers of the state power
grid avoided blackout orders for the first time since the weekend.
But tensions nonetheless ran high among power industry officials, and
business leaders in San Diego County are growing increasingly alarmed at the
nagging energy crisis.
The number of available megawatts fluctuated throughout the day yesterday and
a major power plant broke down, but engineers at the Independent System
Operator maintained service across the state.
Persistent shortages combined with unusually high temperatures prompted power
alerts as early as 10:15 a.m., when grid officials warned that supplies had
dipped within 7 percent of reserves.
With more than 12,000 megawatts of power unavailable from idled plants,
system operators issued a Stage 2 warning about 11:45 a.m. and asked large
users to cut back consumption through the afternoon.
Two hours later, a boiler tube leak knocked out a 750-megawatt power plant in
the Bay Area. Repairs will probably take several days.
"It wrecked my day," said Jim McIntosh, the Independent System Operator
director of grid operations. "It just changed the whole perspective of what
was going on."
The loss of the 750 megawatts deepened concerns in Folsom, where ISO
engineers measured a peak afternoon demand that barely trailed supplies of
almost 34,000 megawatts.
As late as 3 p.m., grid officials expected to be forced into cutting service
to hundreds of thousands of homes and businesses. Cooling temperatures and
conservation efforts helped kill the last threat, McIntosh said.
More blackouts could be ordered today, however, and tomorrow may be just as
problematic.
"The next couple of days will certainly be impacted by the loss of that
unit," McIntosh said.
The latest breakdown added to some already high drama at utility companies,
where officials braced through the day for orders to cut power to hundreds of
thousands of customers.
Blackout orders never came. But executives at San Diego Gas and Electric Co.
spent the day on heightened alert, calling critical-need residents and
businesses and informing them of potential service interruptions.
"This has become relatively commonplace," SDG&E spokesman Douglas Kline said.
"We handle it as a matter in the course of business now, unfortunately. We've
been on high alert all day."
Service was cut to more than 23,000 customers in several San Diego-area
neighborhoods Monday and Tuesday afternoons. More than 500,000 homes and
businesses across the state also lost power.
In a power interruption unrelated to the power problems across the state, a
number of major businesses in downtown San Diego were cut off unexpectedly in
midafternoon.
Customers between F Street and Harbor Drive lost power about 3:15 p.m. when
something went wrong with an underground cable that serves, among others, the
Marriott Marina hotel, SDG&E said.
Service was restored within two hours, but not before convention meeting
rooms went dark and hotel restaurants closed.
The heat wave that has hung across California the past three days is expected
to begin cooling today and tomorrow, the National Weather Service said. That
should reduce demand for air conditioning, one of the biggest power draws in
the state.
However, the constant uncertainty in the electricity industry is taking its
toll on local businesses, which not only are seeing huge run-ups in utility
costs but are girding for potential losses that even a few minutes of
interruptions can cause.
"From a business standpoint, it's not 15 minutes of downtime for many of our
companies," said Julie Meier Wright, president of the San Diego Regional
Economic Development Corp. "For many of them, it means the loss of hours,
days, weeks and even longer of work."
Biggest users face huge rate hikes under PUC plan
By Karen Gaudette
ASSOCIATED PRESS
May 9, 2001
SAN FRANCISCO ) Customers of California's two largest utilities who use the
most electricity would pay much more to run canneries, tumble laundry and
conduct other tasks under a tiered rate plan implementing record hikes
approved in March.
The rate plan proposed Wednesday by Loretta Lynch, president of the state
Public Utilities Commission, suggests how the rate hikes should be allocated
among residential, industrial, commercial and agricultural customers.
Residential customers of Pacific Gas and Electric Co. and Southern California
Edison Co. who use the most electricity would face average rate hikes of 35
percent to 40 percent.
And industrial users, such as factories and food processors, could face hikes
of 50 percent or more as the state desperately tries to start recouping the
$5.2 billion it already has paid to buy power for customers of those
financially ailing utilities.
Still, under Lynch's plan, as many as half of the 9 million customers of PG&E
and SoCal Edison would not see their bills rise at all.
Lynch's plan is the culmination of weeks of discussion among customers, state
officials, consumer activists and the utilities about how best to allocate
the record rate hikes approved in late March by the PUC.
Those rate hikes will affect all classes of customers, from small families to
the huge Silicon Valley facilities powering the Internet, but not all will
face the same magnitude of rate increases.
And, even within those classes, customers will pay more depending on when
they use the electricity. Those who use power during times of highest demand
) generally, during daylight hours ) will pay the most.
Lynch said her plan "recognizes that energy is expensive at every hour of
every day by every customer," but penalizes those who do not cut back on
energy use or try to shift to different times of the day.
Under Lynch's proposal, agricultural customers could face rate hikes ranging
from 23-30 percent, with increases capped at 30 percent. Industrial users
face average increases of 50 percent or more, and commercial users average 34
percent to 45 percent hikes.
Her proposal, Lynch said, designs rates to encourage conservation and
provides $5 billion over the next year to help pay the state Department of
Water Resources for the billions it has spent providing electricity for
customers of PG&E and Edison.
Lynch left the door open for future rate hikes, noting that the state
provides its electricity-buying expenses to the commission only on a monthly
basis, while wholesale electricity prices continue to soar.
Lynch's proposal, and a largely similar proposal from PUC administrative law
judge Christine Walwyn, will be reviewed in public hearings throughout the
state the rest of this week.
Rate Hikes Up to 60% Proposed by PUC Chief
Power: Lynch says about half the residential customers of Edison, PG&E would
escape increases. Her plan draws fire from all sides.
By TIM REITERMAN and NANCY RIVERA BROOKS, Times Staff Writers
?????SAN FRANCISCO--About 4 million California residential electricity
customers will face increases in their monthly bills of up to about 60% under
a proposal unveiled Wednesday by the state's chief utility regulator.
Interest groups on all sides promptly condemned the plan as too hard on
either consumers or businesses.
?????The proposal by California Public Utilities Commission President Loretta
Lynch would increase the bills of roughly half of Southern California
Edison's residential customers, who consume medium to heavy amounts, by $8 to
$93 a month. Pacific Gas & Electric Co. customers would be hit with hikes of
$6 to $87 a month.
Elisabeth Charion is among about 70 people testifying at a PUC hearing
Wednesday in Fullerton, most venting their anger at elected officials and
utility companies, whom they blame for the crisis.
IRFAN KHAN / Los Angeles Times
?????About half of the residential customers of the state's two biggest
public utilities would see no increase under the proposal if they continued
to consume energy at their current pace.
?????Lynch said she could not guarantee that more rate increases would not be
necessary. "Even these astronomical average rates may prove inadequate," she
said, noting that wholesale electricity prices are still high and
unpredictable.
?????The rate hike, Lynch said at a news conference, is necessary because
"federal regulators have failed to follow federal laws to ensure just and
reasonable prices."
?????The deepening energy crisis compelled Lynch to release her proposal
after public hearings on the rate increase already had begun. Lynch said that
she wished her proposal had been ready sooner, but that at least some of the
remaining public hearings will have the benefit of reviewing it.
?????PUC passage of the essential elements of Lynch's plan seems likely.
?????Along with two of her colleagues on the five-member commission, Lynch
was appointed by Gov. Gray Davis, and they often vote as a bloc. Lynch said,
however, that testimony later this week from utilities, the public and other
interested parties could prompt modifications.
?????Structuring the $5-billion rate increase is an important but politically
sensitive step in California's attempt to restore stability to the delivery
of power to 9 million customers of two financially troubled utilities while
protecting the state budget.
?????The PUC has tried to design rates that would encourage conservation
without damaging business. Competing interest groups, ranging from consumer
advocates to large manufacturers, have been jockeying for advantage for weeks.
?????The PUC approved a rate increase of 3 cents per kilowatt-hour March 27
to help pay the state's mounting power tab, which now exceeds $5 billion.
This week, the commission is conducting statewide hearings on how the pain
should be shared among millions of residents and businesses. On Monday the
panel is set to vote on Lynch's plan and a similar one by a PUC
administrative law judge.
?????Neither proposal appeared to please anyone.
?????"The PUC says everyone should share the pain, but we think the fair
share of the pain for residential consumers should be zero," said Mindy
Spatt, spokeswoman for the Utility Reform Network, a San Francisco consumer
group. "It should be paid by commercial and industrial customers who wanted
and still want deregulation."
?????Consumer activist Harvey Rosenfield said regulators should go after
power generators and their hefty profits rather than ratepayers.
?????"Rate increases are not the answer, and this is not going to be the end
of them," said Rosenfield, president of the Foundation for Taxpayer and
Consumer Rights in Santa Monica. "This is like organized crime: The more you
give them, the more they want."
?????Commercial and industrial customers would see increases of up to 50%,
and agricultural interests would face increases of 23% to 30% under Lynch's
proposal.
?????Business interests contend that the rate hikes hit them much harder than
residential users.
?????Calling the proposal "a death knell for the California economy," Jack M.
Stewart of the California Manufacturers and Technology Assn. estimated that
industrial customers would see their power rates increase an average of 53%.
And the pain of the rate hikes will be compounded by blackouts this summer,
which the group contends will cost California businesses $21.8 billion in
lost productivity.
?????"For most large manufacturers, energy is a large piece of their
operating costs," Stewart said. "If you add 53% to that, it's going to
severely hamper their ability to do business."
?????Unlike residential customers, the business customers are not grouped
into tiers based on their amount of usage. Lynch said there was insufficient
time to establish a tiering system for nonresidential customers by June 1,
when the rate hikes will start showing up on bills.
?????An earlier proposal by Lynch had attempted to narrow the gap between
residential rates and the lower rates paid by nonresidential customers. But
the commission president said that goal could not be immediately achieved
without seriously damaging the state's economy.
?????To protect the largest users from gigantic rate increases, Lynch's
proposal caps the maximum bill increase at 300% for most customers and 250%
for agricultural customers.
?????"While we understand bill limiters may have some troubling conservation
impacts, at some point, price signals are unbearable for customers. Bill
limiters will protect customers from unanticipated extraordinary bill
impacts," Lynch wrote.
?????In recent weeks, the commission has received about 20 plans for
structuring the rate increase, including one from Davis, who had proposed a
slightly smaller overall rate increase. Lynch said her plan incorporates a
number of features of the governor's plan, including a tiered structure that
would punish heavy users and reward those who conserve.
?????Under state legislation, there is no rate increase for consumption up to
130% of baseline, the amount deemed the minimum needed by a customer in a
given area and noted on ratepayer bills. Also exempted are low-income
customers who already receive discounted electricity rates.
?????Edison and PG&E said they could not assess how the PUC proposals would
affect their customers because the commission had not provided details to the
utilities as of late Wednesday.
?????But PG&E has disputed the commission's claim that half of customers
would not be affected by the increase, noting that only 32% of PG&E customers
never exceeded 130% of baseline usage in the last year.
?????Industrial and commercial customers complained that the plan should not
exempt such a large group of residential customers, in any event. A rate
increase for these users--based on the PUC's estimate that the group will
constitute about half of residential customers--could generate an extra $1
billion.
?????If the PUC insists on exempting so many, the $1-billion shortfall should
be covered solely by other residential users, businesses say.
?????Under Lynch's plan the burden of paying that amount would be split
equally among commercial, industrial and nonexempt residential customers.
?????If covering the shortfall were not shared by the three groups, Lynch
said, some residential customers would suffer a 100% increase in their bills.
?????The proposal calls for a pilot program, including one that would let
federal agencies based in California "experiment with their own market rate
policies."
?????Lynch challenged federal agencies to try to live with "real time," or
hourly, prices in the volatile wholesale marketplace--a slap at officials of
the Federal Energy Regulatory Commission who favor a free wholesale market
over price caps. Use of real-time pricing requires installing a special meter.
?????"'It would be great if the federal users respond to price signals enough
that prices come down," Lynch said, adding that she was skeptical that would
happen in today's dysfunctional market.
?????A FERC spokeswoman declined to comment on Lynch's proposal.
?????During the third day of PUC hearings, about 200 people gathered at
Fullerton College. Seventy people testified, most venting their anger at
elected officials and utility companies, whom they blame for the state's
flawed deregulation plan.
?????"I am opposed to any rate increase for residences and small business,"
testified Ruth Shapin, a Santa Ana attorney. "This crisis was created by
politicians. PG&E and SCE have transferred billions of dollars to their
parent companies. Let them bail themselves out, not the ratepayers."
?????Others said the baselines might be unfair because the commission had not
taken into consideration home size, the number of occupants and the location.
?????"It's going to be hard for many people to stay below the 130% baseline,"
said Sylvia Hartman of Lakewood. "Some customers could easily go 400% over
the baseline."
---
?????Reiterman reported from San Francisco, Rivera Brooks from Los Angeles.
Times staff writer Dan Weikel in Fullerton contributed to this story.
Copyright 2001 Los Angeles Times
Bush Energy Stance Begins to Worry Some in GOP
By GREG MILLER and RICHARD SIMON, Times Staff Writers
?????WASHINGTON--As power shortages and price spikes spread beyond
California, congressional Republicans are beginning to worry that the Bush
administration's reluctance to offer much immediate relief could hurt the
party in the 2002 elections.
?????A national energy plan to be unveiled by the White House next week will
focus on long-term strategies. But with California and other states bracing
for a summer of electricity turmoil and gasoline prices surging across the
country, some GOP lawmakers are pressing for short-term solutions.
U.S. Rep. Mary Bono, left, and Gov. Gray Davis discuss meeting with
executives of power-generating companies. Bono plans to seek $100 million to
help poor people pay energy bills.
AP
?????"The White House has been taking a look at the big picture," said a GOP
leadership aide in the House. "But they're going to be around in four years.
We might not have members around in two years if we don't show we care."
?????That sentiment is being voiced by a rising number of GOP lawmakers.
"We're in a crisis situation, which is only going to get worse if we don't
act very aggressively," Rep. Elton Gallegly (R-Simi Valley) said Wednesday.
Gallegly is one of four congressional Republicans from California to break
with the administration by supporting temporary price controls on wholesale
electricity.
?????The rising anxiety, which has begun spreading beyond the California
delegation, underscores how much has changed since the state declared its
first Stage 3 power emergency in December. At that time, Congress' response
was largely: That's Gov. Gray Davis' problem.
?????Not anymore.
?????Thirty-nine Stage 3 alerts later, a House committee today will take up a
GOP-drafted emergency bill that would, among other things, allow Davis to
temporarily waive certain emission standards for power plants during an
emergency and provide federal aid to relieve a notorious bottleneck in the
California power grid.
?????But some GOP lawmakers say the legislation doesn't go far enough, and
plan to offer amendments containing their own ideas. Rep. Mary Bono (R-Palm
Springs) plans to push for $100 million in energy assistance to low-income
households and for a directive to federal facilities in the West to cut
energy use by 20%.
?????"House leaders recognize that they could lose the House in California if
there's not an action plan that members can campaign on," said Scott Reed, a
GOP strategist.
?????As lawmakers search for ways to provide immediate relief, the White
House continues to cite California's troubles as evidence of the need to
upgrade an aging, overburdened electricity transmission system.
?????Responding to reports that the administration would propose legislation
to give the federal government eminent domain authority in siting power
lines, White House press secretary Ari Fleischer said Bush wants to ensure
that the distribution infrastructure can move electricity from regions with
surpluses to regions that need more power.
?????"That's one of the reasons that California is going through the
difficulties it's going through," Fleischer said. "There is energy available
in other parts of the country, but it can't be shipped to California as
easily as you would hope, because of infrastructure problems."
?????Fleischer took exception to a front-page story in The Times reporting
that Bush, in a speech delivered Tuesday, "offered no hint of what his
administration might do" to help California avert a possible economic
downturn caused by power blackouts.
?????Though the president did not specifically mention possible actions in
the speech, Fleischer said Bush last week "announced a series of steps,
including conservation," to help California get through an energy crisis this
summer.
?????He said that the Pentagon is reducing its energy needs within California
by 10% and that all other federal agencies, at Bush's direction, are
reviewing their energy consumption patterns.
?????Environmentalists already have begun blasting the administration's
energy plan--even before its details are made public--for what they
characterize as a failure to emphasize energy efficiency and investments in
renewable fuels.
?????Activists Say Crisis Isn't Real
?????At a Wednesday news briefing, a coalition of environmental advocates
disagreed with the administration's assertion that the country is
experiencing an energy "crisis," and accused it of crafting a plan designed
to boost the profits of key campaign contributors.
?????"We cannot drill our way out of this situation," said Dan Becker of the
Sierra Club. He and others argued that conserving fuel--with cars that use
less gasoline and appliances that use less electricity, for example--is the
best way to avoid energy shortages in the short term.
?????So far, it is not clear whether the energy crisis will work to either
party's advantage. Many on Capitol Hill are bracing for an election year that
could be brutal for incumbents of both parties if voters who endure high
energy bills this summer vent their frustration in the voting booth next year.
?????Some House Republicans acknowledged that they have been pushing the
White House to appear more engaged in finding near-term solutions.
?????When House Republicans met with Cheney last week, "they urged him and
all the administration to at least make it clear that a lot of effort is
going into finding a way to solve the problem," said Jim Specht, a spokesman
for Rep. Jerry Lewis (R-Redlands), leader of the California GOP delegation.
?????Though some Republicans have offered ideas to address the immediate
problem, it is not clear whether any will receive congressional approval.
?????Indeed, the emergency assistance bill being taken up today by the House
energy subcommittee faces trouble, although it was drafted by the panel's
chairman, Rep. Joe Barton (R-Texas).
?????Barton stripped out a number of provisions opposed by environmentalists.
But Democrats plan to seek a vote on capping wholesale electricity prices, a
proposal most Republicans oppose. Democrats also plan to introduce an
amendment to target natural gas prices.
?????House Minority Leader Richard Gephardt (D-Mo.) said the bill "fails
miserably" to address California's problems. "During the campaign, President
Bush promised a sensible energy policy," Gephardt said. "In recent weeks,
however, the president has responded to the gathering crisis by throwing up
his hands and saying there's nothing we can do, there's no way to give people
immediate relief from blackouts and sky-high increases of price of gasoline
at the pump."
?????Lawmakers of both parties acknowledge that they are hearing a rising
chorus of constituent complaints about the energy price spikes and supply
shortages.
?????Rep. Chris Cox (R-Newport Beach) was caught in a blackout during a tour
of a computer chip factory in his district. "They said it cost them $1
million if the power goes off even for five minutes," said Cox, who
nonetheless opposes price controls.
?????Cox said he is worried about how the California electricity crisis might
affect the national economy. He said that when he asks business owners about
expanding in California, "they just look at you like you're nuts. They don't
consider California an option because of this uncertainty."
?????"People come up to you and want you to help solve the problem," said
Rep. George Radanovich (R-Mariposa).
?????He has explained that there is little the federal government can do in
the short term.
?????"Californians want somebody to do something," said John J. Pitney Jr.,
associate professor of government at Claremont McKenna College. "When people
are in a mood like that, politicians get nervous thinking that they're the
ones who might get blamed."
?????Said Reed, the GOP strategist: "Every incumbent in California is
vulnerable in the next election, in both parties. This is an issue that is
not ideological. It's about action and solving a short-term problem.
"Politics have taken over this issue, like it or not," he said. "They may
have been raging in California for the last three or four months. It's now a
national political issue."
---
?????Times staff writers James Gerstenzang, Edwin Chen, Elizabeth Shogren and
Ricardo Alonso-Zaldivar contributed to this story.
Copyright 2001 Los Angeles Times
In Office Buildings, the Lights Are On, But Nobody's Home
Energy: Analysts say metering individual tenants could encourage
conservation.
By JERRY HIRSCH, Times Staff Writer
?????Despite power outages and soaring energy prices, workers stream out of
California's downtown and suburban offices each evening leaving lights
blazing and computers humming. And there has been scant incentive to
conserve, since commercial building leases typically include the cost of
energy.
?????Energy experts and other analysts say metering of individual office
tenants would encourage conservation by pushing companies to shut off lights,
computer monitors, desk fans and other electrical devices at night, but state
regulations and utility policies are in the way.
?????That conflict between policy and conservation efforts has drawn the
attention of state Sen. Debra Bowen (D-Marina del Rey), who chairs the Senate
Energy, Utilities and Communications Committee. On Tuesday, Bowen asked
California Public Utilities Chairwoman Loretta Lynch to review what Bowen
called "archaic" regulations governing how electricity meters are used in
office buildings. Bowen said she also plans to take up the issue in her
committee.
?????At issue is Rule 18, a regulation established by the commission two
decades ago that prohibits landlords from using submeters to assess energy
charges to tenants.
?????"It is quite old and dates back to a different era of electricity
distribution in California," said Bowen, who was urged to take action by the
Building Owners and Managers Assn. "I asked Loretta Lynch to open a
proceeding to revise or eliminate that ban."
?????Lynch did not return calls for comment on the state's metering policies,
but PUC regulatory analyst William Gaffney said more metering "would be a
boon to energy conservation" because "you could see what you are using."
?????"Direct metering would ultimately foster greater energy savings . . .
more permanent savings, because it would encourage capital investments in
more efficient equipment, windows, etc., etc.," said Evan Mills, a scientist
in the energy analysis department of the Lawrence Berkeley National
Laboratory in Berkeley.
?????Usually, the only tenants in office buildings with utility meters are
retail and restaurant businesses, according to commercial real estate
experts. Most tenants in California office towers sign what are called "gross
leases" that include power. When electricity usage or rates go up
unexpectedly, landlords can charge monthly or annual "escalation fees" to
cover the extra cost. The fees typically are apportioned by the percentage of
the building a tenant occupies.
?????This method of billing is counterproductive to energy savings, said
Willet Kempton, senior policy scientist at the University of Delaware's
Center for Energy and Environmental Policy. Energy hogs are subsidized by
other tenants. Conversely, savings through conservation are only fractionally
shared.
?????Two key obstacles block metering of individual tenants in a building.
?????One is economics--high-rise buildings get a far better rate with one
utility meter than if each floor is metered.
?????"We can sell a lot of energy on just one bill," said Randy Howard,
manager of commercial services at the Los Angeles Department of Water and
Power. "If we had 200 meters there and had to do the billing and meter
reading for each of them, each tenant would pay a higher rate."
?????Moreover, utilities aren't anxious to send meter readers to every floor
of a building, going through private offices to find the meters. One
alternative--locating all the meters in a central area where the main
electrical line enters the building--would require massive rewiring of
existing office towers that could cost several hundred thousand dollars or
more, depending on the size of the building, said Ali Sherafat, senior vice
president of the Los Angeles office of Syska & Hennessy, a consulting
engineering firm.
?????A 1995 ruling by the PUC required that individual tenants in office
buildings be placed on meters operated by a public utility (as opposed to
landlord-managed submeters), but relatively few have been installed because
of exemptions.
?????For example, Southern California Edison Co. officials typically meet
with developers at the start of a building project to determine how many
meters it might require, said Matt Deatherage, a planning support manager for
the utility. But because developers build office space so that its
configuration can change easily as tenants shift, the estimate is often
wrong. A building designed with three meters for three tenants might find
itself with six tenants or more by the time it opens.
?????"We don't require them to go back and rewire the building if it turns
out to be wrong, that would be too expensive," Deatherage said.
?????The second obstacle is Rule 18, the 1981 ban on submetering originally
intended to protect utility monopolies and to prevent landlords from getting
electricity at a discount price and selling it at a markup to tenants.
?????"When you resell electricity like that, you function as a utility and
that's not allowed," said Deatherage.
?????Nonetheless, Bowen believes that deregulation may have superseded those
issues and that current policy should emphasize conservation.
?????Although the leasing model used in California is common, it's not
universal, said Peter L. DiCapua, energy chairman of the Building Owners and
Managers Assn. International.
?????Many New York tenants have individual meters. Others are on landlord
submeters, a system that allows them to tap into the lower, high-volume rates
paid by the building's operator but still pay for actual, rather than
estimated, energy use.
?????Landlords would welcome a changed regulation to allow submetering for
several reasons. There are the conservation benefits, said Dan Emmett, chief
executive of Douglas Emmett & Co., one of the largest building owners and
managers in Los Angeles County. It also would reduce some of the inevitable
arguments with tenants who claim they pay more than their fair share for
services at a building.
?????"I think submetering could be practical," Emmett said. "It is not that
complicated and is fairly inexpensive."
?????Sherafat said it would cost about $2,000 per tenant for the submeter and
the necessary software. Submeters could be installed at the electrical panel
level without expensive rewiring for utility meters, he said. Better yet, the
software allows data to be collected at a central point, eliminating the need
for meter readers. Such a system also could allow big buildings to use one
master meter to get the best rate .
?????Though submetering would foster conservation, it still is not a panacea,
said Kempton of the University of Delaware. When it comes to energy
conservation, changing the behavior of businesses and workers is notoriously
tricky.
?????"Attorneys literally can't be bothered with the nuances of energy," said
DiCapua, an executive at Atco Properties & Management in New York. "They are
focused on things other than if the air conditioning was left on all night.
?????That is typical of professional services firms, because energy is just a
small fraction of their expenses, Kempton said.
?????And individual metering sounds great in theory, Kempton added, but it is
useless if the bill goes to a home office elsewhere or if the on-site manager
of the firm never sees it.
?????In any push to change the rules, however, people should remember that
the current system was developed for sound reasons, often based on reducing
the expense of constructing buildings and finding tenants the lowest prices
for energy, Howard said.
?????"Right now we are in a conservation mode, so everybody is talking about
this," he said. "But that hasn't always been the case, so a single meter for
a big building made sense."
Copyright 2001 Los Angeles Times
Thursday, May 10, 2001
Power Shifts to Congress
?????Wholesale electricity prices soared with the temperature this week,
jumping to eight times the peak of only three weeks ago. No one knows how
high the price may go when high summer hits. Which makes it all the more
intriguing that one of the big power-generating companies is now calling for
temporary price caps, which the Bush administration stubbornly opposes.
?????Authority over wholesale power prices rests with the Federal Energy
Regulatory Commission, which is charged by Congress with maintaining "just
and reasonable" rates. But FERC refuses to impose what California desperately
needs, a broad temporary price cap that allows companies to recover their
costs plus a reasonable profit. The state's last hope for rate caps now rests
with Congress.
?????Sens. Dianne Feinstein (D-Calif.) and Gordon Smith (R-Ore.) are
sponsoring legislation that would require FERC to establish temporary maximum
rates. Rep. Henry Waxman (D-L.A.) is scheduled to propose amendments to a
House bill today to do the same. The support of three Republican House
members from California, who are on the energy and air quality subcommittee,
is crucial. They are Christopher Cox of Newport Beach, Mary Bono of Palm
Springs and George Radanovich of Mariposa. The Waxman measure serves the best
interests of California. Concern about losing seats in Congress may also help
the GOP members make the right choice.
?????It was Feinstein who got a letter from Keith E. Bailey, chairman of
Williams Cos., an energy producer, in support of temporary price controls.
Perhaps some generators are tired of being labeled gougers, pirates and
bloodsuckers, and they will settle for a reasonable profit through the rest
of this crisis. But price caps would have to apply to all the producers.
Congress must act, starting today with the subcommittee vote on the Waxman
measure. Copyright 2001 Los Angeles Times
Proud state forced to knees in power hunt
Robert Salladay, Chronicle Sacramento Bureau
Thursday, May 10, 2001
,2001 San Francisco Chronicle
URL: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/05/10/MN40227.DTL
California has turned into the trailer park next door, the cash-only,
deadbeat neighbor forced to beg for enough power to keep the swamp cooler
running.
Yesterday in Folsom, home of the state's energy managers, was another study
in high-tech, air-conditioned humiliation -- punctuated by a frantic scraping
and bowing for energy across the West.
Poor people with "secured" credit cards can relate to the scene at the
California Independent System Operator. This week began with Canada's BC
Hydro threatening to shut off power again until the state actually wired cash
to its bank account.
"We got the money," an ISO engineer stood up and told another employee at the
agency's semi-secret Folsom headquarters yesterday. "Yeah, we're good for
another $14 million. Burn it up, huh, Lloyd?"
Lloyd started burning it up, thanks to an OK from the Department of Water
Resources and to several million California taxpayers' footing the bill.
California narrowly missed a third day in a row of blackouts yesterday. The
situation was tight when a power plant in Pittsburg shut down because its
boiler was leaking, but cooler weather and increased supply from other
generators helped keep the lights on.
All week at the ISO, engineers have been fretting about facilities and
finances.
BC Hydro shut off 2,000 megawatts of power to the state Monday while it
waited for a check from the water agency. The state has a line of credit with
BC Hydro, but California is buying so much at such high prices that it was
reaching the limit.
The company already is owed about $307 million from the state's insolvent
utilities, so it is impatient.
"They wanted to make sure we were good for it before we could continue," said
Oscar Hidalgo, a spokesman for the water agency, which is paying the bills.
The power cutoff sent the ISO into a panic, since BC Hydro was providing
enough to power an estimated 2 million homes. Two hours later, the state
marched down to the bank and wired the money. Power was restored, and an
agreement was reached yesterday for daily payments.
The engineers in shirtsleeves at the ISO aren't used to this kind of
treatment. Since the energy crisis drained the bank accounts of the
utilities, it's been months of constant struggle to get power generators to
fork over electrons.
"We have to go into higher begging mode for generators out of state," said
Jim McIntosh, director of grid operations for the ISO. "It scares the hell
out of these guys. They've never been put in that position. . . . From the
electricity standpoint, we're operating like the Third World."
The ISO has no control over energy prices or even how the bills are paid. The
bills are the job of the water agency, which has been spending about $50
million a day since mid-January.
Not only have a near-record number of power plants been shut down for repairs
this month, the hot weather is breaking records and causing energy use to
spike. The state would probably be near blackouts even without the shaky
financial situation.
But the final insult is that some of the bills are getting paid late, in part
because power generators are charging unprecedented rates on the daily energy
market.
That causes the people who work at power companies to get snippy sometimes
and threaten to withhold power. That also leads to the same things that poor
people face every day: higher prices, bad service and frustration.
"We pay more for gasoline. We pay more for natural gas. We pay more for
electricity than anywhere else in the country," said Larry Bellnap, shift
manager at the ISO, a two-decade veteran in the power business. "I can't
think of a reason except we're California, and they are taking advantage of
us."
Here's a conversation recorded a few months ago between an ISO engineer and a
generating plant in El Segundo. At the time, the ISO needed the plant to go
on line immediately to avoid blackouts.
"You need to get somebody that has the authority to tell me how I'm going to
get paid," the plant manager demands on the phone.
"I have the authority to order these plants on," the ISO manager says, and
then gets this back a few minutes later:
"I still need clarification on how you're going to pay me if I get these
things on."
"OK. I can't give you that right now. That will have to wait until tomorrow.
"
"No, I need that now," the plant manager says.
"That's unacceptable."
The conversation is contained in court records compiled when several out-of-
state generators threatened to cut off power, despite their contracts, and
the ISO sued. The state lost its case essentially, but federal regulators
backed them up last week in a ruling.
McIntosh said he'd never in his 31 years working in the power industry had to
get a lawyer on the phone to force a power generator to start up a plant to
provide more power. But now they have two available if needed to remind
generators of their commitment.
GALLING POSITION
The problem is especially irritating because power generators are charging
the highest prices ever seen for power.
McIntosh and others said the situation was much smoother now that California
was the major creditor and was pumping billions of dollars into buying power.
Most of the generators are confident enough they will get paid.
Hidalgo said the BC Hydro situation this week was isolated so far, but he
offered one solution for the future:
"Maybe they shouldn't charge so much."
E-mail Robert Salladay at [email protected].
,2001 San Francisco Chronicle ? Page?A - 1
Power bills set to skyrocket for heavy users
Graduated rate increase would take effect in June
David Lazarus, Chronicle Staff Writer
Thursday, May 10, 2001
,2001 San Francisco Chronicle
URL: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/05/10/MN176943.DTL
As state regulators outlined plans to raise residential electricity bills by
as much as 40 percent, the head of the Public Utilities Commission warned
yesterday that power rates could soar even higher.
The PUC, which adopted an increase in March, is scheduled to approve details
of the new rates in San Francisco on Monday. Consumers will see the higher
rates in their June utility bills.
State regulators say nearly half of all consumers will see no change in their
power bills. The remainder will experience rate increases ranging from 3
percent to more than 50 percent, depending on the type of customer and the
amount of power used.
The increases would be added to an average 10 percent increase adopted in
January.
PUC President Loretta Lynch suggested that rates could rise yet again if
wholesale electricity prices continue to surge this summer.
"If the sellers decide to turn up the heat and raise prices, we'll have to
look again at the numbers," she said.
INCREASE WILL CONTRIBUTE LITTLE
The proposed rate increase would bring in about $5 billion annually -- a
fraction of the estimated $65 billion California will spend this year
purchasing power on behalf of the state's cash-strapped utilities.
Lynch said she expects the remainder to be made up by issuing bonds. The
state Senate yesterday approved $13.4 billion in bonds to help cover
California's power costs.
However, those bonds would not be released until August, by which time
California's energy tab would be billions of dollars higher.
"There's huge cause for concern that this latest rate increase is a down
payment rather than anything close to a final installment," said Bob
Finkelstein, staff attorney for The Utility Reform Network in San Francisco.
The PUC's Lynch stressed that while California's new rate structure would
place a greater burden on the state's heaviest power users, the increases are
intended to spread the pain among all consumers.
"Energy is expensive for every hour of every day for every customer," she
said.
LINING UP TO GET PAID
That includes the state Department of Water Resources, which is spending
about $70 million a day to keep California's lights on.
While the PUC is moving to have more money collected from consumers to pay
California's power bills, it has yet to address the thorny question of how
the proceeds will be distributed among the various parties lined up for
compensation.
The Water Resources Department wants all rate-related revenues to first
replenish state coffers, while Pacific Gas and Electric Co. and Southern
California Edison Co. insist that they be paid as well for their own
expenses.
The utilities' costs include payments to small power generators that can no
longer afford natural gas to run their plants. The recent closure of hundreds
of such facilities is a key reason California is experiencing blackouts this
week.
Although PG&E said yesterday that most of the smaller generators with which
it does business are now back online, it is not yet clear whether the utility
will be able to keep paying for their power.
"It appears that everything (from the rate increase) is going to DWR (the
Water Resources Department)," said John Nelson, a PG&E spokesman.
Lynch said the PUC will take up the matter of apportioning funds at an
unspecified future date.
CONSERVATIVE USE PAYS
For the moment, state regulators have their hands full digesting two
competing -- and highly complex -- proposals for how rates should be
increased next week.
One proposal was submitted by an administrative law judge working with the
PUC and the other by Lynch. Commissioners will choose between them on Monday.
The two proposals are largely identical. Under both, residential customers
who can keep electricity usage within 130 percent of predetermined limits
would experience no rate increase.
The "baseline usage" figure -- included near the bottom of PG&E bills --
represents the minimal amount of power consumers require. It includes a
number of variables, such as climate, time of year and type of fuel used.
The PUC said about half of all utility customers statewide historically stay
within 130 percent of baseline limits.
Heavy residential users whose electricity usage tops 400 percent of baseline
figures would see power bills rise by as much as 40 percent. Heavy commercial
and industrial users would see bills rise by more than 50 percent.
The average increase for all PG&E residential customers would be about 16
percent, the PUC said, although this number is skewed by the addition of all
those customers whose bills would remain unchanged.
Harvey Rosenfield, head of the Foundation for Taxpayer and Consumer Rights in
Santa Monica, questioned whether these rate increases will be sufficient to
motivate greater conservation among consumers and thus ease California's
energy woes.
He called instead for the state's political leaders to seize generating
plants from out-of-state power companies and impose a special tax on the
companies' "windfall" profits.
"Unless our elected officials take action, this is just the beginning of our
rate increases," Rosenfield warned.
FEDERAL BUILDINGS IN SIGHTS
One of the main differences between the two rate-increase proposals is
Lynch's inclusion of a "real-time pricing program" for federal agencies.
If enacted, she said, federal buildings in California would be fully exposed
to the volatile wholesale power market and would pay whatever California pays
to keep the lights on throughout the day.
Lynch denied that this is an effort on the part of California officials to
drive home to federal authorities the impact of sky-high wholesale
electricity prices.
"It's just an experiment," she said.
While California officials have called on federal regulators and the Bush
administration to assist the state by capping wholesale power prices,
Washington has provided only limited relief to date.
The Utility Reform Network's Finkelstein complained that the proposed rate
increases place a severe burden on residential customers when commercial and
industrial users account for the greater percentage of power consumption.
"It was the commercial and industrial customers who were clamoring for
deregulation," he said. "You didn't hear any calls for deregulation from
residential customers."
Lynch said she was aware that residential users are being asked to carry a
high proportion of the load but said efforts to force industrial users to pay
higher rates ran into political opposition.
E-mail David Lazarus at [email protected].
,2001 San Francisco Chronicle ? Page?A - 1
Developments in California's energy crisis
The Associated Press
Thursday, May 10, 2001
,2001 Associated Press
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/05/10/state0
948EDT0159.DTL&type=news
, , -- (05-10) 06:48 PDT Developments in California's energy crisis:
THURSDAY:
-- Grid operators say cooler temperatures will help them meet California's
electricity demands. Officials at the Independent System Operator say
supplies are tight, but they don't expect blackouts.
-- The PUC holds a public hearing on the proposed rate structure in
Sacramento.
-- Gov. Gray Davis is scheduled to sign a bill authorizing $13.4 billion in
revenue bonds to pay for power for customers of the state's three largest
utilities. The bonds will repay the state general fund for $6.7 billion
authorized for power buys since January and will finance future electricity
purchases.
WEDNESDAY:
-- After a difficult afternoon, grid operators are able to avoid blackouts
after temperatures drop slightly.
-- The Public Utilities Commission releases recommendations for rate
increases, sparing about 9 million customers of Pacific Gas and Electric Co.
and Southern California Edison, but socking residential customers who don't
cut back with a 40 percent hike. PUC president Loretta Lynch says the plan is
designed to encourage conservation and provides $5 billion more to help pay
the state for the $6.7 billion it has spent so far providing electricity for
the customers of PG&E and Edison.
-- The state Senate approves a bill authorizing $13.4 billion in bonds for
power buys, sending the bill to the governor.
-- The governor meets with the CEOs of several major energy suppliers to
discuss the money they're owed by the state's two largest utilities, the
state's creditworthiness and how wholesalers can help the state during the
energy crisis. Davis says he won't be discussing any of the investigations
into price manipulation in the wholesale market.
-- A consortium of business interests releases a study saying continued
blackouts this summer could cost the state $21.8 billion in losses from
sales, wages and production.
-- PG&E says only eight of the 300 small power plants in its territory are
still shut down for payment reasons. All eight are natural gas-fired plants
that deliver a combined 109 megawatts of electricity, enough to power about
80,000 homes. Owners of these plants say they haven't been fully paid for
millions of dollars in past power deliveries and that they would operate at a
loss if they resume full operations.
-- PG&E asks U.S. Bankruptcy Judge Dennis Montali to void the appointment of
a committee representing ratepayers. The utility says that such a committee
isn't allowed under bankruptcy law and that the state attorney general can
represent ratepayers in the bankruptcy process.
Montali also says PG&E can use hundreds of millions of dollars in payments
from customers to buy gas, which the utility in turn sells to homes and
businesses. That came as other creditors wait to recoup billions of dollars
from the bankrupt utility. Montali rules that creditors lining up to collect
from PG&E cannot use any money they secure to sue the utility's largest
creditor, The Bank of New York.
-- A major electricity generator starts an ad campaign that offers to sell
power to the state for 2 cents per kilowatt hour -- as long as the state
provides the natural gas to produce the power. Reliant Energy says the ads
are necessary because their offer is being ignored by power buyers. Another
energy producer, Mirant, has also kicked off a media campaign.
WHAT'S NEXT:
-- Davis' representatives continue negotiating with Sempra, the parent
company of San Diego Gas and Electric Co., to buy the utility's transmission
lines.
THE PROBLEM:
High demand, high wholesale energy costs, transmission glitches and a tight
supply worsened by scarce hydroelectric power in the Northwest and
maintenance at aging California power plants are all factors in California's
electricity crisis.
Edison and PG&E say they've lost nearly $14 billion since June to high
wholesale prices the state's electricity deregulation law bars them from
passing on to consumers. PG&E, saying it hasn't received the help it needs
from regulators or state lawmakers, filed for federal bankruptcy protection
April 6.
Electricity and natural gas suppliers, scared off by the two companies' poor
credit ratings, are refusing to sell to them, leading the state in January to
start buying power for the utilities' nearly 9 million residential and
business customers. The state is also buying power for a third investor-owned
utility, San Diego Gas & Electric, which is in better financial shape than
much larger Edison and PG&E but also struggling with high wholesale power
costs.
The Public Utilities Commission has approved rate increases of as much as 46
percent on average to help finance the state's multibillion-dollar power
buys. The PUC is still determining how those increases will be spread among
utility customers.
,2001 Associated Press ?
PG&E says fewer small power plants offline
KAREN GAUDETTE, Associated Press Writer
Thursday, May 10, 2001
,2001 Associated Press
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/05/10/state0
343EDT0125.DTL&type=news
(05-10) 00:43 PDT SAN FRANCISCO (AP) -- Only eight of the 300 small power
plants in Pacific Gas and Electric Co.'s territory remain shut down for
payment reasons, the struggling utility says. That means more vital megawatts
have come back online that could help prevent rolling blackouts.
But operators of those so-called qualifying facilities say that's because
they're required to run their plants during periods of high demand to get
paid, not because of a change of heart over millions of dollars owed to them
for past electricity deliveries.
``What I believe will start happening is you will see QFs operate for a
minimal amount of time during peak times in order to get their capacity
payments,'' said Jan Smutney-Jones, executive director of the Independent
Energy Producers. ``They won't be fully available to California.''
All eight of the plants in PG&E's territory are natural gas-fired plants that
deliver a combined 109 megawatts of electricity, enough to power about 80,000
homes.
Lorie O'Donley, a spokeswoman with the Independent System Operator, which
manages California's electric grid, said that more of so-called qualifying
facilities had indeed come back online throughout the state.
``Right now we have 1,400 megawatts offline statewide,'' O'Donley said,
though she didn't yet know how many QFs were offline in PG&E's territory and
in other territories.
QFs harness solar, biomass, geothermal or wind power, as well as natural gas,
to generate environmentally friendly electricity, and provide electricity to
the state's investor-owned utilities under contract.
QFs contribute about 6,000 megawatts to the state's power grid, O'Donley
said. A few weeks ago, around 3,000 megawatts were offline. Many plants were
shut down in protest for not getting paid millions of dollars for past
electricity deliveries. That lack of power contributed to rolling blackouts
which swept the state.
The past debt, as well as a new pricing system ordered by the Public
Utilities Commission, would force QFs to operate at a loss if they start
producing power at full capacity, said Smutney-Jones.
The new PUC price structure ties how much they can charge for their
electricity to the price of natural gas coming in at the Oregon border, where
natural gas is cheaper. However, many plants can only ship and buy their gas
at the Topock border in the south, where prices are much higher.
``I don't think we're anywhere near out of the woods with respect to the QF
issue,'' Smutney-Jones said.
PG&E and Southern California Edison Co. have paid for QF electricity
delivered since April under order by the PUC. However, PG&E had made partial
payments on deliveries since last year, while SoCal Edison had paid nothing.
San Diego Gas and Electric Co. says it never fell behind on its payments.
www.pge.com
,2001 Associated Press ?
A look at two rate designs before power regulators
The Associated Press
Thursday, May 10, 2001
,2001 Associated Press
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/05/10/state0
338EDT0123.DTL&type=news
, , -- (05-10) 00:38 PDT
Key components of rate design proposals introduced Wednesday by Loretta
Lynch, state Public Utilities Commission president, and Christine Walwyn, a
PUC Administrative Law Judge. Both proposals suggest how to implement record
rate increases passed by the PUC on March 27. Both rate plans use baseline --
an average amount of power used based on a customer's climate, geography and
the time of year -- to help determine how much to charge customers.
President Loretta Lynch's proposal:
--Divides residential groups into five tiers
Tiers 1 and 2 include low-income customers exempt from rate hikes and power
use up to 130 percent of baseline.
Tier 3 covers power use from 130 percent to 200 percent of baseline. Rate
increase percentage was not released Wednesday.
Tier 4 covers power use from 200 percent to 300 percent of baseline. Rate
increase percentage was not released Wednesday.
Tier 5 covers power use beyond 300 percent of baseline. Lynch said power used
within these limits would receive an average 48 percent rate increase. Paul
Clanon, head of the PUC's energy division, says that number is closer to
35-40 percent on average.
--Commericial customers of PG&E would receive an average 37.5 percent
increase on all electricity used.
--Industrial customers of PG&E would receive an average 52 percent increase
on all electricity used, depending what time of day they used it.
--Agricultural customers of PG&E would receive an average 21 to 30 percent
rate increase on all electricity used, depending what time of day they used
it. Rates are capped at 30 percent.
--Would adopt a pilot program to introduce real-time pricing to federal
electric customers. Real-time pricing charges customers the full cost of
electricity. Therefore, proponents say, customers should shift their electric
use away from times of high demand and higher prices, thus lowering demand
and eventually lowering wholesale prices.
Administrative Law Judge Christine Walwyn's proposal:
--Divides residential groups into four tiers
Tier 1 includes low-income customers exempt from rate hikes and power use up
to 130 percent of baseline.
Tier 2 covers power use between 130 percent to 200 percent of baseline. Power
used within these limits would receive an average 3 percent increase.
Tier 3 covers power use betwen 200 percent to 300 percent of baseline. Power
used within these limits would receive an average 10 percent increase.
Tier 4 covers power use over 300 percent of baseline. This use would receive
an average 34 percent increase.
--Exact information on other classes was not provided.
Source: Public Utilities Commission, Energy Division
,2001 Associated Press ?
Lights stay on despite failure of big plant
John Wildermuth, Joe Garofoli, Chronicle Staff Writers
Thursday, May 10, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/10/M
N173855.DTL&type=news
With temperatures still high and generating plants running full out, state
power officials managed by the smallest of margins to prevent a third
straight day of rolling blackouts yesterday.
"It's been a roller-coaster of an afternoon," said a weary Stephanie
McCorkle, spokeswoman for the California Independent System Operator.
Demand was running slightly ahead of estimates early in the day, but the
situation improved when the ISO asked its interruptible power users to cut
their loads shortly after noon, McCorkle said.
Those users, who agree to temporarily limit their power use when asked in
return for lower rates, gave the system an additional 800 megawatts to work
with.
Temperatures again soared inland, but by 2 p.m. a slight break in the weather
raised hopes that the emergency could be easing.
Then, a 750-megawatt plant in Pittsburg broke down.
"That wrecked my day," said Jim McIntosh, the ISO's operations director.
While the ISO managed to beg, borrow and buy enough extra power to replace
the Pittsburg plant for the afternoon, the generator's loss is another
headache for a system already stretched to the maximum.
The Pittsburg plant will be shut down for a minimum of 60 hours while crews
repair a boiler tube leak, said a spokesman for Mirant Corp., the plant's
owner.
"I stress 'minimum' here, because that's usually the least amount of time it
takes to fix one of these things," said Chuck Griffin, a company spokesman.
The Pittsburg plant is the largest gas-fired generator in the state's power
grid, McIntosh said.
California already has plants that normally produce 12,000 megawatts of power
out for maintenance and repair.
"We knew May was going to be a tough month," McIntosh said.
E-mail the writers at [email protected] and
[email protected].
,2001 San Francisco Chronicle ? Page?A - 12
PG&E fights consumer committee
Obstruction feared in bankruptcy case
Bob Egelko, Chronicle Staff Writer
Thursday, May 10, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/10/M
N150518.DTL&type=news
Pacific Gas and Electric Co. asked a judge yesterday to dissolve a committee
appointed to represent consumers in the utility's bankruptcy case, calling
its members "special interest groups" who could obstruct the proceedings.
The nine-member committee, with representatives from businesses, government
agencies and consumer organizations, was named last week by the Justice
Department's bankruptcy trustee for Northern California and Nevada. Trustee
Linda Ekstrom Stanley said her action was needed to give the public a voice
because the state had declined to take part in the case.
The appointment was significant because the committee can participate fully
in the high-stakes case, conduct investigations, comment on PG&E's plan to
settle its debts and propose an alternative plan. No past utility bankruptcy
case has included a consumer committee.
In papers filed late yesterday, PG&E said the committee was unauthorized by
bankruptcy law and was potentially harmful.
The law allows only unsecured creditors and equity security holders to be
appointed to official committees, and consumers do not fit those categories,
PG&E attorneys argued.
A committee of the largest unsecured creditors, including banks and power
generators, was appointed earlier. That committee has also opposed the
appointment of the consumers' committee but has not filed legal objections.
Even if individual customers qualified for appointment, "none of the special
interest groups can claim a mandate to represent the interests of PG&E
ratepayers generally," the utility said.
PG&E said the two consumer organizations on the committee, The Utility Reform
Network and Consumers Union, have "well-known political and policy agendas
that have nothing to do with the reorganization principles of the Bankruptcy
Code" and "a demonstrated history of aggressive lobbying and litigation."
Noting that the consumers' committee would be funded by PG&E, the utility
said the consumer groups' "proclivities could substantially retard the
progress of this case and seriously prejudice its outcome."
U.S. Bankruptcy Judge Dennis Montali has scheduled a May 18 hearing on PG&E's
challenge. Stanley said she had met last week with PG&E representatives and
lawyers, concluding "after significant research" that her action was both
legal and necessary.
"The public's interest is not being protected in the bankruptcy case," she
said, noting that the state government was keeping out of the proceedings in
order to avoid exposure to PG&E lawsuits.
"The ratepayers are claimants here," Stanley said. "They have a right to
expect performance from this utility. They have a right to be heard here."
Committee member Nettie Hoge, executive director of The Utility Reform
Network, said she was confident in Stanley's judgment. "You've got a monopoly
utility and customers who are forced to pay rates for an essential service,"
Hoge said. "You've got to have customers involved in the discussions.
"The trustee has done an admirable job, choosing a committee that is very
diverse, folks who have a stake in every aspect of the economy."
E-mail Bob Egelko at [email protected].
,2001 San Francisco Chronicle ? Page?A - 10
Generators silent on Davis plan
He offers lower compensation to stave off Edison bankruptcy
Lynda Gledhill, Chronicle Sacramento Bureau
Thursday, May 10, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/10/M
N128963.DTL&type=news
Sacramento -- Gov. Gray Davis, who has portrayed power generators as greedy
villains in the state's power crisis, met face-to-face with industry
officials yesterday, calling on them to forgive some of the debt racked up by
an insolvent utility.
In a three-hour meeting described as "businesslike," Davis said generators
will have to accept 70 cents on the dollar of past debt as part of a solution
designed to prevent Southern California Edison Co. from going bankrupt.
At least one of the companies flatly rejected the idea after the meeting,
putting the deal in jeopardy.
If the two sides are not able to reach an agreement, Southern California
Edison would probably follow Pacific Gas & Electric Co. into bankruptcy
court, where creditors face a lengthy and uncertain resolution to recovering
debts.
Davis has run into legislative opposition to the original terms of the
agreement he brokered with Southern California Edison, which includes the
state's purchase of the utility's transmission lines as a way to help it
regain financial stability.
But the governor said he now believes that the deal can win passage in the
Legislature if the generators "take a haircut."
"I indicated that passage of the (agreement) that we signed with Edison would
only work if they agreed to reduce the amount of money they claim the
utilities owe them," he said.
Edison owes generators, including municipal utilities, between $1.1 billion
and $1.2 billion, Davis said. He said he agreed that talks would also take
place with municipal utilities about taking less money on the dollar.
Most of the generators refused to comment on the proposal, but a
representative of Reliant Energy dismissed the suggestion.
"That's simply an unreasonable number to start with," said John Stout, senior
vice president of Reliant, who said that 67 cents on every dollar the company
receives goes to pay the fuel bill, which doesn't include personnel and
maintenance of facilities.
"It doesn't get any supply built," Stout said of the idea. "I would much
rather get that 100 cents on the dollar" to invest in new generation.
The generators, who have reaped huge profits in the past year, said the main
thrust of the meeting was on short-term issues, such as lining up more power
for the summer.
Davis asked which companies were not yet selling to the state and said he
would work to get the Department of Water Resources to sign agreements with
them.
He also asked the generators to support the Edison deal, reportedly asking
them to try to win GOP support for it.
Davis agreed to a proposal from the companies to form permanent working
groups to deal with the crisis.
A handful of protesters led by former Senate candidate Medea Benjamin
condemned Davis for meeting with the companies. Dressed as pigs, with the
names of the companies on their masks, the five protesters brought a small
live pig into the Capitol, where it proceeded to defecate outside the
governor's office before the group was escorted out of the building.
Lawmakers have insisted that the generators must take a cut in the money they
are owed as part of any deal ending the energy crisis.
Senate President Pro Tem John Burton, D-San Francisco, said earlier in the
day that at least a 30 percent "haircut" would be necessary before he would
allow any deal to be approved.
"What we have here is a problem caused by the unfettered greed of generators
that has brought capitalism to a new low," Burton said.
He said if the generators don't agree to some kind of cut, they will find
themselves in bankruptcy court.
Earlier in the day, the Senate approved a bill that allows the state
treasurer to issue $13.4 billion in bonds. The money, which will eventually
be repaid by ratepayers, will be used to replace the funds that have drained
out of the state's general fund since January to buy electricity and pay for
future power purchases.
The state has spent about $6 billion so far -- money, Democrats argue, that
has to be replaced in order to fund other state services.
"Where do those revenues go?" asked Sen. Sheila Kuehl, D-Santa Monica, during
the floor debate. "They create child care slots, pay in-home support services
and provide medical benefits for the poor."
But Republicans said the state's budget should take some of the hit, instead
of pushing it all off on ratepayers.
Sen. Tom McClintock, R-Northridge, said the average ratepayer will see a $2,
000 increase on their utilities bills over the next 15 years to pay for the
bond.
The final vote was 23 to 15. Because not enough Republicans supported the
measure in either the Assembly or Senate to make the bill an urgency measure,
the law will not take effect until 90 days after the end of the special
session. Davis will sign the bill today.
Chronicle staff writer Greg Lucas contributed to this report.
E-mail Lynda Gledhill at [email protected].
,2001 San Francisco Chronicle ? Page?A - 10
Rate plans shield most households
Posted at 11:05 p.m. PDT Wednesday, May 9, 2001
MICHAEL
BAZELEY
Mercury News
State regulators on Wednesday painted the clearest picture yet of who will
bear the brunt of the biggest electrical rate hike in 20 years: Commercial,
industrial and agricultural users will be socked with power bills that could
soar by 50 percent or more.
But most residential customers will be shielded from huge rate increases,
regulators said. In two proposals unveiled Wednesday by the California Public
Utilities Commission and to be voted on Monday, only the heaviest residential
users get hit with big hikes, potentially doubling their rates in an effort
to push them toward conservation.
``The moderate users will be largely protected,'' said PUC chairwoman Loretta
Lynch.
The PUC has been grappling with designing a rate plan for customers since
March, when it announced an across-the-board rate hike of 3 cents per
kilowatt-hour. The PUC announced the increase -- designed to help the state
climb out of its ongoing power crisis -- before deciding how the rate
structure would work and considered at least 20 plans.
Details of the proposals were criticized Wednesday by energy experts who said
residential customers are not being charged enough to encourage conservation,
and by business representatives who said business and commercial users are
being unfairly targeted.
``This is not a real rate increase for the residential class and we need
one,'' said Severin Borenstein, director of the University of California
Energy Institute. ``This is ridiculous. This is not a way to respond. This
will send no price signal to people at all.''
Both proposals create a five-tier billing system for residential customers,
with heavy users -- nearly 10 percent of all households -- seeing their rates
possibly double. Energy misers and moderate users -- the other 7.3 million
households -- would either see no change at all in their bills or only modest
increases of up to about $12 month.
The consumer group the Utility Reform Network said it was generally satisfied
with the rate plans and how they spread the increase across all customer
groups.
``Yes, they've done a reasonable job of allocating the pain equitably,'' said
Bob Finkelstein, a staff attorney with the organization. ``But we shouldn't
be in this position in the first place. I think it's a shame we're even going
to see a rate increase.''
Covering state's costs
Lynch said this rate increase, along with a statewide bond recently approved
by lawmakers, should cover the state's costs in purchasing power.
But she left the door open for further rate increases, especially if energy
suppliers raise the price of electricity.
``If the sellers decide to turn up the heat and raise rates,'' she said,
``we'll have to look at those numbers again.''
Lynch and an administrative law judge both submitted similar plans. Because
Lynch is the commission president, her proposal would appear to be the most
likely to gain the support of fellow commissioners.
Industrial users appear to take the biggest hit under Lynch's plan. Those
equipped with special meters could see their rates double or more for power
they consume during peak demand periods. Small commercial users would pay
about 45 percent more for their ``on-peak'' electricity, Lynch said.
Lynch said she intentionally ``weighted'' the on-peak rates higher as a way
to encourage conservation.
``By promoting energy conservation during summer peak hours,'' she said in
her proposal, ``we attempt to limit blackouts and service interruptions in
order to preserve public health and safety.''
But industry representatives cried foul.
``These costs make it impossible to operate at a profit,'' said Jack Stewart,
president of the California Manufacturers and Technology Association. ``You
can't add these kinds of prices to the product and try to sell it. This looks
like the beginning of the ringing of the death knell for the economy.''
Agriculture caps
For agricultural users, the proposals are a mixed bag. Agricultural groups
were hoping the PUC would endorse a recommendation by Gov. Gray Davis to cap
their rate increases at 5 to 15 percent. Agriculture groups did get caps, but
they are higher than the governor's, ranging from 23 to 30 percent in both
plans.
Even before the rate increase, farmers and other agricultural businesses were
bracing for a rough summer. Because of a statewide water shortage, farmers
will need to rely more on groundwater pumps, significantly driving up their
energy use.
``We are definitely going to be impacted significantly,'' said Michael
Boccadoro, executive director of the Agricultural Energy Consumers
Association.
Federal buildings
Lynch also slung an arrow at the federal government, proposing that federal
buildings in California be forced to pay market rates for electricity. Her
proposal that federal buildings be given real-time meters could drive up
federal government energy rates by 10 times or more.
Lynch is angry with the federal government's hands-off attitude toward the
state's power crisis and its insistence that Californians pay market rates
for electricity.
Lynch's idea -- which she said would be studied in the coming weeks -- was
derided by several critics.
``This is something you do in kindergarten,'' said fellow Commissioner
Richard Bilas. ``All it's going to do is make matters worse'' with the
federal government.
The PUC considered rate proposals from utility companies, consumer groups and
the governor. Gov. Davis' proposal was perhaps the most closely watched
because three of the PUC commissioners are Davis appointees.
Davis proposed a slightly smaller across-the-board rate increase, an idea
that was rejected by both Lynch and the judge. But Lynch, a Davis appointee,
stressed that the two plans embrace other aspects of the governor's proposal,
such as the caps on agricultural rates.
Contact Michael Bazeley at [email protected] or (415) 434-1018.
Energy bond plan gets final legislative OK, faces delay
Posted at 8:28 p.m. PDT Wednesday, May 9, 2001
BY DION NISSENBAUM
Mercury News Sacramento Bureau
SACRAMENTO -- Amid rising partisan attacks, state Democrats gave final
approval Wednesday to a record $13.4 billion energy crisis bond plan to
replenish the drained California budget and buy critical power for the
state's impoverished utilities.
Democrats blasted Republicans for their steadfast refusal to support the plan
-- opposition that will force the state to continue to use its already
strained budget to buy power through the summer.
``I think the Republicans are playing a perilous game with dire
consequences,'' said Assemblywoman Carole Migden, D-San Francisco, after the
Senate approved the bill on a 22-15 vote. Gov. Gray Davis plans to sign the
bill today.
Without two-thirds support in both houses, the bonds cannot be sold
immediately, and the state will lose the chance to line up about $4 billion
in short-term loans.
Because Democrats could pass the bond plan by only majority votes, the
Legislature will have to shut down its special energy crisis session Monday.
Without the two-thirds support, the bond measure cannot become law until 90
days after the session comes to a close.
Closing the session would force state lawmakers to reintroduce hundreds of
other energy crisis bills when Davis, as expected, launches a second energy
crisis special session.
Zane Mann, publisher of the monthly California Bond Advisor newsletter,
blasted Republicans for not throwing their support behind the bonds.
``I can't understand why the Republicans did what they did,'' Mann said. ``I
find it totally obstructionist. They're willing to sell out the state in
order to blame Davis.''
During Wednesday's floor debate, Sen. Tom McClintock, R-Thousand Oaks, said
bonds would saddle each Californian with an extra $2,000 on their energy
bills.
``This expense was incurred because of some very bad decisions by elected
officials of California,'' he said.
The state has just about used up its $6.6 billion budget surplus buying power
for the state's cash-strapped utilities and will have to tap unused cash from
state programs to continue to buy power this summer.
There is still concern that the state will be unable to find buyers for the
largest bond measure in U.S. history.
Mann, as well as the bank behind the bonds, J.P. Morgan, insist there's a
market for them. Mann said the state's two largest mutual funds are waiting
to buy the bonds -- if they have a high interest rate.
If not, he said, ``they'll go out the window.''
Mercury News Staff Writer Jennifer Bjorhus contributed to this report.
Fusion research gets a boost
Published Thursday, May 10, 2001, in the San Jose Mercury News
BY JIM PUZZANGHERA
Mercury News Washington Bureau
WASHINGTON -- With California and the nation facing energy troubles, Rep. Zoe
Lofgren introduced bipartisan legislation Wednesday to accelerate research
into fusion power, a potential long-term solution that promises cheap,
environmentally friendly power if major scientific hurdles can be overcome.
Fusion is the way the sun and stars produce their energy. Unlike nuclear
power, which is a product of fission, or the splitting of atoms, fusion
produces energy by fusing atoms together -- with no high-level radioactive
waste. If it works, 50 cups of seawater could produce as much energy as two
tons of coal, advocates said.
Fusion energy has been proven possible in laboratories, but a power plant
using the technology is still decades away, experts said. The Department of
Energy is spending $248 million on fusion research this year, with the
Lawrence Livermore National Laboratory one of several facilities around the
country receiving funding.
Fusion research funds, however, have decreased about 40 percent in the past
decade, and Lofgren wants to reverse that. Her legislation, the Fusion Energy
Sciences Act of 2001, seeks an increase of $72 million over the next two
years. It would also require the energy secretary to submit a plan by July
2004 for the next major step in fusion energy, a burning-plasma experiment.
``It is time for this country to move beyond caveman technology to the
technology of the future -- fusion technology,'' said Lofgren, D-San Jose, as
she announced the legislation in front of the Capitol Hill Power Plant, which
burns coal, oil and natural gas to power congressional offices. She was
joined by Reps. Mike Honda, D-San Jose, Randy Cunningham, R-Escondido, and
Rush Holt, D-N.J., a physicist. The bill also is co-sponsored by Reps. Ellen
Tauscher, D-Walnut Creek, and Barbara Lee, D-Oakland.
Fusion requires intense heat and pressure. Under the proper conditions, like
those inside the sun, the nuclei of two hydrogen atoms can be forced together
so tightly that they fuse, forming a helium nucleus and releasing large
amounts of energy that could be harnessed for electricity.
The major source of fusion fuel is deuterium (heavy water), which is readily
extracted from water. The other fuel source, tritium, is widely available
from seawater and land deposits.
Fusion is not to be confused with so-called ``cold fusion,'' a disputed
theory that few scientists believe is achievable. In 1989 two Utah scientists
reported cold-fusion success in the laboratory by immersing metal electrodes
in a jar of heavy water. Their results were later discredited, but some
scientists continue to experiment with cold fusion.
Although research on ``hot'' fusion has been moving forward, it still has
many scientific hurdles to overcome, said Robert Park, a physics professor at
the University of Maryland.
``We're still a long way away. Thirty years ago they used to say it would be
30 years, and they're still saying the same thing,'' he said. ``We can fuse
atoms every day, but the trick is when you produce more energy than it takes
to get there.''
The head of one of the leading fusion research facilities in the country
agreed that it will probably be the middle of this century before a
functioning fusion power plant is operating, but he said the scientific
advances ``have really been fantastic.''
Robert Goldston, director of the Plasma Physics Laboratory at Princeton
University, said that as a graduate student there in 1974 he and other
researchers were thrilled to produce one-tenth of a watt of electricity for
one-hundredth of a second using fusion. In 1997, they produced 10 million
watts of electricity for about a second -- a degree of advance that outstrips
the phenomenal increases in computing power.
``The trick now is to make fusion as practical as computers are,'' he said.
``It's a grand scientific challenge.''
Power is money
PUC details plan to raise Edison rates up to 34%. Half of users to see no
hike.
May 10, 2001
By KATE BERRY
The Orange County Register
JOHN MEE of Fullerton is focused at a PUC hearing Wednesday at Fullerton
College.
Photo: Daniel A. Anderson / The Register
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Customers of Southern California Edison would see their electricity bills
jump as much as 34 percent under rate proposals unveiled Wednesday by the
state's top energy regulator.
The Public Utilities Commission designed two rate plans to encourage energy
conservation and repay the state of California for wholesale power purchases.
Though many customers would pay higher rates, half of all residential
customers, or 4 million households, would not be subject to any rate increase
at all. In January, the Legislature blocked rate hikes for customers who use
relatively little electricity or have low incomes.
Loretta Lynch, president of the PUC, blamed "unbounded and exorbitant
wholesale electricity prices" for the proposed increases, which she disclosed
at a news conference in San Francisco. "We all have to share the pain of
that," she said.
If either of the proposed plans is approved Monday by the commission, the
higher rates will appear on electricity bills beginning June 1.
The rate increase won't apply to customers of San Diego Gas & Electric or
Anaheim Public Utilities.
The burden of higher rates would fall primarily on the 2 million households
that consume the most electricity.
A household that pays $114 a month would, on average, pay $12 more. Bigger
users with monthly bills of $213 would pay an additional $73 - a 34 percent
increase.
The hikes would come on top of a 9 percent increase approved by the PUC in
January.
Economic crisis in forecast
May 10, 2001
By ANNE C. MULKERN
The Orange County Register
Rolling blackouts this summer could cost California $26.4 billion in lost
production and income, a business report released Wednesday forecasts.
"This isn't an energy crisis, it's an economic crisis,'' said Nancy
Heffernan, spokeswoman for the group of retailers, manufacturers and other
business groups that funded the $25,000 study.
The report came as Orange County and California escaped a third consecutive
day of rolling blackouts. Energy demand fell when the weather cooled.
The report was released to coincide with a state Public Utilities Commission
announcement on higher electricity rates. The highest rate hikes - up to 50
percent - will hit industrial customers.
Although economists previously have said the energy crisis is unlikely to
cause a recession, the report said blackouts could cut state productivity
growth from current projections of 2.3 percent to less than 1 percent.
If the energy crunch is more severe, economic growth could stop, the report
said.
The study, by New Jersey-based research AUS Consultants, is based on
interviews with 34 businesses in 25 different industries.
It assumes 110 hours of blackouts will darken businesses and homes this
summer and that the average customer will experience about 20 hours of
blackouts.
Based on the state's so-far limited experience with rolling blackouts, that
prediction may be overly severe.
The report assumes statewide blackouts, but not every customer is blacked out
during any given outage. On March 19, for example, when the most severe
blackouts so far hit the state, only 14 percent of Orange County was affected.
GOP stalls sale of bonds with vote
The $13.4 billion measure is approved, but it lacks two-thirds support for
immediate implementation.
May 10, 2001
By JOHN HOWARD
The Orange County Register
For Gov. Gray Davis, the bond sale and the new state budget for the 2001-02
fiscal year beginning July 1 were linked.
The governor had hoped to win Republican support for the bonds, and thus a
two-thirds majority in both houses, which would have allowed the legislation
to take effect immediately and the bonds to be marketed as early as this
month.
But Republican opposition meant the legislation was approved by only a simple
majority, forcing a 90-day wait.
"We think we're probably biting off more financing than we can chew," said
Jaime Fis Fis, spokesman for Assembly Republican Leader Dave Cox.
That means the bond-sale proceeds won't be contained in the state's spending
plan until weeks after the new fiscal year begins, and if the market sours
for such a large bond issue the state could be affected.
"This greatly complicates the budget process," Davis said.
Earlier in the day, the Legislature's financial expert said a slowing economy
was causing a drop in incoming revenue that could force some $3.4 billion in
cuts from the plan Davis proposed in January.
The administration is going to announce its own view of the budget on Monday,
but Davis signaled that the worsening economy would affect his spending plan.
"I suspect it will have an impact," he said.
The sole Democratic dissenter in Wednesday's 23-15 Senate vote was Sen. Joe
Dunn, D-Santa Ana.
He did not address the bond bill on the Senate floor, but earlier said he
opposed the bond plan because it was not tied to aggressive action targeting
profiteering power generators.
Electricity notebook
Davis asks power suppliers to accept 30% less than owed
May 10, 2001
From Register news services
SACRAMENTO Gov. Gray Davis asked generators to accept 30 percent less than
they are owed for electricity sold to the state, saying the discount is the
price of keeping Edison International solvent.
Davis said power suppliers must accept less than they are owed in order to
win legislative approval for a financial-rescue package designed to keep
Edison, owner of the state's No. 2 utility, Southern California Edison, out
of bankruptcy. PG&E Corp.'s Pacific Gas & Electric declared bankruptcy April
6.
"I suggested that 70 percent now was better than anything they could get in
bankruptcy three to four years down the line," the governor said during a
press conference in Sacramento.
Davis made his pitch during a meeting with executives from 12 of the largest
U.S. energy producers.
Air pollution rules to be modified for power plants
DIAMOND BAR Southern California air regulators are close to slashing their
market-based system for controlling power plant pollution, which for years
has allowed plant operators to avoid installing emission controls.
The move is designed to allow large power plants to operate at full capacity
without facing stiff fines as they try to meet the demand for electricity.
The change was prompted by an executive order from Gov. Gray Davis requiring
air districts to let large generators run at the greatest capacity.
Rules expected to be considered Friday by the South Coast Air Quality
Management District Governing Board would curtail a program known as RECLAIM,
which has allowed power plants to buy and sell unused emission "credits"
controlled by other polluters.
Edison, PG&E allege El Paso withheld natural gas supply
SAN FRANCISCO California's two largest utilities have filed testimony with
federal regulators alleging El Paso Corp. withheld natural gas from the
state, leading to an overcharge of some $3.7 billion in energy costs over the
past year and worsening the state's power crisis.
"We believe El Paso has withheld significant amounts of natural gas from
California and manipulated gas prices to the tune of $3.7 billion. ... PG&E
also supports these findings," said Kevin Lipson, lead attorney for Edison
International unit Southern California Edison, the state's No. 2
investor-owned utility.
A spokesman for PG&E Corp. unit Pacific Gas & Electric, the state's No. 1
utility, confirmed Wednesday that it made a filing late Tuesday with federal
energy regulators alleging that El Paso Corp. "clearly possessed the ability
and incentive to raise (gas) prices."
Natural-gas prices in California, the highest in the U.S. over the past year,
have been a key reason for the surge in power prices in the state because
gas-fired turbines are the single biggest source of electricity in
California, providing more than a third of the power used by the state's 34
million residents.
Regulator says more electricity rate hikes are likely
PUC member tells a Fullerton audience that more increases may be necessary.
May 10, 2001
By KATE BERRY
The Orange County Register
FULLERTON COLLEGE economics professor Arienne Turner brought students to
Wednesday's PUC hearing on power-rate increases.
Photo: Daniel A. Anderson / The Register
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A California energy official said consumers can expect more electricity rate
increases beyond the proposals unveiled Wednesday.
Carl Wood, one of five commissioners on the state's Public Utilities
Commission, said at a public hearing at Fullerton College on Wednesday that
raising electricity rates was a "hateful choice," but one the commission may
have to revisit.
"This may not be the end of the rate increases," Wood told about 250 people
at the hearing, one of nine held by the PUC throughout California this week.
The hearings were scheduled to allow consumers a voice on how the rate
increase should be divvied up among different classes of customers.
PUC President Loretta Lynch unveiled two rate proposals Wednesday. Under
those plans, rate increases of as much as 34 percent would show up on the
bills of customers of Southern California Edison and Pacific Gas & Electric
starting in June. The increases would be retroactive to March 27.
Consumers expressed anger and frustration at the hearing in Fullerton before
Wood and Administrative Law Judge Michael Galvin.
"Consumers did not create this mess, and we should not have to pay for it,"
said Ruth Shapin, a Santa Ana lawyer.
Darrell Nolta, a systems engineer in Westminster, held up copies of the 1996
law that deregulated the electricity industry, which promised consumers a 20
percent reduction in retail electricity rates by 2002.
"I want a refund of my money," Nolta said, referring to the roughly $19
billion in so-called "stranded costs" that the state's three largest
utilities have collected in the past four years and transferred, in part, to
their parent corporations. "I want to be able to sue the state of California
and the PUC for this."
The money transfers and salaries paid to executives at Edison and PG&E were
the subject of most of the consumer vitriol.
The PUC is investigating the utilities' connections with their parent
companies. The utilities say their actions have been legal.
Tom Martin, a representative of the Small Manufacturers Association of
California, said the rate increases will cripple the state's economy.
"Some people believe businesses can just raise prices to make up the
difference," he said. "But they cannot."
Under the proposals released Wednesday, nearly half of all consumers would
pay no rate increase. The 2 million heaviest residential users would pay 10
percent to 34 percent more, or an extra $12 to $73 a month. The 2 million
households that are medium users would pay just $2 more a month, a 3 percent
increase.
Small and medium-sized businesses, which pay lower rates than consumers, can
expect a 35 percent increase, while farmers will pay 23 percent more.
Industrial users face a 50 percent rate hike.
The rates would be partly used to pay back up to $13.4 billion in bonds the
state Senate approved Wednesday to recover state expenditures on power since
January and future purchases. In just four months, the state has spent about
$6 billion buying power for Edison, PG&E and San Diego Gas & Electric Co.
customers. Lynch, the PUC president, said the rate proposals would raise $5
billion statewide this year.
Under deregulation, consumers' rates were frozen at artificially high levels
to allow the utilities to collect "stranded costs," mostly investments in
nuclear power plants and contracts with small energy producers. The utilities
thought those investments would be unprofitable in a deregulated environment.
Starting a year ago, when wholesale electricity prices rose above the level
of frozen retail rates, the utilities were stuck with losses on their power
purchases. The losses amounted to more than $14billion for Edison and PG&E
through January.
"Most of the money in this crisis went to the power cartel," said Wood,
referring to private power generators that purchased power plants from Edison
and PG&E under deregulation. "In the long run, we have to move back to a
regulated system because this is an essential commodity."
PG&E declared bankruptcy April 6, saying it could no longer shoulder its
debt.
Starting all over again
The Legislature's special sesion on the power crisis ends today -- with more
work to do at an added cost.
May 10, 2001
By HANH KIM QUACH
The Orange County Register
SACRAMENTO The state will have to restart a $3.2 million legislative process
after lawmakers today adjourn the special session devoted to fixing the
energy market.
The energy crisis is by no means solved, but because of the rules of the
Legislature, the special session must be gav eled to a close to ensure that
the $13.4 billion revenue bond bill passed by the Senate on Wednesday can be
enacted 91 days after Gov. Gray Davis signs it.
But by abruptly ending the session, about 200 energy-related bills that
lawmakers have been hashing out will die, said Jon Waldie, chief consultant
for the Assembly Rules Committee.
Lawmakers would have to reintroduce them in a new special session with a new
bill number, he said. The non-partisan Legislative Analyst's Office estimates
that it costs an average of $15,900 for each bill that moves through the
legislative process. That accounts for printing and staff hours.
Democrats are trying to make sure bills don't have to go through the trouble
of being rescheduled for hearings and re-debated in committees, both
time-consuming efforts, said an aide for Assembly Speaker Bob Hertzberg.
But restarting the process has Republicans worried.
"It's going to delay the process,'' said Assemblyman Tony Strickland,
R-Ventura. "How can the process be delayed when people are going through
rolling blackouts?"
It's also more work for staff members who have spent countless hours drafting
ideas into legalese.
Bion Gregory, lead attorney for the Legislative Counsel's Office, said the
attorneys need to recreate bills each time they're amended to show how the
proposal would change from existing law.
"It's not a matter of taking language and reproducing it,'' he said.
The special session mechanism allows lawmakers to pass and enact bills more
quickly than in the regular session. In special session, bills that pass with
a simple majority vote take effect 90 days after the session adjourns, rather
than the following Jan. 1, as with regular-session bills.
Bills passed with a two-thirds majority in special session can be enacted
immediately after the governor signs them. In regular session, such bills
don't become effective until 90 days after signed.
Having a second session on the same topic didn't concern Ron Roach of the
California Taxpayers Association as much. He said the second session might
even be more efficient because lawmakers will be more aware of each other's
bills and not introduce similar ones. In fact, the second time around might
streamline the process, he said.
In addition, some of bills that have been largely passed over as legislative
leaders search for more immediate fixes to the energy problem are probably
not going to make it far anyway.
"If they didn't get a hearing (and voted on by now) they never will - what's
the point?'' Roach said.
Davis is set to sign a $13.4 billion bond-issue measure today to cover
electricity costs
May 10, 2001
By JOHN HOWARD
The Orange County Register
SACRAMENTO Gov. Gray Davis is prepared to sign off on the biggest state loan
in history today - a $13.4 billion bond sale to buy emergency electricity for
California's beleaguered utilities and replenish a state treasury sapped by
the energy crisis.
The average residential utility ratepayer would pay $2.50 to $3 per month for
up to 15 years to retire the debt. Some critics placed the figure at $10.55
per month for ratepayers of all sizes.
The Democrat-ruled state Senate, like the Assembly earlier in the week,
approved the bond-sale legislation along partisan lines Wednesday.
The bill authorizes the state to borrow up to $13.4 billion by selling
revenue bonds beginning in August. The money will be used to pay back the
state for more than $6 billion worth of electricity it has bought since
January on behalf of the utilities and to finance the purchase of new power
in long-term contracts.
Davis said he plans to use about $12.5 billion of the bond and keep the rest
in an emergency reserve.
Democratic supporters said the borrowing protected the state budget as
California faces an economic downturn and dwindling revenue, and protected
potentially threatened programs. Republican critics said the bonds would
burden ratepayers for years.
"If we don't pass this bill today, we're going to have to wipe out programs,"
said Sen. Tom Torlakson, D-Antioch, although he did not say which programs
could be affected.
But Republicans in both houses said the bonds were too high, and urged the
governor and legislative leaders to strike a compromise.
Thursday, May 10, 2001
Papering over state electricity problems
Crisis management and recovery plans are the way to solve a crisis, not
piecemeal programs and gimmicks. But even as new blackouts roll across the
state, piecemeal is about all we're getting in the way of solutions from Gov.
Gray Davis and the California Legislature.
The latest one came Monday when the Assembly voted for a $13.4 billion
revenue bond to pay for this year's high electricity bills. (Revenue bonds
are paid by a service's users, in this case ratepayers.) The Senate is
expected to pass the bill, Senate Bill 31X, today or Thursday.
Because the two-thirds threshold was not met in the Assembly, the bonds could
not be issued immediately, but instead will be issued in 90 days, in August.
In the 49-29 vote, only Republican Assemblyman Anthony Pescetti of Rancho
Cordova sided with the Democratic majority.
The bonds will repay the state general fund for electricity purchases which,
so far in the crisis, amount to at least $5 billion and will rise much higher
later this year. Bonds will be repaid over 15 years.
In a conference call Gov. Davis held with us and several other newspapers
Monday, he explained that he hoped for bipartisan support for the bonds
because the delay "would greatly complicate the budget process and could
damage the economy. It's my hope that both parties can be part of the
solution, not part of the problem. People elected us to be problem solvers."
The Republicans' beliefs were summarized by Assemblyman Tony Strickland of
Thousand Oaks. "Let me tell you what our caucus' philosophy is," he told the
San Diego Union-Tribune. "If you have money today, you don't borrow against
your children and grandchildren's future." The Republicans favor using the
state budget surplus to pay for the state electricity purchases.
Indeed, the bond sale will create more problems than it solves. "It's not
needed," Adrian Moore, director of economic studies at the Reason Public
Policy Institute, told us. "It helps cover up the costs of what Davis's
overall policies are bringing about. It just stretches it out so it's not
paid this budget cycle. Plus it adds interest [costs]."
What's really needed, Mr. Moore said, is to "get back to a market-based
solution." Retail prices to ratepayers, now capped, should be further freed.
Higher retail prices then would bring about more conservation and power plant
investment and, as less electricity is used, wholesale and retail prices
would moderate.
And, the governor and Legislature should stop attacking power producers with
threats of seizures and taxes, especially given the intermittant price caps
instituted by federal energy regulators. Leaders should instead encourage
producers to build here.
The longer California's leaders paper over the dimensions of the crisis, the
longer it will persist and the more expensive it will become.
Task Force To Propose Legislation
By SCOTT LINDLAW
Associated Press Writer
WASHINGTON (AP) via NewsEdge Corporation -
President Bush's energy task force plans to
propose legislation allowing the seizure of private property to
accelerate the construction of electrical power lines, three
administration officials said Tuesday.
The recommendation is contained in the final draft of a broad
energy blueprint to be unveiled by President Bush next week, the
officials said. The ``eminent domain'' authority allows the
government to appropriate private property for public use; the
property owners are usually compensated.
The Federal Energy Regulatory Commission already has eminent
domain authority over the siting of natural gas pipelines, but has
no such power over long-distance electricity transmission lines.
The lack of authority often requires electrical companies to get
approval from several states and numerous local jurisdictions.
Federal authority to locate transmission lines would quicken the
approval process, supporters of the provision contend. The shortage
of transmission lines has been cited by officials as one reason for
bottlenecks in the electric grids and a shortage of power in areas
of high demand.
New lines also are needed to connect new power plants to the
grid.
Vice President Dick Cheney said on CNN Tuesday that the energy
task force he heads will include a recommendation on eminent domain
for power lines.
``The issue is whether or not we should have the same authority
on electrical transmission lines'' as the government has on gas
lines, Cheney said. ``That's never been granted previously.''
He did not say what the recommendation would be.
But the administration officials, speaking on condition of
anonymity, said the report would ask Energy Secretary Spencer
Abraham to draw up legislation allowing utilities to obtain rights
of way for transmission lines, presumably through FERC.
The energy strategy report is going to the printers in stages
this week. Officials said there was no talk of taking out the
eminent domain provision, though they could not rule out that
remote possibility.
Utilities, not the government, would own the property, one
official said.
Earlier this year, a draft of a Republican energy bill in the
Senate had included giving FERC eminent domain authority for power
lines. But that provision later was deleted when it was introduced
by Sen. Frank Murkowski, R-Alaska.
The electric utility industry for some time has been lobbying
for a federal role in siting electric power lines, which now must
go through a maze of overlapping local jurisdictions and state
agencies for approval.
``If FERC has the eminent siting authority, that will help
facilitate siting of electric power transmission lines,'' said Jim
Owen, a spokesman for the Edison Electric Institute, which
represents investor-owned utilities.
It especially would help in getting interstate transmission
rights of way approved, he said.
``But it's still not a silver bullet because ... it can still be
a cumbersome process,'' said Owen. Some natural gas pipeline cases
before FERC have taken years to resolve, he said.
Critics have questioned whether Cheney's task force will
emphasize power production and transmission over conservation.
Cheney said the report would use tax breaks to encourage
conservation.
``Most of the financial incentives that we recommend in the
report go for conservation or renewables, for increased
efficiencies,'' Cheney said.
The task force will likely recommend tax incentives for purchase
of ``hybrid,'' ultra-efficient automobiles that run on gasoline and
electricity, one administration official said. A similar provision
was included in the budget Bush sent to Congress earlier this year.
The report will also call for a new tax credit for builders of
certain new power plants.
Cheney outlined the energy plan at the weekly Senate GOP
conference Tuesday.
According to one Republican who was present, the vice president
said that while he supported energy price controls when President
Nixon used them three decades ago, he wouldn't advocate them now.
Caps that are too high cause voters to blame politicians rather
than the utilities, Cheney said, according to the Republican.
Excessively low caps undermine the incentives for developing new
power sources, Cheney said.
After Cheney spoke, Sen. Gordon Smith, R-Ore., rebutted, saying
he came from a state where energy prices have risen enormously in
the past year, and he favors price caps.
Stage 2 Electrical Emergency Declaration; SCE to Curtail 'Load' for Some
Customers
ROSEMEAD, Calif., May 9 /PRNewswire/ via NewsEdge Corporation -
The California Independent System
Operator (Cal-ISO) again declared a Stage 2 Emergency this afternoon, due to
low power reserves and increased demand for power because of high
temperatures. The agency called upon Southern California Edison and other
investor-owned utilities to begin voluntary "load" curtailment programs for
certain customers within their service areas.
Cal-ISO said the Stage 2 Emergency would be in effect from 11:45 a.m.
through midnight. Cal-ISO and SCE are making urgent appeals for all customers
to immediately reduce their electricity consumption so that reserve levels do
not deteriorate further.
To achieve this load reduction during Stage 2, SCE is required to activate
its voluntary load curtailment program, under which large industrial,
commercial, and agricultural customers have agreed to temporarily curtail
electricity usage during an electrical emergency in exchange for reduced
rates.
Should the situation worsen for any reason, and power reserves drop below
1.5%, Cal-ISO could declare a Stage 3 Emergency, the most critical status.
Cal-ISO could direct utilities to "drop load," necessitating involuntary
rolling blackouts for groups of customers across their service areas until
sufficient reserve levels are achieved.
SCE customers are asked to reduce power consumption by turning off any
unneeded electrical appliances and lights, especially during the state's daily
peak consumption period -- noon to 6 p.m.
Following are some effective ways customers can reduce their power use and
not be greatly inconvenienced:
LARGE ENERGY USERS
-- turn off all auxiliary or redundant machinery where possible;
-- consider shifting or staggering operations outside the hours of highest
electrical demand, typically noon to 6 p.m.;
AIR CONDITIONERS
-- set thermostats no lower than 78 degrees (F);
-- use electric fans instead of air conditioning if practical;
-- avoid using evaporative coolers or humidifiers at the same time an air
conditioner is running;
-- avoid cooling unoccupied rooms;
-- open windows during evening hours to take advantage of cool breezes;
APPLIANCES AND TOOLS
-- delay until evening hours the optional use of appliances (dishwashers,
clothes washers and dryers), chargers, power tools, and electrical
equipment;
REFRIGERATORS AND FREEZERS
-- avoid unnecessarily opening refrigerators;
-- keep your refrigerator or freezer set at the proper temperature;
-- be sure to use the "power-saver" switch if your refrigerator has one;
-- keep the condenser coils behind or beneath your refrigerator/freezer
clean (refrigerators represent approximately 25% of the electric bill
for a typical residence);
ADDITIONAL TIPS
-- run swimming pool equipment during early morning and evening hours;
-- limit the reopening of a refrigerator, which is a major user of
electricity in most homes;
-- use drapes and blinds to keep out direct sunlight;
-- replace incandescent light bulbs with ENERGY Star(R) qualified compact
fluorescent bulbs;
-- always wash a full load of clothes or use the variable water level
adjustment for smaller loads; and
-- be sure your home has adequate insulation.
For more information about electricity conservation and SCE's energy
efficiency programs, go to www.sce.com.
An Edison International (NYSE: EIX) company, Southern California Edison is
one of the nation's largest electric utilities, serving a population of more
than 11 million via 4.3 million customer accounts in a 50,000-square-mile
service area within central, coastal and Southern California.
SOURCE Southern California Edison
CONTACT: Corporate Communications of Southern California Edison,
626-302-2255
Web site: http://www.edisonnews.com
Web site: http://www.sce.com
(EIX)
B] FULL/ Pacific Gas & Electric restores all Qualifying Facilities --Pacific
Gas & Electric
says 8 of 300 QFs still shut down
May 10, 2001
New York, May 9 (BridgeNews) - Pacific Gas & Electric Co. restored nearly all
of the Qualifying Facilities that had been shut down earlier in the year due
to financial reasons. The company now has only eight of the more than 300
Qualifying Facilities under contract to it still shut down for
payment-related reasons.
--Adrian Viegas, BridgeNews
* * *
The following is the text of today's announcement, with emphasis added by
BridgeNews. BridgeStation users will find links to company data at the end:
Most of PG&E's Qualifying Facilities are Back On Line; Only 3% Still Shut
Down for Payment-Related Reasons
SAN FRANCISCO----May 9, 2001--PACIFIC GAS AND ELECTRIC COMPANY ANNOUNCED
TODAY THAT NEARLY ALL OF THE QUALIFYING FACILITIES (QFS) THAT HAD SHUT DOWN
EARLIER THIS YEAR FOR FINANCIAL REASONS HAVE RETURNED TO SERVICE, AND ARE
AGAIN GENERATING POWER FOR PG&E'S ELECTRIC CUSTOMERS.
ONLY EIGHT OF THE MORE THAN 300 QFS UNDER CONTRACT TO PG&E ARE STILL SHUT
DOWN FOR PAYMENT-RELATED REASONS. THESE EIGHT REMAINING GENERATORS TYPICALLY
DELIVER ABOUT 109 MW OF POWER, OUT OF THE ROUGHLY 2,500 MW TOTAL TYPICALLY
DELIVERED BY ALL PG&E-CONTRACTED QF GENERATORS COMBINED. ALL EIGHT FACILITIES
ARE GAS-FIRED GENERATORS.
"We remain optimistic that these last few generators will come back on line
in the next few days, and we are working with them to help make that happen,"
said Gordon R. Smith, president and CEO of Pacific Gas and Electric Company.
"Ironically, our Chapter 11 filing has provided additional financial
certainty to many QFs, since we are now able to pay them in full for power
they are delivering, and since rates currently cover their costs. We will
continue to work with the QF producers to assure that all of the power they
are supposed to deliver will be available for our customers."
The QFs under contract to Pacific Gas and Electric Company have been paid in
full since early April, and received partial payments for prior deliveries.
In addition to the facilities shut down for nonpayment, another 13 facilities
that would ordinarily be delivering an average of 82 mw are out for scheduled
maintenance or unplanned outages. This amount is fairly typical and not
unusual for this time of year.
For energy saving tips, please visit our website at www.pge.com/123 or
contact the Smarter Energy Line at 1-800-933-9555.
CONTACT: Pacific Gas and Electric Company
News Department, 415/973-5930
End | {
"pile_set_name": "Enron Emails"
} |
Hi Ben,
I got an opinion from outside counsel. I'll give it a look so we can
discuss. I'll move it up on the list.
Kay
From: Ben F Jacoby @ ECT 01/16/2001 04:03 PM
Sent by: Ben Jacoby@ECT
To: Kay Mann/Corp/Enron@Enron
cc: Chris Booth/NA/Enron@Enron, Ron Tapscott/HOU/ECT@ECT
Subject: Meeting to Discuss 501D5A Status
Kay:
We really need to get on top of the situation with the 501D5A. I believe SW
is now taking the position that the generator was delivered under the terms
of the contract, and risk of loss resided with us at the time of the "event".
I furthermore understand they are taking the position that if we want a
replacement generator, that we need to execute a change order. Kind of makes
you feel like you're getting squeezed...
At the end of the day, we've got $25 million in a CT without a generator. ENA
will get saddled with these costs if we do not find a resolution either
through a buyer or a settlement with SW.
I really hope we can focus on this in the next couple of days. FYI, both
Chris Booth and Ron Tapscott have been drafted on this effort.
Thanks,
Ben
---------------------- Forwarded by Ben Jacoby/HOU/ECT on 01/16/2001 02:49 PM
---------------------------
Enron North America Corp.
From: Chris Booth @ ENRON 01/16/2001 03:48 PM
To: Scott Laidlaw/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Matthew
Tezyk/ENRON_DEVELOPMENT@Enron_Development, James P Studdert/HOU/ECT@ECT, Ron
Tapscott/HOU/ECT@ECT, Kay Mann/Corp/Enron@Enron
cc: Ben Jacoby/HOU/ECT@ECT
Subject: Meeting to Discuss 501D5A Status
Please attend a meeting at 1:00 PM on Wednesday, 17 January 2001 in EB3143c
to discuss the latest status of the Westinghouse 501D5A Generator set.
Please let me know ASAP if you are unable to attend.
Thanks,
Chris Booth | {
"pile_set_name": "Enron Emails"
} |
Although I don't yet have all the facts, Steve Hall said that late yesterday
(Friday) afternoon, the Governor exercised eminent domain over the IOU
forward contracts that the PX had been in the process of auctioning to pay PX
participants. I would like Bracewell to research at least the following two
possible ways this action is unlawful. First, this violates the banking
provisions of the PX tariff (Section 6). These provisions requires the PX to
hold all PX accounts in trust for PX participants. Second, these are
wholesale contracts and the State only has the right to exercise eminent
domain concerning retail service. I don't have any law to support the second
idea but think it should be researched nonetheless. | {
"pile_set_name": "Enron Emails"
} |
Note: Let me know if you want the certificate filing on this. Lorna
Williams Files Evergreen Expansion Project
SALT LAKE CITY -- A unit of Williams (NYSE: WMB) announced today that it has filed an application with the Federal Energy Regulatory Commission (FERC) to construct and operate the Evergreen Expansion Project in the state of Washington. The proposed $240 million project is designed to expand Williams' existing Northwest Pipeline system from Sumas to Chehalis, Wash., (Sumas-Chehalis Corridor) to meet the demands of new electric generation facilities and to provide additional capacity in the Plymouth to Washougal, Wash., corridor (Columbia River Gorge Corridor) for existing firm shippers.
The Evergreen Expansion Project will add 67,000 additional horsepower at five compressor stations and four sections of new pipeline loops, totaling 28 miles, in the Sumas-Chehalis Corridor. The new pipeline segments will generally be placed in existing right of way, parallel to Northwest's natural gas transmission system. To increase north flow capacity for existing firm shippers, 24,000 additional horsepower will also be installed at five compressor stations located within the Columbia River Gorge Corridor.
"The additional 276,000 dekatherms per day of natural gas delivered by the Evergreen Expansion Project for the Sumas-Chehalis Corridor will supply the fuel needed for five new power plants in the state of Washington," said Greg Snow, project manager of business development Williams' Northwest system. "This gas will supply the fuel for power plants to generate 1,900 megawatts of electricity, which can serve approximately two million homes. In addition, the 54,000 dekatherms of additional capacity through the Columbia River Gorge Corridor will reduce existing firm shippers' reliance on displacement capacity."
Pending FERC approval, construction on the Evergreen Expansion Project is scheduled to commence the summer of 2002, with in-service dates of June 2003 for the Sumas-Chehalis Corridor capacity and November 2003 for the additional Columbia River Gorge capacity." With a system that spans the continental United States, Williams' gas pipeline unit is one of the nation's largest-volume transporters of natural gas. The company is based in Houston and has offices in Salt Lake City and Owensboro, Ky. Northwest Pipeline operates a 3,964-mile system delivering Rocky Mountain and Canadian natural gas to markets in Washington, Oregon, Idaho, Wyoming and Colorado. The system has a design capacity of 2.9 billion cubic feet per day.
About Williams (NYSE: WMB)
Williams, through its subsidiaries, connects businesses to energy, delivering innovative, reliable products and services. Williams information is available at <http://www.williams.com>.
Portions of this document may constitute "forward-looking statements" as defined by federal law. Although the company believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Any such statements are made in reliance on the "safe harbor" protections provided under the Private Securities Reform Act of 1995. Additional information about issues that could lead to material changes in performance is contained in the company's annual reports filed with the Securities and Exchange Commission.
Contact Information:
Danielle Clyde (801) 584-6515 [email protected] <mailto:[email protected]> | {
"pile_set_name": "Enron Emails"
} |
Lets discuss when you become available.
Ed x5-7712 | {
"pile_set_name": "Enron Emails"
} |
To all,
Everyone should have received an email this morning from Catherine
McKalip-Thompson outlining relevant stakeholder entities for each Enron
business unit. In addition, the attached third document identifies the logic
used by different companies to align themselves with various principles.
Please read these before the meeting. I am also assuming that everyone has
read the packet that contained the various articles defining existing
principles established.
Based on that preparation, I would like the agenda of the meeting to be as
follows :
I. Key Stakeholder Groups
- Have all relevant stakeholder groups been identified?
- Should some groups be deleted?
II. Environics Role
- Will take our stakeholder groups and identify relevant entities to
represent those categories
- Set up meeting to discuss sample questions
- Catherine attached the Environics Stakeholder Perception Survey
III. Principles / Codes of Conduct
- Identify Favorites
-Discuss Weaknesses of Most Popular Choice
- Discuss Notes from GEMI Session
Thank you for your time. If you wish to contact me prior to the meeting,
please reach me at 713-853-1931.
Regards,
Jean Mrha | {
"pile_set_name": "Enron Emails"
} |
480134
480133
both deals should have a fee of .0275. we pay there fees.
thanks | {
"pile_set_name": "Enron Emails"
} |
Mark, I added Paragraph 3 in Article II to cover any obligations which ECS
incurs for the drive and WT1. Please review and if OK I will forward to
Susan for her review. | {
"pile_set_name": "Enron Emails"
} |
I'm trying to find the original tickets for the following deals with Northern Natural Gas. Can you guys help me with this?
Deal Deal Date
NK7775.1 5/31/2000
EE9092.1 12/16/1997
EE9092.3 12/22/1997
E23290.7 12/16/1997 | {
"pile_set_name": "Enron Emails"
} |
Hi Ladies,
I hope the meeting on Saturday was interesting and informative for you. Ginger was concerned that so many people left at noon when it was supposed to last until 1 pm, but I think we pretty much covered everything.
In the notes I saw that it says "Awards, Yellow Rose Petal, 25 hours over the minimum. This is a new award." I just want to clarify that it is an award that our chapter asked for and is not a nation wide award. If you want to have it, your chapter will have to request it from National.
[email protected] | {
"pile_set_name": "Enron Emails"
} |
Several employees have asked about the exercise policy on stock options.
Specifically, they want to know what the exercise policy is on i) termination
eg as a result of the prc process, ii) voluntary departure, iii) retirement,
or iv)resignation; and to what extent do the rules vary across plans: i)
AESOP, LTIP, deferred bonus etc. The main focus is on the length of time to
exercise. I am concerned that there may be some odd incentives in the
structure -- eg are severed employees allowed more time to exercise than
employees who just leave voluntarily ( ie if you want to have a full three
years to exercise options are you better off becoming a performance issue and
getting severed than you would be if you simply left the company? | {
"pile_set_name": "Enron Emails"
} |
FYI - Not sure if all of you have this information.
C
---------------------- Forwarded by Caroline Emmert/HOU/ECT on 04/02/2001
03:14 PM ---------------------------
Caroline Emmert
09/07/2000 12:22 PM
To: John M Forney/HOU/ECT@ECT
cc: Chris Stokley/HOU/ECT@ECT
Subject: Buy/Resells - What We Learned
John,
From our research into Avista and others, here is what we have learned about
using Buy/Resells:
Whether to select "Buy From" or "Sell To" upon deal entry is determined by
the ultimate purpose of the BR, as shown here:
Purpose:
Pay the Customer (sleeve or other service they have provided to EPMI)
Type is Buy From
Pricing is: Buy = EPMI price
Sell = Customer price
Charge the Customer (services or other, like transmission recapture)
Type is Sell To
Pricing is: Buy = Customer price
Sell = EPMI price
I hope this helps to determine the correct way of entering a buy/resell, and
will alleviate settlement discrepancies in the future. If you agree with
this, feel free to share it with the real time group.
Caroline | {
"pile_set_name": "Enron Emails"
} |
Dear Pool Board: ?Here's a sample of the tickets. ?Sorry if you get a sore
neck from reading them. ??Haven't made any copies yet so can still make
changes. ?Any suggestions? ?I want to hand them out at swim team meeting on
23rd and practices. ?Let me know what you think. ?I went off last years
hours. I checked with Michelle and $5 sounded like a good price. ?Last year
it was $4 but you had to buy a drink separate (which everyone did anyways)
and this year the canned drink will be included. ?Appreciate any input so
can
get these done! ??Thanks, Ann | {
"pile_set_name": "Enron Emails"
} |
The meeting will be at our office in Washington D.C. The address is as
follows:
1775 I Street NW (The cross street is 18th)
Given the agenda I would say that we should plan from 9:00a-3:30p (we will
provide lunch).
Thanks, Ron.
Ron Tapscott
02/22/2000 11:23 AM
To: [email protected], [email protected], [email protected],
[email protected], [email protected]
cc: Stanley Horton/Corp/Enron@Enron, J Mark Metts/NA/Enron@Enron@ECT, Randal
T Maffett/HOU/ECT@ECT, Rod Hayslett/FGT/Enron@ENRON, Dwight
Larson/Corp/Enron@ENRON
Subject:
Gentlemen,
We received the top financials in aggregate form. Thanks.
As a followup to last week's discussions, Please forward to me those who will
be participating from your respective Companies. This will help firm up the
agenda and also give me an idea what conference room arrangements we may need
to make (per Craig's voice mail over the weekend).
I have incorporated comments on next weeks agenda as shown below. Please
forward other comments as needed.
Agenda for the 29th is as follows (and in order of appearance):
Enron presents synergy, growth and financial opportunities (including impact
on earnings and market value)
pipes to pipes
pipes to wires
Alliance presents synergy, growth and financial opportunities (will include a
discussion regarding the area where savings and growth will occur but will
not identify the impact on earnings and market value)
wires to wires
Outline Joint Venture Structural Form. We would like to discuss in detail
and will provide a handout at the meeting. The discussion will include:
type and timing of contribution (stock or asset)
governance
type of ownership (passive and active)
Valuation (this will require participation from Financial or Corporate
Development areas of your respective organizations)
Agree on Process
Agree on Method
Timing
Participants from Enron will be --
Stan Horton (Chairman & CEO of GPG)
Mark Metts (Exec. VP Enron Corp. -- Corporate Development)
Rod Hayslett (Sr. VP of GPG)
Randy Maffett (VP -- ENA)
Dwight Larson (VP -- Corporate Development)
Ron Tapscott (Director -- ENA)
Thanks, Ron. | {
"pile_set_name": "Enron Emails"
} |
FYI
---------------------- Forwarded by Susan Scott/ET&S/Enron on 11/30/2000
09:43 AM ---------------------------
"Angeles, Zenee G. - TPZGA" <[email protected]> on 11/29/2000 04:34:14 PM
To: "Alexander, Michael@sce" <[email protected]>, "Amirault, Paul@AEC"
<[email protected]>, "Bayless, David@Utility" <[email protected]>,
"Beach, Thomas@Crossborder" <[email protected]>, "Burkholder,
John@cts/whb" <[email protected]>, "Chancellor, Craig@Calpine"
<[email protected]>, "Counihan, Rick@Green Mountain"
<[email protected]>, "Dasovich, Jeff@Enron"
<[email protected]>, "Day, Michael@GMSSR" <[email protected]>, "Dingwall,
Brian@UEM" <[email protected]>, "Elsesser, Evelyn@aelaw"
<[email protected]>, "Johnson, Pamela@REMAC" <[email protected]>, "Jun,
Christine@aelaw" <[email protected]>, "Karp, Joseph@Whitecase"
<[email protected]>, "Keeler, Paul@BR" <[email protected]>, "Leslie,
John@Luce" <[email protected]>, "McCrea, Keith@CIG/CM" <[email protected]>,
"Paul, Joe@Dynegy" <[email protected]>, "Pocta, Mark@ORA"
<[email protected]>, "Porter, Doug@SCE" <[email protected]>, "Rochman,
Michael@CUB" <[email protected]>, "Rochman, Michael@SPURR"
<[email protected]>, "Scott, Susan@TW" <[email protected]>, "Worster,
Gerard@TXU" <[email protected]>, "Zaiontz, Jean@BP" <[email protected]>
cc: "Suwara, J.- TPJUS" <[email protected]>, "Wright, Gillian - TP1GXW"
<[email protected]>, "Sullivan, Glen J." <[email protected]>
Subject: GIR PD
The GIR meeting to discuss the proposed decision issued on November 21 is
scheduled for Monday, December 4, in Room 2A of The Gas Company Tower at 555
West Fifth Street, in Los Angeles.
The following is the Conference Line information for those who are unable to
attend in person:
??????? Dial In No. 1-877-676-6548
??????? Confirmation code 4455426 (please follow prompts)
Parking validations at the GCT building will be available and lunch is
provided.
To assist us in planning, please RSVP to Zenee Angeles via e-mail
([email protected]) or via phone (213/244-3831) on your attendance.
Thank you. | {
"pile_set_name": "Enron Emails"
} |
EOL Deals From: 9/1/2001 To: 9/6/2001 EnPower From: 9/1/2001 To: 9/6/2001
Desk Total Deals Total MWH Desk Total Deals Total MWH
EPMI Long Term California 70 1,872,800 EPMI Long Term California 8 310,200
EPMI Long Term Northwest 72 1,480,200 EPMI Long Term Northwest 68 3,387,118
EPMI Long Term Southwest 115 2,235,630 EPMI Long Term Southwest 70 8,241,120
EPMI Short Term California 470 483,488 EPMI Short Term California 118 359,855
EPMI Short Term Northwest 223 188,000 EPMI Short Term Northwest 69 77,820
EPMI Short Term Southwest 374 467,200 EPMI Short Term Southwest 166 653,350
Real Time (as of 3:30pm, 09/04/01) 217 5,425 Real Time (as of 3:30pm, 09/04/01) 123 11,850
Grand Total 1,541 6,732,743 Grand Total 622 13,041,313
EOL Deals From: 09/06/2001 To: 09/06/2001 EnPower From: 09/06/2001 To: 09/06/2001
Desk Total Deals Total MWH Desk Total Deals Total MWH
EPMI Long Term California 17 302,800 EPMI Long Term California 1 123,200
EPMI Long Term Northwest 26 490,600 EPMI Long Term Northwest 35 2,869,777
EPMI Long Term Southwest 29 559,275 EPMI Long Term Southwest 19 3,600,479
EPMI Short Term California 125 165,616 EPMI Short Term California 35 172,704
EPMI Short Term Northwest 102 108,000 EPMI Short Term Northwest 31 23,739
EPMI Short Term Southwest 142 214,400 EPMI Short Term Southwest 59 266,168
Real Time (as of 3:30pm, 09/04/01) 67 1,675 Real Time (as of 3:30pm, 09/04/01) 42 3,466
Grand Total 508 1,842,366 Grand Total 222 7,059,533
ICE Volumes From: 09/06/2001 To: 09/06/2001
Delivery Point Total MWH EPMI MWH Price
Cob (P, Next Day) 800 0 $ 28.00
Cob (OP, Next Day) 400 400 $ 22.25
Mid C (OP, Next Day) 800 0 $ 22.00
Mid C (P, Next Day) 1,600 0 $ 27.88
Mid C (P, Oct-01) 97,200 0 $ 31.08
Mid C (P, Dec-01) 20,000 0 $ 40.50
Mid C (P, Apr-02) 10,400 10,400 $ 30.00
Mid C (P, Jun-02) 10,000 10,000 $ 29.00
NP-15 (OP, Next Day) 1,200 400 $ 23.33
NP-15 (P, Next Day) 2,400 2,400 $ 29.33
NP-15 (OP, Oct-01) 7,825 0 $ 24.00
NP-15 (P, Oct-01) 10,800 0 $ 32.25
NP-15 (P, Dec-01) 10,000 10,000 $ 38.50
Palo (OP, Next Day) 1,200 400 $ 20.57
Palo (P, Next Day) 8,000 0 $ 31.64
Palo (P, Next Week) 4,800 0 $ 32.80
Palo (P, Bal Month) 50,400 14,400 $ 32.35
Palo (P, Oct-01) 5,400 21,600 $ 32.02
Palo (P, Cal-02) 122,800 0 $ 39.00
Palo (P, Q1 02) 23,600 0 $ 22.75
Palo (P, Q3 03) 30,800 0 $ 52.00
SP-15 (OP, Next Day) 1,600 1,200 $ 20.38
SP-15 (P, Next Day) 5,600 0 $ 29.12
SP-15 (OP, Bal Month) 12,000 6,000 $ 22.00
SP-15 (P, Bal Month) 7,200 0 $ 30.00
SP-15 (P, Q2 02) 61,600 0 $ 35.13
SP-15 (P, Q1 03) 30,400 0 $ 35.50
Grand Total 538,825 77,200 $ 813.38 | {
"pile_set_name": "Enron Emails"
} |
This is what I sent to FPLE. | {
"pile_set_name": "Enron Emails"
} |
For your information. If you have any questions, let me know...
---------------------- Forwarded by Susan Scott/ET&S/Enron on 09/21/2000
05:03 PM ---------------------------
Janet Butler
09/21/2000 04:50 PM
To: Susan Scott/ET&S/Enron@ENRON
cc: Shelley Corman/ET&S/Enron@Enron
Subject: Summary of Protestors to TW's filing
Attached is summary of protestor comments to TW's Order 637 compliance
filing. It will be attached to the Weekly Report as well. | {
"pile_set_name": "Enron Emails"
} |
Tana please resend the version to be executed - i take it from your note
below that the version attached to leslies mail to you is not the right
version, tks Denis
From: Tana Jones on 12/12/2000 08:54 CST
To: Denis O'Connell/LON/ECT@ECT
cc:
Subject: RE: NDA with Enron revised.DOC
Per the email below, this has been approved. I had to revise the attached
copy to fix the header and page break, so use the copy I sent you. Thanks
for your help!
----- Forwarded by Tana Jones/HOU/ECT on 12/12/2000 08:57 AM -----
Leslie Hansen
12/11/2000 01:10 PM
To: Tana Jones/HOU/ECT@ECT
cc:
Subject: RE: NDA with Enron revised.DOC
Tana:
Please finalize the attached NDA so that we can send to the UK for execution
as soon as possible. When we've received an executed copy, we can send to
Robert Harris at the number set forth below. (If you have a better process
in place, go for it.) We just need to make sure we have a final signed NDA
by the end of tomorrow in preparation for a Wed. morning meeting in NY.
When we have received an executed copy from Credit 2B, please be sure to let
David Dupre know.
Thanks,
Leslie
----- Forwarded by Leslie Hansen/HOU/ECT on 12/11/2000 01:08 PM -----
[email protected]
12/11/2000 12:43 PM
To: [email protected], [email protected]
cc: [email protected]
Subject: RE: NDA with Enron revised.DOC
These changes work for me - both Leslie's and Mike's.
?
Leslie, if the final version works for you please start the processing.?
Mike will be out of pocket on a conference call between 2 and 5 today.
?
the signor on my end will be Rich Dunn, COO.
?
Have your executed version faxed to my attention at 212-984-9111 and i will
have Rich execute and get it back to you.
?
thanks? --? robert
?
-----Original Message-----
From: Hammond Jr., Michael P. [mailto:[email protected]]
Sent: Monday, December 11, 2000 1:33 PM
To: '[email protected]'
Cc: [email protected]
Subject: NDA with Enron revised.DOC
Importance: High
Leslie,
Thanks for your quick turnaround on this.? I have made a few clarifying
comments to the draft you sent earlier.?? You will note that my comments are
in blue.? I am sending these revisions to you and to Robert Harris
simultaneously in order to expedite this matter.? Accordingly, my changes
are subject to his review and comments.
Michael Hammond
********************************
Michael P. Hammond, Jr.
Day, Berry & Howard, LLP
Cityplace I
Hartford, CT 06103-3499
phone: (860)275-0550
fax: (860)275-0343
email: [email protected]
********************************
This message contains PRIVILEGED AND CONFIDENTIAL INFORMATION intended
solely for the use of the addressee(s) named above.? Any disclosure,
distribution, copying or use of the information by others is strictly
prohibited.? If you have received this message in error, please advise the
sender by immediate reply and delete the original message.? Thank you.
? | {
"pile_set_name": "Enron Emails"
} |
It has become customary to prepare Unanimous Consents of Directors for many
transactions even if such actions are not required by the relevant By-laws
and/or Certificate of Incorporation. Please consider carefully whether
Unanimous Consents of Directors are necessary or appropriate in a particular
transaction, i.e., the transaction is a significant transaction or evidence
of authority is required for a legal opinion. When in doubt, please review
the By-laws and Certificate of Incorporation of the relevant entity and
discuss the matter with a member of the Office of the General Counsel.
Thank you. | {
"pile_set_name": "Enron Emails"
} |
Hennegan's office will be seeking to depose Brian Barth as well as Kevin
McConville.? They feel they have to depose Brian and Kevin, because they fear
that ECT Securities will file a motion for summary judgment and they are
looking for testimony to use in opposition.
This e-mail message may contain legally privileged and/or confidential
information. If you are not the intended recipient(s), or the employee
or agent responsible for delivery of this message to the intended
recipient(s), you are hereby notified that any dissemination,
distribution or copying of this e-mail message is strictly prohibited.
If you have received this message in error, please immediately notify
the sender and delete this e-mail message from your computer. | {
"pile_set_name": "Enron Emails"
} |
The information contained herein is based on sources that we believe to be
reliable, but we do not represent that it is accurate or complete. Nothing
contained herein should be considered as an offer to sell or a solicitation
of an offer to buy any financial instruments discussed herein. Any
opinions expressed herein are solely those of the author. As such, they
may differ in material respects from those of, or expressed or published by
on behalf of Carr Futures or its officers, directors, employees or
affiliates. ? 2001 Carr Futures
The charts are now available on the web by clicking on the hot link(s)
contained in this email. If for any reason you are unable to receive the
charts via the web, please contact me via email and I will email the charts
to you as attachments.
Distillate http://www.carrfut.com/research/Energy1/hoil11.pdf
Unleaded http://www.carrfut.com/research/Energy1/unlded11.pdf | {
"pile_set_name": "Enron Emails"
} |
Please join Mark Fischer, Tom Alonso, and Elliot Mainzer for a bag lunch on
Monday, 2/12 at 12:00 pm in Mt Hood to learn more about available
opportunities on the floor.
If you have any questions, please let me know.
Thanks!
Amy | {
"pile_set_name": "Enron Emails"
} |
Please advise PG&E and Aquila that we will not address the questions below
until Phase 2. Thanks.
----- Forwarded by Ron Coker/Corp/Enron on 09/26/2000 04:06 PM -----
Benjamin Rogers@ECT
09/26/2000 03:53 PM
To: Ron Coker/Corp/Enron@Enron
cc:
Subject: Additional PG&E Question and an Aquila Question - all on Pastoria
---------------------- Forwarded by Benjamin Rogers/HOU/ECT on 09/26/2000
05:53 PM ---------------------------
"Iaconetti, Louis" <[email protected]> on 09/26/2000 05:51:29 PM
To: "Don Miller (E-mail)" <[email protected]>, "'Benjamin Rogers'"
<[email protected]>
cc: "Bartlett, James" <[email protected]>, "Al-Farisi, Omar"
<[email protected]>, "Heckler, James" <[email protected]>, "Modi,
Rishi" <[email protected]>
Subject: Additional PG&E Question and an Aquila Question - all on Pastoria
I spoke to Aquila again today. They are planning to submit bids on Friday
for Gleason, Wheatland and Pastoria. They already have a tolling agreement
in the Lincoln area and don't want more capacity there.
Aquila's question:
They questioned the development costs for Pastoria - look very high. I
noted that it includes the ERC's. They would like a breakout of the
development costs
PG&E's question is below. Are you comfortable disclosing this at this stage
or is this a phase II due diligence item?
-----Original Message-----
From: Favinger, Thomas [mailto:[email protected]]
Sent: Tuesday, September 26, 2000 5:17 PM
To: 'Iaconetti, Louis'
Subject: RE: Responses to PG&E Questions on Pastoria
Since we do not have to accept the NEPCO contract, can you break out the
cost and scope of equipment (Enron uses the term "power islands")? Can we
get this information tomorrow? Both cost and scope of this is important to
be able to assess the "EPC" price and determine bid price. | {
"pile_set_name": "Enron Emails"
} |
Paul - could you help, please?
Thanks
Paul
-----Original Message-----
From: Bailey, Susan
Sent: 05 February 2002 22:14
To: Simons, Paul
Subject: Royal Bank of Canada
Paul,
I need your help -- please furnish an executed version of the ISDA Master Agreement dated effective August 16, 2000, between Enron Credit Limited and Royal Bank of Canada.
We are trying to work through some matters and a copy of this ISDA is essential.
An electronic version if available would be great.
Thanks again.
Cordially,
Susan S. Bailey
Enron North America Corp.
1400 Smith Street, Suite 3803A
Houston, Texas 77002
Phone: (713) 853-4737
Fax: (713) 646-3490
Email: [email protected] | {
"pile_set_name": "Enron Emails"
} |
I put your August Tri-Met pass in your mail slot. | {
"pile_set_name": "Enron Emails"
} |
Return Receipt
Your Weather Trade Option Rep
document:
was received Margaret M Lester/NGCCorp
by:
at: 04:28:03 PM Today | {
"pile_set_name": "Enron Emails"
} |
Phillip - the bankruptcy books that you requested this morning have been set up in RisktRAC and ERMS. I have given the East, Central, West, Texas and Financial desks access to these books. Keep in mind that these books have not been placed in the RisktRAC hierarchy. Please advise as to where they need to be placed.
Thank you,
Susan Trevino
x3-1462 | {
"pile_set_name": "Enron Emails"
} |
Steve and Rick,
I am very happy to inform you that I just received a call from Salvador
Beltran. (Salvador is a lawyer who earned an LL.M. at Harvard when I was
earning mine at B.U. we know each other since 1988)
Salvador is a PAN Member of Congress that is finishing his term, nevertheless
he is part of the close advisory team for Mr. Fox. Salvador let me know that
one of the priority subjects discussed between Mr. Fox and President Zedillo
was electricity reform and this subject is on tops agenda.
Just yesterday Mr. Fox designated his economic policy advisory team and
Salvador is part of it. He told me that in their first meeting with the
elected president they discussed electric reform as one of the main subjects,
he also let me know that he might be put in charge of the task force in
charge of working out the details of the reform.
I offered 100% of my time to the effort and told him that I was available
everyday at any hour until this comes to fruition. He invited me to
participate in the effort and told me that in the next 10 days he would
contact me in order to start working. I offered him the full support of
Enron in this effort.
He agreed with me that there is going to be an important window of
opportunity in the Congressional sessions that will take place from September
to December of this year and that we have to work hard in order to present a
proposal that is agreed upon by all of the political actors.
Next Friday, July 14th, I am having a meeting with Geronimo Gutierrez who
heads the PAN think tank in Congress. I worked together with Geronimo last
year when I helped them draft their counterproposal to the President's
initiative. I will offer him to work with him on this subject.
This time I am very optimistic. Let's see what happens. I'll keep you
posted.
Best,
Ricardo | {
"pile_set_name": "Enron Emails"
} |
Fine. If the dates are always going to be stated in the short description it
would make sense to add "short" between "product" and "description", unless
this causes a problem. Thanks, Edmund,
Awais Omar
03/17/2000 01:27 PM
To: Edmund Cooper/LON/ECT@ECT
cc:
Subject: Re: Tokenized Reference periods
Edmund, originated from Mark Taylor and Dave Forster wanted to use the same
phrase fro all tokenised periods. Mark said this should be OK. The short
Description ont he Quotes page will show the product name together with the
period for the trsnacation. The dates will change automatically each day
based on a rule set defiened within the databse for that product. Thus int
he long description we refer the period to the dates shown in the short
description.
Awais
Edmund Cooper
03/17/2000 09:14 AM
To: Awais Omar/LON/ECT@ECT
cc: Mark Dilworth/LON/ECT@ECT, Enron London - EOL Product Control
Group/LON/ECT@ECT, Justin Boyd/LON/ECT@ECT
Subject: Re: Tokenized Reference periods
Awais,
Can you let me know the genesis of the phrase (in blue in Anna's email).
If we are going to go with this rather than what I had come up with intially
for the gas products I'd prefer if we said:
"The term of the Transaction shall correspond to the date(s) set forth in the
product short description on the website."
Thanks, Edmund
Anna Gardiner
03/17/2000 08:24 AM
To: Edmund Cooper/LON/ECT@ECT
cc: Mark Dilworth/LON/ECT@ECT, Awais Omar/LON/ECT@ECT, Enron London - EOL
Product Control Group/LON/ECT@ECT
Subject: Re: Tokenized Reference periods
Edmund,
On the basis of the Gas periods supplied below, does this mean that you do or
do not agree with the changes to the Term of the Transaction text (in blue)?
Please let me know before I go ahead and ask the traders to start drafting
products.
"The term of the Transaction shall correspond to the date(s) set forth in the
Product description on the website"
Thanks
Anna
Edmund Cooper
16/03/2000 18:41
To: Anna Gardiner/LON/ECT@ECT
cc:
Subject: Re: Tokenized Reference periods
Here was what I had come up with
Anna Gardiner
03/16/2000 06:38 PM
To: Edmund Cooper/LON/ECT@ECT
cc: Awais Omar/LON/ECT@ECT, Mark Dilworth/LON/ECT@ECT, Enron London - EOL
Product Control Group/LON/ECT@ECT, Dale Neuner/HOU/ECT@ECT
Subject: Re: Tokenized Reference periods
Edmund
Please can you confirm that this complex description for Weekend UK Nat Gas
is correct.
"The term of the Transaction shall correspond to the date(s) set forth in the
Product description on the website. The Supply Period shall be for the gas
Days commencing on the Saturday and Sunday following the trade date and any
Friday and/or Monday, adjoining such Saturday and Sunday, which is not a
Banking Day."
As you will see from my emails below, I am trying to establish whether supply
period information should still appear in the descriptions for UK and Cont
Gas. I have spoken to Jonathan Whitehead and he has said that he is happy as
long as legal has approved the descriptions.
I would appreciate it if you could let me know as soon as possible that this
info is correct. I will then be able to go ahead and inform all traders that
they can set up their tokenised products.
Many thanks
Anna
---------------------- Forwarded by Anna Gardiner/LON/ECT on 16/03/2000 18:28
---------------------------
Anna Gardiner
15/03/2000 17:39
To: Awais Omar/LON/ECT@ECT
cc: Mark Dilworth/LON/ECT@ECT, Enron London - EOL Product Control
Group/LON/ECT@ECT, Dale Neuner/HOU/ECT@ECT
Subject: Re: Tokenized Reference periods
Awais,
I have now made your requested changes in complex descriptions. As mentioned
in email below, I was not sure whether you wanted to remove the supply period
information for UK and Cont Gas. Mark suggested that I speak to Jonathan
Whitehead to confirm that this information be left in the complex
description. Jonathan has said that he thinks that it should be there as
long as legal have approved it.
If the supply period text should be removed, please let me know and I will
remove it. Once this has been confirmed, do you then want me to go ahead and
inform the traders that they can now start setting up their products with
tokenised periods?
Many thanks
Anna
---------------------- Forwarded by Anna Gardiner/LON/ECT on 15/03/2000 17:29
---------------------------
Anna Gardiner
15/03/2000 13:08
To: Mark Dilworth/LON/ECT@ECT
cc: Enron London - EOL Product Control Group/LON/ECT@ECT, Awais
Omar/LON/ECT@ECT, Dale Neuner/HOU/ECT@ECT
Subject: Re: Tokenized Reference periods
I have made the relevant changes in complex descriptions. Before I go ahead
and inform the traders that they can set up their products for DA, BoM etc,
could you take a look at the descriptions for UK Gas and Belgian Gas. I have
inserted the relevant term of transaction info ("The term of the Transaction
shall correspond to the date(s) set forth in the Product description on the
website") but have not taken out the information on Supply periods (The
Supply Period shall be for the gas Days commencing on the Saturday and Sunday
following the trade date and any Friday and/or Monday, adjoining such
Saturday and Sunday, which is not a Banking Day.). Does this info need to be
deleted, or should it remain in all complex descriptions for UK and Cont Gas?
Let me know and I will amend if necessary. All other descriptions should now
read as per Awais's email.
Thanks
Anna
---------------------- Forwarded by Anna Gardiner/LON/ECT on 15/03/2000 12:53
---------------------------
Amita Gosalia
14/03/2000 15:29
To: Mark Dilworth/LON/ECT@ECT
cc: Enron London - EOL Product Control Group/LON/ECT@ECT, Awais
Omar/LON/ECT@ECT, Dale Neuner/HOU/ECT@ECT
Subject: Re: Tokenized Reference periods
Hi Mark
Lara and Anna will be on the case.
Rgds
A
Mark Dilworth
14/03/2000 09:22
To: Amita Gosalia/LON/ECT@ECT
cc: Enron London - EOL Product Control Group/LON/ECT@ECT, Awais
Omar/LON/ECT@ECT, Dale Neuner/HOU/ECT@ECT
Subject: Re: Tokenized Reference periods
amita
have you anyone who can look after this while arfie's away?
if not i can....(and I can help in any case)
F. A. B.
m
---------------------- Forwarded by Mark Dilworth/LON/ECT on 03/14/2000 09:20
AM ---------------------------
Arfan Aziz 03/14/2000 12:36 AM
To: Awais Omar/LON/ECT@ECT
cc: Mark Dilworth/LON/ECT@ECT, Dale Neuner/HOU/ECT@ECT, Enron London - EOL
Product Control Group/LON/ECT@ECT
Subject: Re: Tokenized Reference periods
Awais
I can confirm that the gas products all have the following phrase at the
beginning of the complex long description:
"The term of the Transaction shall be from the Effective Date to the
Termination Date (as stated in the Short Description). "
This has already been added - do you want it amended to ready the one you
specified below ??
Also it is not clear from your email below but can you comfirm that the Power
products do not require this description ?
In addition, I dont think I should be adding products for any of the traders
- they should be doing this themselves ! Also as I am in Sydney for the next
few weeks I wont get anytime when I am in the same time zone as them - could
you talk to them directly or email them as any responses from them to me will
be delayed by a day !
Thanks
Arfan
Awais Omar
10/03/2000 23:51
To: Jay Webb/HOU/ECT@ECT, Dale Neuner/HOU/ECT@ECT, Jennifer deBoisblanc
Denny/HOU/ECT@ECT, Arfan Aziz/LON/ECT@ECT
cc: David Forster/HOU/ECT@ECT, Mark Dilworth/LON/ECT@ECT
Subject: Tokenized Reference periods
Jay,
Below is Latest Rule set for the tokenised reference periods. If this is in
the correct format might be easier just to upload this in full into
production. The new ones are coloured in yellow in the spreadsheet.
I n additon could you please also upload the rules for (i) Day Ahead Can Nat
Gas (Sumas/Hunt/S2) and (ii) BoM Can Nat GAs (Sumas/Hunt/S2) into Test as
well. I have created two products 4293 and 4294 in test. So once the rules
have been inserted can you please also run the relevant part of the scheduler
to convert the abbreviationot date so that Jennifer can then test bridging of
these Canadian products.
Dale, Arfan
Can you please check the comples description for each of the tokenised
peirods listed in the spreadsheet above reads:
"The term of the Transaction shall correspond to the date(s) set forth in the
Product description on the website."
We have decided that it would be easier for consistency to have this in all
descriptions. For the Power ones I believe the time or loadshape is
referenced in another part of the description and so does not need to be
referenced here, e.g. in Uk power ones says fro 11 p.m. on trade day to 11
p.m. ont he following day for Day Ahead.
You need to both then ask, unless you already know, what products traders
want as tokenised and set these up for them. They can then start using the
new tokenised products the day after they have been set up as the scheduler
needs to run overnight to convert the tokenised abbreviation to the correct
dates.
Dale,
Can you please let Patrice Thurston and Kevin Ruscittit that their product
9877, the one I set up as the Balance of Month, shoudl be OK to use now as
Jennifer's bridge testing was successful for US Gas and US Power.
The only thing missing is teh treatment for Holidays for Canadian Gas, I have
sent an email to Grant Oh, tel 403 977 6778 in Calgary, requesting this
info. Once you have please put this into same format as in the above
spreadsheet in sheet labelled "Specific Rules" and give to Jay to Upload.
Jennifer,
Please follow up with Jay when therules for Canada Gas have been inserted
into Test database and also when the correct dates are shown for the products
4293 and 4294 you can then do bridge testing for Canada Gas.
Thurderbirds are go!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Awais | {
"pile_set_name": "Enron Emails"
} |
Please print.
---------------------- Forwarded by Kay Mann/Corp/Enron on 12/22/2000 10:35
AM ---------------------------
"Parker, Kathy" <[email protected]> on 12/22/2000 10:22:40 AM
To: "'[email protected]'" <[email protected]>
cc: "Campbell, Carolyn" <[email protected]>
Subject:
Per Carolyn Campbell's request.
<<2R6LRED.DOC>> <<2RM3RED.DOC>> <<2RLSRED.DOC>> <<2R6KRED.DOC>>
<<2RSWRED.DOC>>
Enclosures: 128541 - RED v. 16/15
129099 - RED v. 7/6
129088 - RED v. 8/7
128540 - RED v. 12/11
129344 - RED v. 3/2
Kathy L. Parker
King & Spalding
1100 Louisiana, Suite 3300
Houston, Texas 77002
713/276-7436
713.751.3290
[email protected]
Confidentiality Notice
This message is being sent by or on behalf of a lawyer. It is intended
exclusively for the individual or entity to which it is addressed. This
communication may contain information that is proprietary, privileged or
confidential or otherwise legally exempt from disclosure. If you are not the
named addressee, you are not authorized to read, print, retain, copy or
disseminate this message or any part of it. If you have received this
message in error, please notify the sender immediately by e-mail and delete
all copies of the message. | {
"pile_set_name": "Enron Emails"
} |
EX0696.1
N34809.1
N34810.1
N34809.2
N86915.2
NB4301.1
ND8137.1
NE0392.1
NG5943.2
NG5945.2
NH4631.1
NI1685.1
NI8080.1
Ni8037.2
NJ7458.3
NJ7458.4
N69139.1
NH8907.1
NO6546.1
NO6546.2 | {
"pile_set_name": "Enron Emails"
} |
I have made a number of edits of the presentation today. There are many more
to go. I think that we can get it shaped up by Friday. It will require a
lot of coordination to shape it up by Thursday. In the event that it can't
be whipped into shape by Thursday, I think that we need to boil it down to a
few themes that we present at the group meeting. We then can finish the
presentation and get it to FERC Friday AM before the call. Who is making the
final call on this? How are we going to coordinate?
Enron Capital & Trade Resources Corp.
From: Ellen Wolfe <[email protected]> 08/23/2000
02:29 PM
Please respond to [email protected]
To: James D Steffes <[email protected]>
cc: Mary Hain <[email protected]>, Joe Hartsoe <[email protected]>,
Sarah Novosel <[email protected]>, Jeff Dasovich
<[email protected]>, Paul Kaufman <[email protected]>, Tim Belden
<[email protected]>, Susan J Mara <[email protected]>
Subject: Re: Edited Draft of FERC Presentation
Jim and others,
I think we are suffering from not enough time to fully iterate this, as well
as little information on what
others are going present.
The basic messages as I see them (and not having trued this up with Mary or
others) are:
1. The markets are working consistent with physics and economics; demand is
up, supplies are down and higher
prices are resulting.
2. Characteristics of the retail markets have resulted in risks being passed
to end users. Are such issues
impeding wholesale markets? If so, perhaps FERC can influence movement in
this area.
3. We shouldn't equate outcomes at the retail level with bad structure at
wholesale level. The key is to
distinguish the retail issues so that FERC can focus on the wholesale issues.
4. Any remaining concerns should be studied further rather than simply
receiving blame for the outcomes we've
seen: Whether there is market power? Whether rather it's a matter of
scarcity rents? What are appropriate
scarcity rents? Is monopsony power on the buyers' side (utilities) causing
undesirable economic and reliability
outcomes. (And out of this should be consideration of whether an
across-the-board $250 cap is the right one,
especially given that the ISO staff itself recognizes that this is a poor
proxy for what buyers are willing to
pay as scarcity rents.)
That's my 2 cents. I don't know what Mary's additional thoughts are, nor how
what other parties will say may
affect what we should emphasize.
Certainly, though, your feedback is invaluable. If you reply with feedback
I'll do what I can to see that
Enron's message reflects your preferences.
Regards,
Ellen.
James D Steffes wrote:
> Mary & Joe --
>
> Given the time frame for our response (2 - 4 minutes), we need to prepare
not
> only our "leave behind" but also our "oral message".
>
> I want to make sure that everyone agrees with the theme and content of our
> verbal discussions. Can you please put out an outline of the message and
> details and then make sure the Trading desk and CA Govt Affairs agree with
the
> form and delivery (set up a conference call if necessary)?
>
> This is a very complicated issue and very short time frame to deliver. The
more
> we prepare I think the better we'll do.
>
> Thanks,
>
> Jim
>
> ------------------------------------------------------------------------
> Name: August 24 presentation
to FERC1.ppt
> August 24 presentation to FERC1.ppt Type: Microsoft PowerPoint
Show (application/vnd.ms-powerpoint)
> Encoding: base64
> Description: Microsoft PowerPoint 97
- ellen.vcf | {
"pile_set_name": "Enron Emails"
} |
Here is a draft of our GISB. Our Special Provisions are on the last page.
Debra Perlingiere
Enron North America Corp.
Legal Department
1400 Smith Street, EB 3885
Houston, Texas 77002
[email protected]
Phone 713-853-7658
Fax 713-646-3490 | {
"pile_set_name": "Enron Emails"
} |
The information contained herein is based on sources that we believe to be
reliable, but we do not represent that it is accurate or complete. Nothing
contained herein should be considered as an offer to sell or a solicitation
of an offer to buy any financial instruments discussed herein. Any
opinions expressed herein are solely those of the author. As such, they
may differ in material respects from those of, or expressed or published by
on behalf of Carr Futures or its officers, directors, employees or
affiliates. , 2001 Carr Futures
The charts are now available on the web by clicking on the hot link(s)
contained in this email. If for any reason you are unable to receive the
charts via the web, please contact me via email and I will email the charts
to you as attachments.
Crude Spread http://www.carrfut.com/research/Energy1/crudespread25.pdf
Heat Spread http://www.carrfut.com/research/Energy1/heatspread25.pdf
Unleaded Spread
http://www.carrfut.com/research/Energy1/unleadspread25.pdf
Heat Crack http://www.carrfut.com/research/Energy1/heatcrack25.pdf
Gas Crack http://www.carrfut.com/research/Energy1/gascrack25.pdf
Carr Futures
150 S. Wacker Dr., Suite 1500
Chicago, IL 60606 USA
Tel: 312-368-6149
Fax: 312-368-2281
[email protected]
http://www.carrfut.com | {
"pile_set_name": "Enron Emails"
} |
Here is the suggested general format for soliciting bids from shippers by
phone for the Red Rock expansion. Drew and Mary Kay have discussed this and
have given the go-ahead to start calling.
- Bids will be accepted until 5:00, March 2
- Guidelines for bids that meet the threshold for making our project
economic are [describe the three "menu" alternatives -- $0.60 at 5 years, etc
.]
- Bids will be evaluated based on highest rate.
- Shippers should indicate whether they would be willing to have their bid
capacity prorated in case an allocation is necessary.
- Bids should include: 1) service request and 2) offer letter stating
material terms (rate, term, points, quantity). Offer is binding. It can
include a regulatory "out" in case the FERC rejects our filing, but cannot be
"subject to management approval."
The only shippers that will be contacted are those that responded to the Nov.
open season in a timely fashion.
Previously we discussed allocating tie bids pro rata. While we believe this
is acceptable, we would prefer to not announce the tiebreaker methodology so
far in advance. Shippers who inquire should simply be told that any ties
will be broken using a nondiscriminatory method.
Please see me if you have any further questions. (I have to leave about 9
for a doctor's appt. but hopefully will not be out too long.) | {
"pile_set_name": "Enron Emails"
} |
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"pile_set_name": "Enron Emails"
} |
Any interest? I got this resume today from a person I never met. It seems he may
have some relevant skills.
Vince
-----Original Message-----
From: "Frank Bogaert" <[email protected]>@ENRON [mailto:IMCEANOTES-+22Frank+20Bogaert+22+20+3Cfrankb+40cityscope+2Enet+3E+40ENRON@ENRON.com]
Sent: Monday, August 06, 2001 2:20 PM
To: [email protected]
Subject: Today's Conversation
Vince:
It was a pleasure talking with you a few moments ago. As discussed, please find attached my resume in Word. For your convenience, I also copied a plain text version at the bottom of this e-mail.
I would appreciate the opportunity to briefly visit with you at your convenience to learn more about the energy industry and where I should further seek to identify opportunities.
The easiest way to reach me is at 281-531-7990 or by return e-mail.
Thank you!
Frank Bogaert
FRANK M. BOGAERT
14423 Twisted Oak Lane
Houston, Texas 77079
[email protected]
SUMMARY
Business Analysis Manager
* Quantitative analysis and modeling of business economics
* Strategic implications and opportunities
* Hands-on team leader
ACCOMPLISHMENTS
Industry Structure and Forecasting
* Developed a quantitative model predicting long-term natural
gas prices for a major oil company, and later for the
consulting firm's marketing efforts. In the early nineties,
model correctly predicted price increases to oil parity by
around the year 2000.
* Documented the changing structure of the office furniture
industry. Formulated strategy to regain profitable growth.
Financial and Operational Modeling of Asset Deployment Decisions
* Based on the interaction of logistics and manufacturing
economics and market research, developed business strategy
for a leading insulation manufacturer. Early results allowed
maintaining both price and volume in the down cycle of
commodity market.
* Validated strategy of leading automotive aftermarket
manufacturer based on distribution economics. Validated
economic model with top management.
Supply Chain Improvement
* Led the inventory management function through the integration
of a major automotive aftermarket distributor acquisition,
involving consolidation of two warehouse networks and multiple
line changeovers. Reduced inventories by $30 million while
improving fill rates.
* Led the inventory management function in the improvement of
shipping performance, resulting in an additional profit of
$5 million per year.
* Improved the integration of suppliers and other functions in
the overall supply chain.
Process Redesign
* Led client teams through the fundamental redesign of financial
processes, typically identifying cost reduction opportunities
of 20% to 50%.
* Implemented variety of business processes and controls:
production scheduling, financial and cost accounting, sales
and pricing policies, project documentation.
WORK HISTORY
PROFESSIONAL SIGNWORX, Houston, Texas 1997-2001
A manufacturer and erector of custom signage
President
APS, Houston, Texas 1996-1997
A major automotive aftermarket distributor
Senior Director of Supply Chain Management
FEDERAL-MOGUL, Southfield, Michigan 1993-1995
A global automotive parts company
Director of Logistics
THE HACKETT GROUP, Hudson, Ohio 1992-1993
A process re-engineering consulting firm
Senior Consultant
BOOZ-ALLEN & HAMILTON, Cleveland, Ohio 1985-1992
A global management consulting firm
Associate, Senior Associate, Principal
CEGI-TYMSHARE, Paris, France 1980-1982
The French subsidiary of a US time sharing computer company
Applications Software Engineer
MILITARY
Belgian Army, First Grenadiers Regiment, Soest, Germany,
Second Lieutenant, 1982-1983.
EDUCATION
MSIA (MBA), Carnegie-Mellon University, Pittsburgh,
Pennsylvania, 1985
MS-Engineering Degree in Computer Science, Katholieke
Universiteit Leuven, Leuven, Belgium, 1980
Languages: English, Dutch, and French.
- FMBRF.doc | {
"pile_set_name": "Enron Emails"
} |
BUSINESS HIGHLIGHTS
East Power Midwest Origination
Beginning late 2000, East Power Marketing implemented a complete market
coverage strategy. Since then, EPMI has begun to develop relationships with
hundreds of small &mom & pop8 municipalities. Many of these munis had no
prior contact with Enron. As a result, East Power has executed a valuable 30
MW energy call option term purchase from the Municipal Energy Agency of
Nebraska (MEAN) at a congested location.
Enron Industrial Markets
EIM has renamed Pulp, Paper & Lumber to Forest Products in order to fully
encompass our multiple product offerings.
East Power Development
The Planning and Zoning Commission for Pompano Beach, FL approved ENA's
rezoning request and site plan for the Pompano Beach Energy Center, a 510
megawatt peaking power plant. On the rezoning request, the vote was 6 to 1,
and on the site plan, the vote was 7 to 0. The rezoning request will be
forwarded to the Pompano Beach City Commission for their review.
Additionally, the Florida Department of Environmental Protection (DEP) has
announced its intention to issue an air permit for the facility.
Next steps include a DEP public hearing on Monday, March 26, and the first of
two votes on the rezoning request before the Pompano Beach City Commission,
which is scheduled for Tuesday, March 27.
IN THE NEWS
EWS Brown Bag Lunch
Mark Your Lunch Calendars Now! The next one is scheduled for Thursday, March
15, 2001 featuring Ray Bowen. He is the COO of EIM and will be discussing
Enron Industrial Markets.
Open Forum Editorial in The San Francisco Chronicle by Kenneth Lay 3/1/01
What has happened in California over the past four years is not
deregulation. It is misguided regulation.
Deregulation does not mean eliminating customer choice and competition for
most customers.
Deregulation does not mean limiting new market entrants. Fewer than five
percent of customers in California are served by competing suppliers.
Deregulation does not mean creating a single central power pool from which
all participants must buy and sell their wholesale power; the state Power
Exchange effectively replaced three monopoly buyers with one monopoly buyer.
Deregulation does not mean buying all of your commodity at the last minute,
on the spot market, rather than planning ahead and purchasing most of the
power under long-term contracts that lock in prices.
The situation in California is the result of continued regulation,
complicated by a series of natural and man-made factors.
WELCOME
New Hires
EGM - Lowell Bezanis, Owen Zidar
EIM - Eric Holzer, John Ovanessian
ENA - Mecole Brown, Nita Garcia, Ambroshia Hunter, Nikole Jackson, Junichi
Sugiura, Theresa Zucha, Cynthia Gonzalez, Scott Wilson, Kenton Schaefer,
Emily Butler
Transfers
ENA - Joseph Hardy, Nancy Vu, Lloyd Miller, Jinsung Myung, Patrick Johnson,
Jason Wolfe, Andrew Miles, Sara Shackleton
EIM - Sherri Baldwin, Debbie Chance, Rob Saltiel
EGM - Jody Crook, Neithard Foley, Juan Paysse, Bhavna Pandya, Courtney
Campbell, Terri Denning
NUGGETS & NOTES
"It is on the high side of medium to high." --Tim Battaglia, Vice
President/Steel Origination EIM (discussing the probability of a transaction
closing).
&I wanna see the phone glued to your ear!8 -- Ed Baughman, Vice
President/East Power Mid Market ENA
&REFERRALS, REFERRALS, REFERRALS! It pays to know good people." ) Ambroshia
Hunter Perry/HR ENA
You requested more info(. Proud parents Michelle Vitrella, PR coordinator,
and husband David Vitrella, manager of trading, have named their baby girl
Lily Ann. She was born on February 27, 2001.
Learning at the Speed of Enron
If you haven't had a chance to log on to www.investinme.enron.com, you're
missing a fast and easy way to gain the information you need to get ahead and
stay ahead. This new EWS training site combines everything you loved about
Ernie with much, much more. Enron employees now have the ability to register
for hundreds of classes on industry-related topics anywhere in the world.
Don't have time to attend a classroom training? No problem, you can now use
the web site to search for books, videos, CD ROM, and web-based training. All
the learning you want, anytime, anywhere. Just go to
www.investinme.enron.com and start building your future today!
NEWS FROM THE GLOBAL FLASH
Enron Wind
Enron Wind has purchased the factory facilities of the Dutch company, Aerpac,
Europe's second largest producer of wind turbine rotor blades. This move
represents a significant step towards fulfilling Enron Wind's strategic
objective of manufacturing high-quality and technically sophisticated rotor
blades in-house. Enron Wind will be using its own moulds to produce the
rotor blades. The acquisition of the Almelo-based factory facilities, which
are only 60 kilometres from Enron Wind's facilities in Salzbergen, Germany,
gives the company a convenient base for European wide distribution.
Enron applies for Greek electricity trading license
Enron, through its subsidiary Enron Power MEPE, has applied for an
electricity supply license for Greece, for the 34% market opening on Feb 19th
2001. If the license application is successful, Enron will be allowed to
approach customers consuming more than 100GWh up to a combined total peak
capacity of 350MW. In total, 4 companies have applied for power trading
licenses (Enel, ATEL and Cinergy also applied).
LEGAL STUFF
The information contained in this newsletter is confidential and proprietary
to Enron Corp. and its subsidiaries. It is intended for internal use only
and should not be disclosed. | {
"pile_set_name": "Enron Emails"
} |
You have EB 3270 | {
"pile_set_name": "Enron Emails"
} |
Join Enron Federal Credit Union, and The Foundation for Financial Literacy,
for the 2nd Session of our Financial Wellness Workshop Series:
Topic: Use It But Don't Abuse It: Credit
Thursday, July 13
11:30 a.m. - 12:30 p.m.
Doubletree - Allen Center (LaSalle B Room)
Cookies and soft drinks will be served.
Upcoming workshops include:
Thursday, August 17 Topic: Protection Against the Unforeseen: Insurance &
Personal, Employer and Government Benefits
September (Date TBD*) Topic: Rating Them by Risk Versus Reward: Investments
October (Date TBD*) Topic: Living too Long, Dying too Soon, Disability or
Impairment: Estate Plans
*September and October dates are to be determined.
Reservations are being accepted for the July and August workshops. Pease
send your reservation via Lotus Mail to Amanda Quiller, or via E-mail to
[email protected]. We look forward to seeing you! | {
"pile_set_name": "Enron Emails"
} |
The continued growth of the Enron Europe office and related businesses has
prompted a change in the management of Risk Assessment and Control (RAC) in
London. Effective in early January, 2001, Ted Murphy will transfer to the
London office and mange the RAC activities which include credit and market
risk and underwriting. Ted will continue to manage the Enron Global Market
Risk activities. Steve Young, currently managing RAC in London, will begin a
new assignment within EBS, also in London.
The Houston Market Risk group will be managed by David Port
As Enron continues to expand its trading and risk management businesses, it
is vital that trading and credit policies are administered in a consistent
and accurate manner across the company. Hopefully this realignment will
accomplish that goal.
Please join me in congratulating Ted, David and Steve on their new
assignments. | {
"pile_set_name": "Enron Emails"
} |
Paul,
Please let your group know that this module has been created. You can access module under content - Northeast Toolbox.
If you have any questions, please ask Michele Wilks or Mauricio Marquez.
Thanks
Rika
-----Original Message-----
From: Thomas, Paul D.
Sent: Saturday, October 06, 2001 9:41 AM
To: Imai, Rika
Subject: Northeast Market Data Toolbox
<< File: Market Data Toolbox.xls >>
Rika, I have compiled a short list of items to be put in the Northeast Market Data Toolbox. I know that we have other items that need to go in the Toolbox to start. I will continue to send you a file like this one (if ok) for future items that need to be added. Let me know if you have any questions.
Paul | {
"pile_set_name": "Enron Emails"
} |
Entire story: http://espn.go.com/nfl/news/2001/1220/1299353.html
NASHVILLE, Tenn. -- Tennessee Titans quarterback Steve McNair missed
practice Thursday for the third straight day because of back spasms and is
questionable for Saturday's game against Oakland.
"There are concerns," coach Jeff Fisher said. "He hasn't responded like we'd
hoped. He's still pretty stiff."
McNair first experienced some stiffness in his lower back late last week. In
the first quarter of Sunday's game against Green Bay, he said the muscles
tightened up. However, he stayed in the game and led the Titans to a 26-20
victory.
Even McNair is unsure of his status for Saturday night.
"If it's like it is right now, there's no way I can do it," he said. "I'm
very surprised. Usually this comes and goes, but this time the spasms have
stayed longer than I anticipated."
McNair has been questionable numerous times this season with shoulder,
ankle, thumb and elbow injuries. However, he missed just one game, and is
now producing the best statistics of his career.
********** Our View **************
Jeff Fisher is probably the least forthcoming of any NFL coach outside of
Mike Shanahan. Clearly, it doesn't sound good. But McNair is a guy who
seems to always be a stretch to play and then he goes out and does well (at
least lately) I honestly don't have any more info that what's reported
above. It would be my suggestion that if you have a good alternative, you
look hard at him as it's awfully murky for McNair right now.
Joe
/**/**/**/**/**/**/**/**/**/**/**/**/**/**/**/**/
Bryant Analytics, Inc. All Rights Reserved 1999-2001
To unsubscribe from this group, send an email to:
[email protected]
Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/ | {
"pile_set_name": "Enron Emails"
} |
Thanks. See you tonite. Looking forward to it.
Best,
Jeff | {
"pile_set_name": "Enron Emails"
} |
didn't want to add minutes to the cell phone bill so i'm emailing....just wanted to make sure you're feeling ok today. talk to you later. | {
"pile_set_name": "Enron Emails"
} |
Galveston sounds good to me.
-----Original Message-----
From: "Tamara Carter" <[email protected]>@ENRON
Sent: Friday, March 08, 2002 1:19 PM
To: [email protected]; Germany, Chris; Sanchez, Christina; Dinari, Sabra L.; [email protected]; Ordway, Chris; Garcia, Clarissa; Homco, Meredith; Allwein, Robert; Lamadrid, Victor
Subject: Steve's Happy Hour
Since I got such an overwhelming response from everyone (Clarissa is the ONLY one that responded to my email...) about happy hour tonight and based on the rumors that I am hearing that a few people had WAY too much to drink last night, we are moving Steve's birthday happy hour to next week. He says anyday is fine with him so if anyone has any preferences of where to go or when, please let me know.
see ya!
sissy | {
"pile_set_name": "Enron Emails"
} |
Chris, can you attend this?
---------------------- Forwarded by Hunter S Shively/HOU/ECT on 06/21/2000
10:18 AM ---------------------------
Thomas Araujo @ ENRON
06/21/2000 09:41 AM
To: Judy Barnes/HOU/ECT@ECT, Rebecca Ford/HOU/ECT@ECT, Jeff
Harbert/HOU/ECT@ECT, Kenneth M Harmon/HOU/ECT@ECT, Willie
Harrell/HOU/ECT@ECT, Cindy Horn/HOU/ECT@ECT, John Jacobsen/HOU/ECT@ECT, Karie
Hastings/HOU/ECT@ECT, Nanette Kettler/HOU/ECT@ECT, Scott Mills/HOU/ECT@ECT,
David Oliver/HOU/ECT@ECT, Rajib Saha/HOU/ECT@ECT, Stacey W White/HOU/ECT@ECT,
Robert Richard/Corp/Enron@ENRON, Hunter S Shively/HOU/ECT@ECT, Geoff
Storey/HOU/ECT@ECT, Scott Neal/HOU/ECT@ECT, Dick Jenkins/HOU/ECT@ECT, Thomas
A Martin/HOU/ECT@ECT, Phillip K Allen/HOU/ECT@ECT, David Oliver/HOU/ECT@ECT,
David Baumbach/HOU/ECT@ECT, William Kelly/HOU/ECT@ECT, Jay
Knoblauh/HOU/ECT@ECT, Theresa Staab/Corp/Enron@ENRON, Kam Keiser/HOU/ECT@ECT
cc: Stuart Reed/LON/ECT@ECT, Joel Henenberg/NA/Enron@Enron
Subject: MKM Demo
I spoke with some of you concerning the Market Knowledge Management (MKM)
project. At this time, we would like to demonstrate the MKM pilot to you.
To refresh your minds, MKM is a one-stop shopping for market data and
associated activities. The project is done in collaboration between two
groups in Houston and one in London. In November/December 1999 some of you
took part in user forums to discuss the feasibility of a one-stop shop for
market data
Background:
The intention is that all existing systems (i.e. various databases and
services) will be linked through a common infrastructure that will allow all
these systems to provide the services they have always provided plus a set of
standard services, such as:
Security
Data Validation
Notification
Auditing, and
Calculation.
In addition, it will allow client applications to ask MKM for the data and
services they need instead of going to individual systems. The point here is
that the user (or application)
will not need to know where the data resides, and
will have a uniform level of services across all systems
Demonstration:
A pilot was developed to prove the underlying technology and to provide users
a simple demonstration of the product to derive exact user requirements.
The demo will include the following components:
Browser: provides a user interface for publishing and retrieving a limited
selection of price and volume data for gas and power busines units;
Time Series Index: stores time series metadata;
Message Station: an inbox which holds inbound time series data;
TIBCO messaging backbone: underpins MKM and is transparent to the user;
and Connectivity to two market data servers:- LIM (Houston) and PR1P(London).
The remaining components will be delivered in following phases.
I would like to take this opportunity to invite you to demo of the product.
I would like to schedule the demonstration for Friday, June 23 at 1:00.
Could you also RSVP me. I am also attaching a document which will give you
more information of the MKM project. If you cannot meet me on the
suggested date, I can you a demo of MKM at your desk at your convenience. If
you would like to go through the browser, the web address is
http://test-mkmtimeseriesindex.enron.co.uk/default.asp?canregister=true. Use
your network id and password to gain access to the web site. If you have any
questions please call me at 35733.
Thank you in advance,
Thomas | {
"pile_set_name": "Enron Emails"
} |
You gotta go.
Susan Scott/ENRON@enronXgate
04/26/2001 03:49 PM
To: Jeff Dasovich/NA/Enron@Enron
cc:
Subject: RE: FW: Government Affairs Meeting
I want to go whitewater rafting!
Forget the power traders. I'll just call in sick.
-----Original Message-----
From: Dasovich, Jeff
Sent: Tuesday, April 24, 2001 2:27 PM
To: Scott, Susan
Subject: Re: FW: Government Affairs Meeting
The "big" meetings, which happen about every quarter, are de rigeur. The
summer "big" meeting is an absolute must (and generally very fun). I'll be
there.
Hope you're there, too.
Best,
Jeff | {
"pile_set_name": "Enron Emails"
} |
Daren,
FYI.
Bob
---------------------- Forwarded by Robert Cotten/HOU/ECT on 02/21/2001 08:03
AM ---------------------------
Vance L Taylor
02/20/2001 04:32 PM
To: Robert Cotten/HOU/ECT@ECT
cc: Mary M Smith/HOU/ECT@ECT, Gary A Hanks/HOU/ECT@ECT, Melissa
Graves/HOU/ECT@ECT
Subject: March Preliminary Wellhead Production Estimate
Bob,
Please see the attached file estimating wellhead production for the month of
March. Please be advised that this is a preliminary estimate as to this
date, we have received no noms for March. I will update you with any
revisions as they occur.
Thanks,
vlt
x3-6353 | {
"pile_set_name": "Enron Emails"
} |
---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 07/26/2000
09:12 AM ---------------------------
Pinnamaneni Krishnarao
07/25/2000 05:33 PM
To: Vince J Kaminski/HOU/ECT@ECT, Shirley Crenshaw/HOU/ECT@ECT
cc:
Subject: Agenda for offsite (Breckenridge)
EES Research - Agenda:
Structuring Models: Development of next-generation of Pricing and Structuring
models for different types of transactions: discuss priorities and issues.
Optimization Models: Identify business needs and opportunities for applying
optimization methods to create value in total energy outsource deals.
Credit Risk and Value@Risk Support for EES: Discuss support personnel issues
and approaches for measuring these risks for EES deals given the
uncertainties in energy consumption and the real options embedded in the
outsource contracts. | {
"pile_set_name": "Enron Emails"
} |
Gary,
Do you have any record of this?
D
---------------------- Forwarded by Daren J Farmer/HOU/ECT on 03/21/2001 01:20 PM ---------------------------
Aimee Lannou 03/20/2001 01:38 PM
To: Daren J Farmer/HOU/ECT@ECT
cc: Juliann Kemp/ENRON@enronXgate, Rebecca Griffin/NA/Enron@Enron
Subject: Central Power & Light
Daren - was there a deal for 5.000 at CP&L on Feb. 21? CP&L shows 5.000, but I have looked in MOPS and there is not a deal. Can you verify whether or not there was a deal for that day? Thanks.
Aimee
---------------------- Forwarded by Aimee Lannou/HOU/ECT on 03/20/2001 01:39 PM ---------------------------
Rebecca Griffin@ENRON
03/20/2001 01:18 PM
To: Aimee Lannou/HOU/ECT@ECT
cc:
Subject: Central Power & Light
Aimee,
I received a call from CP&L about the February 2001 production invoice. They are showing 5,000 mmbtu on February 21 for HPL. We are not showing anything for HPL on that day. Could you verify if this is correct?
Thanks for your help.
Rebecca | {
"pile_set_name": "Enron Emails"
} |
And the winner is...Jeff Skilling!!!!! | {
"pile_set_name": "Enron Emails"
} |
Debra Perlingiere
Enron North America Corp.
1400 Smith Street, EB 3885
Houston, Texas 77002
[email protected]
Phone 713-853-7658
Fax 713-646-3490
----- Forwarded by Debra Perlingiere/HOU/ECT on 08/09/2000 03:09 PM -----
Jeffrey McClellan
08/09/2000 02:50 PM
To: Jeffrey McClellan/HOU/ECT@ECT
cc: (bcc: Debra Perlingiere/HOU/ECT)
Subject: Reminder: HAPPY HOUR TOMORROW (THURS)
---------------------- Forwarded by Jeffrey McClellan/HOU/ECT on 08/09/2000
02:53 PM ---------------------------
Jeffrey McClellan
08/09/2000 02:49 PM
To: Jeffrey McClellan/HOU/ECT@ECT
cc:
Subject: Reminder: HAPPY HOUR TOMORROW (THURS) | {
"pile_set_name": "Enron Emails"
} |
Hi, Cindy:
I'm assisting EBS in some of their trading work for awhile, so this is why I am sending you the attached memo requesting an Enron Corp. Guaranty.
Please let me know when the guaranty is ready and I'll arrange for pick-up.
Thanks!
Marie
x33907 | {
"pile_set_name": "Enron Emails"
} |
Attached are EES's Volumetric NYMEX and Basis positions for 7/06/2000. If
you have any questions, you may contact me at X3-5070.
Thanks,
Monica for Kyle | {
"pile_set_name": "Enron Emails"
} |
Agree with most of what you've said. I also would like a good handle on TRA
undercollection ##s. We've had great difficulty getting agreement on ##s.
I'll give it a try before tomorrow.
[email protected] wrote:
> Sorry. Been a bit crazy around here. Thanks for the note, and thank you
> for doing such a good job at driving this process. My thoughts on your
> proposal (and these are very preliminary): 1) politicians may not be
> willing to go as high as 25% for fear of being accused of a "utility
> bailout"--maybe 10-15%? though utility solvency may force their hands. 2)
> TURN will go ape-#%#$ if we make the "roll off" retroactive to October. 3)
> I'm willing to allow utilities to collect TRA undercollections, but feel
> that customers and utilities (not me) need to figure out precisely what
> that number is.
>
> Look forward to getting closure tomorrow, though I'm very concerned that
> we've lost Edison, given Bryson's public calls to return to 1950.
>
> Best,
> Jeff
>
>
> Evelyn Kahl
> Elsesser To: "Jeff Dasovich (E-mail)"
> <[email protected] <[email protected]>
> m> cc:
> Subject: thanks
> 12/12/2000
> 06:57 PM
>
>
>
> I really appreciated your participation today...very substantive and
> constructive. I particularly liked the idea of a migration "trigger",
> which I included in the outline. I personally think that the big ticket
> items are rate level, rate freeze end and TRA allocation. I wish we
> could start facing that dance. I'd play with (a) 25% immediate increase
> in commodity price (explicit, rather than residual); (b) rate freeze end
> on October 2, 2000 (c) pre EOF TRA undercollections to utilities,
> everything after is allocated forward to procurement customers.
> Thoughts? | {
"pile_set_name": "Enron Emails"
} |
We confirm receipt of your registration for the above-mentioned conference.
The conference will be held at New York University Stern School of Business,
Henry Kaufman Management Center, 44 West 4th Street, New York City.
Registration and continental breakfast will begin at 8:30 a.m., when you will
receive the conference material and a name tag. Meanwhile, if you have any
questions regarding the conference, please do not hesitate to contact me.
*************************************************************
Mary T. Jaffier
NYU Salomon Center
Stern School of Business
44 West 4th Street, Suite 9-160
New York, NY 10012
Tel: 212-998-0706
Fax: 212-995-4220
http://www.stern.nyu.edu/salomon | {
"pile_set_name": "Enron Emails"
} |
Vince: I'm sure that you are already aware of this, but I wanted to forward
it to you since this didn't come up in our meeting the other morning....
Molly
-----Original Message-----
From: Koepke, Gwyn
Sent: Tuesday, April 10, 2001 1:20 PM
To: [email protected]
Cc: Molly Magee/HOU/ECT@ENRON
Subject: Enron Recruitment
Dear Ron,
My boss, Enron's chief international economist, is interested in talking with
SAIS grads who might want to come to Houston and do economics work. Same
drill as last time, looking for someone whose done the quant track but with
excellent writing skills. I think I sent you a job description a few months
back.
Can you help identify some candidates, and send their resumes our way? Molly
Magee is our recruiting expert and she can help setup the interviews with
Maureen. Maureen is still in London on secondment but is available to
interview people of the phone.
Thanks for your help.
Gwyn | {
"pile_set_name": "Enron Emails"
} |
Debra Perlingiere
Enron North America Corp.
Legal Department
1400 Smith Street, EB 3885
Houston, Texas 77002
[email protected]
Phone 713-853-7658
Fax 713-646-3490
----- Forwarded by Debra Perlingiere/HOU/ECT on 10/02/2000 10:52 AM -----
"Ohr, Leslie (LAOH)" <[email protected]>
10/02/2000 10:21 AM
To: "'[email protected]'" <[email protected]>
cc:
Subject: RE: Master Agreement
Debra-- Martin Dale is the CPC client on this matter. I'm in the process of
getting in touch with him this morning on the confirmation letter.
Leslie
> -----Original Message-----
> From: [email protected] [SMTP:[email protected]]
> Sent: Friday, September 29, 2000 2:53 PM
> To: [email protected]
> Subject: Master Agreement
>
> Further to our conversation, please see the attached documents for your
> review.
>
> (See attached file: CHEVRON PHILLIPS CHEMICAL.doc)(See attached file:
> Chevron Phillips Confirm.doc)
>
> Please note delivery begins on October 1, 2000 on the confirm.
>
> Please do not hesitate to give me a call with your questions and or
> comments regarding this matter.
>
> Regards,
> Debra Perlingiere
> Enron North America Corp.
> Legal Department
> 1400 Smith Street, EB 3885
> Houston, Texas 77002
> [email protected]
> Phone 713-853-7658
> Fax 713-646-3490 << File: CHEVRON PHILLIPS CHEMICAL.doc >> << File:
> Chevron Phillips Confirm.doc >> | {
"pile_set_name": "Enron Emails"
} |
As per our discussion in yesterday's staff meeting, the attached file
summarizes the latest EnronOnline products and countries under development.
Please let me know if you have any questions.
Also, fyi, the revised target date for Phase 2 is September 11. I will let
you all know if this changes.
Sheri | {
"pile_set_name": "Enron Emails"
} |
Will keep you posted. I did talk with Michel who will be making contacts on
his side today.
---------------------- Forwarded by John L Nowlan/HOU/ECT on 10/31/2000 11:09
AM ---------------------------
Anastasia Karabatsos
10/31/2000 10:56 AM
To: Michel Decnop/LON/ECT@ECT, David Hardy/LON/ECT@ECT, Robert
Quick/LON/ECT@ECT, Chris Mahoney/LON/ECT@ECT, Ross Koller/LON/ECT@ECT, John L
Nowlan/HOU/ECT@ECT, Tani Nath/LON/ECT@ECT
cc: Steve W Young/LON/ECT@ECT, Michael R Brown/LON/ECT@ECT, John
Sherriff/LON/ECT@ECT
Subject: Garcia Munte Update
A payment of approximately $9.5-10 mm was due today from GM
Spoke with their office but were told that no instructions for payments were
made today.
We have sent them a fax requesting immediate payment and we were told that
the general manager will call us on Thursday to resolve this situation.
(Wednesday is a national holiday in Spain).
Will keep you informed of any developments
Anastasia | {
"pile_set_name": "Enron Emails"
} |
With Enron Stock Trading at Book Value, Some See Company as a Takeover Target
The Wall Street Journal, 10/31/01
STOCK MARKETS LONDON STOCK EXCHANGE - Shell hurt by Enron bid talk.
Financial Times, 10/31/01
OBSERVER - No show - AVENUE OF THE AMERICAS.
Financial Times, 10/31/01
COMPANIES & FINANCE THE AMERICAS - Rumours of broader inquiry hit Enron.
Financial Times, 10/31/01
WORLD STOCK MARKETS - Wall St suffers as confidence index hits low.
Financial Times, 10/31/01
Waiting for Balance Sheets Amid Enron's Debacle: David Wilson
Bloomberg, 10/31/01
The Art of Trading
TheStreet.com, 10/31/01
S&P Analyst Todd Shipman on Enron Corp.: Credit Rating Comment
Bloomberg, 10/31/01
Enron Fails to Get Funds From Institutional Investor, WSJ Says
Bloomberg, 10/31/01
Takeover Talk Can't Halt Enron Stock Plunge.
The Oil Daily, 10/31/01
Big volume, big drop for Enron shares
Houston Chronicle, 10/31/01
The One-Eyed Man
New York Times, 10/31/01
After the bubble - Tuesday
The Daily Deal, 10/31/01
PGE's financial loss first in years
Associated Press Newswires, 10/31/01
`Enron buy-out offer highly over-priced'
The Times of India, 10/31/01
Indian lenders to Dabhol to meet power secretary today
Business Standard, 10/31/01
Enron Queried by SEC on Debt, Partnership in 1998 (Update1)
Bloomberg, 10/31/01
Enron Probe Is Moved to SEC's Head Office From Texas (Correct)
Bloomberg, 10/31/01
USA: NYMEX plans to start OTC natgas clearing services.
Reuters English News Service, 10/30/01
USA: UPDATE 3-Enron shares plunge 19 percent, hit 1992 levels.
Reuters English News Service, 10/30/01
Enron's stock continues tumbling after investigation reportedly moves to Washington
Associated Press Newswires, 10/30/01
Heard on the Street
With Enron Stock Trading at Book Value, Some See Company as a Takeover Target
By John R. Emshwiller and Rebecca Smith
Staff Reporters of The Wall Street Journal
10/31/2001
The Wall Street Journal
C1
(Copyright (c) 2001, Dow Jones & Company, Inc.)
With growing revenue, a dominant position in major energy-trading markets and a depressed stock price, Enron Corp. would logically be prime takeover bait. But in the topsy-turvy world of Enron, what constitutes logic anymore?
Takeover speculation has swirled around Wall Street and the energy markets in recent days as Enron shares have plummeted by about two-thirds to their lowest level in a decade, a selloff sparked by a loss of investor confidence in the Houston energy-trading company following big third-quarter write-downs and the disclosure of a Securities and Exchange Commission inquiry into transactions involving its former chief financial officer. Among the names bandied about as potential buyers of all or at least a substantial chunk of Enron are General Electric's GE Capital unit, Warren Buffett's Berkshire Hathaway and Royal Dutch Shell. GE and Berkshire had no comment. A spokesman for Shell couldn't be reached.
Meanwhile, Enron has approached at least one major institutional investor, seeking a capital infusion, according to a person familiar with the matter. But Enron was turned down because of uncertainties over its financial condition, this person says.
While Enron shares, which are trading at about book value, look cheap by historical standards and even compared with two weeks ago, it isn't clear whether history is much guide when evaluating Enron these days, say analysts and others. Even fans of the stock have long complained about difficulty understanding how Enron operates because of its enormously complex financial structure and relatively sparse disclosure. For years while Enron's stock price was soaring, much of Wall Street didn't seem to care about such issues.
Now with Enron's stock dropping, that lack of understanding is haunting the company. "How bad could Enron get? That's really the question," says Prudential Securities analyst Carole Coale. Yesterday, Ms. Coale reduced her price target for Enron shares to $9 and maintained the "sell" recommendation she recently put on the stock. At 4 p.m. yesterday in New York Stock Exchange composite trading, Enron shares were down $2.65, or 19%, to $11.16, down from nearly $85 a year ago.
"When a business like this starts a down cycle, they've got to stop it and stabilize before anyone will be willing to have a really intelligent conversation with them," says Peter J. Solomon, head of Peter J. Solomon Co., an investment-banking boutique.
An Enron spokesman says the company won't comment on takeover speculation; nor will it comment on whether it had approached potential investors about a possible capital infusion. However, the continued plunge in Enron shares and turmoil surrounding the company are a significant "overreaction in the marketplace. Our core businesses are strong," he says. The company has said that it is taking steps to restore investor confidence.
For example, Enron is trying to negotiate a new credit line with its major banks. Late yesterday, Enron's bankers were putting the final touches on a new credit line of more than $1 billion, according to people familiar with the discussions.
Analysts and other observers say that one uncertainty surrounding Enron is the condition of its vast energy-trading operation. As the nation's biggest energy trader, Enron is a principal in one-quarter of all electricity and natural-gas trades. Enron's EnronOnline Internet-based trading platform has transacted more than $884 billion of trades since it was created in November 1999 and does about $4 billion a day in transactions.
One worry is that Enron's trading partners, edgy about the turmoil swirling around the company, will start demanding much tougher credit terms from the Houston company or simply cut back doing business. Such a trend, if it picked up enough momentum, could have troubling consequences for Enron. "We are all in suspense . . . . It all depends on how the market reacts," says Susan Abbott, a managing director at Moody's Investors Service. On Monday, Moody's downgraded Enron's long-term debt.
There were some warning signs of unease among trading partners even before the company's third-quarter earnings release set the stage for the huge drop in the stock price. About six to seven weeks ago, Entergy Corp. became worried about its level of exposure in Enron-related deals, says Wayne Leonard, chairman and chief executive officer of the big New Orleans energy company. Since then, Entergy has cut its Enron exposure to about $10 million to $20 million from $90 million to $100 million, he says. Mr. Leonard didn't specify what prompted the worries, which appear to have arisen after the surprise August announcement by Jeffrey Skilling that he was resigning as Enron president and chief executive. Mr. Skilling cited personal reasons as well as his concerns over the falling stock price.
While the Enron spokesman says the company doesn't comment on specific trading arrangements, he adds that Entergy is one of his company's smaller trading partners. He says major trading partners are doing business with Enron on "essentially the same terms and conditions" and that overall "our trading operations are as strong as ever."
The company spokesman adds that a few smaller trading partners in Europe are seeking revised credit terms from Enron. "We are working to put together credit terms, which they are more comfortable with," says the spokesman, who declines to be more specific.
In an effort to bolster its liquidity and position in the marketplace, Enron last week drew down some $3 billion, accounting for the bulk of its existing credit lines. While it used most of that money to buy its outstanding commercial paper, a short-term corporate IOU, the company retained about $1 billion of the borrowings as cash.
A friendly takeover of all or part of Enron would be likelier than a hostile one. Among the most obvious candidates would be other companies with big trading operations and experience in risk management. Two possible deterrents to a would-be buyer: a flurry of recent shareholder lawsuits filed against Enron and the continuing SEC probe.
---
Robert Frank, Ken Brown, Jathon Sapsford and Matt Murray contributed to this article.
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
STOCK MARKETS LONDON STOCK EXCHANGE - Shell hurt by Enron bid talk.
By PETER JOHN, PATRICK LORD and RUTH SULLIVAN.
10/31/2001
Financial Times
(c) 2001 Financial Times Limited . All Rights Reserved
Shell Transport underperformed BP on speculation that it might be poised to launch a multi-billion dollar bid for Enron of the US.
The company is believed to have been in talks with the indebted energy group earlier in the year.
Enron has a market capitalisation of around $11bn. Analysts say Shell would probably not have to offer a huge premium and could afford to fund a deal with cash. Shell said it would not comment on the speculation.
Enron would be a good fit but earlier this week Moody's became the first of the main rating agencies to downgrade the Houston-based company's debt by lowering it to just two notches above "junk" status citing "the deterioration in Enron's financial flexibility".
Steve Turner of Commerzbank said: "I think the market would be very nervous if Shell were to launch a bid for Enron because of the uncertainty about Enron's balance sheet."
There was another judder to the share price from speculation that Moeara Enim, an investment vehicle whose sole asset is a 55m share stake in Royal Dutch, faces a bid and break up by Fortis, the Dutch-Belgian financial group. Shell fell 14 1/2 to 515p and BP dropped 6 1/2 to 553 1/2p.
Vodafone accounted for 20 per cent of the Footsie fall after the mobile phone group, which has rallied sharply since September 11, came off the boil.
The shares dropped 5 1/2 to 157 3/4p on turnover of 435m shares, almost 22 per cent of the total traded across the UK market.
The shares had rallied 26 per cent over the past six weeks and several brokers had started to call the top. The latest to downgrade was Commerzbank which moved its stance to "reduce" from "hold" with a fair value estimate of 149p a share.
The broker's move reflected worries that Vodafone's recent revenue per user figures were not sufficient to bolster confidence in forecasts of longer-term sustained customer revenue growth.
Colt profits taken
Elsewhere in the sector, Colt Telecom fell 15 1/4 to 121 3/4p as investors took profits and Merrill Lynch downgraded estimates.
Merrill said that after Colt's recent disappointing third quarter results, it had cut its revenue forecasts for 2001 and 2002 by 1 per cent and 5 per cent respectively.
Colt had jumped more than 12 per cent on Monday on talk that Cable & Wireless might launch a bid.
3i fell 60 to 730p after an early release of the group's interim results showed that net asset value per share had slid 22.6 per cent to 631p. The company said it had decided on an early release of its results as it was also announcing organisational changes. It said it was cutting 17 per cent of its workforce in an effort to maintain a strong balance sheet amid poor market conditions.
Close Brothers fell 37 to 715p as the merchant bank said it remained cautious about the outlook.
London Bridge Software fell 12 to 129 1/2p as Nomura downgraded its rating and forecasts to reflect the group's high level of US exposure.
Spirent fell another 11 to 116 1/2p as Deutsche Bank became the latest broker to issue cautious advice. It started coverage of the communications testing group with a "market perform" stance, saying near-term sector risks outweighed the long-term prospects.
Medisys gained 7 to 62 1/2p after Dresdner Kleinwort Wasserstein initiated coverage on the stock with a "buy" recommendation.
Shares in GKN fell 9 to 271p after the automotive and aerospace engineer announced that it is to shed 1,250 jobs - including some in the UK. The cuts are likely to be concentrated in the civil aerospace area which has suffered heavily. Credit Suisse First Boston cut its profit forecasts for the next two years.
Bullough, the engineering holding company, said any improvement in trading in the second half is unlikely. Its shares fell 3 1/2 to 18p.
British American Tobacco brought some cheer to the FTSE 100 as its shares rose 11 1/2 or almost 2 per cent to 597 1/2p after the company said its four global brands showed an overall growth rate of 9 per cent and reported robust nine month results.
BAT on the rise
Michael Smith, an analyst at Morgan Stanley Dean Witter said third quarter results were "slightly better than expected" and showed that BAT can meet its numbers for the full year.
"It can achieve 8 per cent earnings growth for the full year" he said. But although there was plenty of reassurance for this year, next year will be more of a challenge. "Weak macro-economic conditions and smokers downtrading to cheaper brands are likely to prove a problem next year," he said. Another concern will be countries such as Germany and Malaysia where tax on cigarettes is increasing.
Some of the fizz went out of alcoholic drinks groups as two leading companies in the sector made cautious comments about future growth prospects after the September 11 terrorist attacks on the US. Despite reporting robust full-year results, Allied Domecq shares fell 11 to 351 1/2p as the group warned that future earnings growth will be harder to achieve than last year.
Merrill Lynch said that trading profit was 2 per cent ahead of estimates at #543m, against the broker's forecast of #530m but Merrill analyst Mark Puleikis said there will be two hits to profits going forward.
"Allied will spend #50m on IT over the next few years and a further de-stocking programme of #15m per annum over the next two years," he said. The broker gave a discounted cash flow forecast of 460p and retained its "neutral" recommendation. The broker said it continued to prefer Diageo.
ABN Amro also retained its "hold" stance.
Leisure and hotel group Whitbread gained 7 1/2 to 520p after reporting a 32 per cent drop in first half profits, in line with analysts expectations. ABN Amro said it anticipates about a 5 per cent upgrade to its profit before tax estimate for 2002 and retained its "add" stance, while ING Barings Charterhouse Securities switched its recommendation from "hold" to "buy". Regular UK equities updates at www.ft.com/equities.
(c) Copyright Financial Times Ltd. All rights reserved.
http://www.ft.com.
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
OBSERVER - No show - AVENUE OF THE AMERICAS.
10/31/2001
Financial Times
(c) 2001 Financial Times Limited . All Rights Reserved
Ken Lay, Enron's chairman, knows all about leadership in turbulent times.
The preacher's son who propelled the US energy group and trader from a pipeline company to the number one energy trading company in the US had been expected to join a host of other leading chief executives and Rudolph Giuliani, New York's mayor, in New York next week.
"Leadership in turbulent times", organised by Fortune magazine, is a benefit conference to tackle the "extraordinary new challenges" faced by US companies in the aftermath of September 11.
Conference organisers had been keen to ask Lay where he believed his industry, on which all businesses depend so heavily, was headed.
A timely question. Investors have dumped Enron in recent weeks, triggered by credit rating downgrades, lingering questions over the company's off-balance-sheet deals and potential conflicts of interest for its former chief financial officer.
Times are perhaps too turbulent for Lay. He cancelled his appearance.
(c) Copyright Financial Times Ltd. All rights reserved.
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Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
COMPANIES & FINANCE THE AMERICAS - Rumours of broader inquiry hit Enron.
By SHEILA MCNULTY.
10/31/2001
Financial Times
(c) 2001 Financial Times Limited . All Rights Reserved
Enron's shares continued to fall yesterday on speculation that the Securities and Exchange Commission's (SEC) unofficial inquiry into the financial dealings of the US energy group had been broadened, Sheila McNulty reports from Houston.
So far the SEC has declined to comment, following its request for information after Enron disclosed a $1.2bn reduction in shareholder equity tied to controversial financing vehicles set up by the recently replaced chief financial officer, Andrew Fastow.
Yesterday, the company would not say whether the probe had been made official or grown beyond that $1.2bn charge. The Houston-based company has lost more than $15bn in market capitalisation since October 16. By the close yesterday, the stock was down 19.19 per cent, trading at $11.16.
(c) Copyright Financial Times Ltd. All rights reserved.
http://www.ft.com.
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
WORLD STOCK MARKETS - Wall St suffers as confidence index hits low.
By MARY CHUNG.
10/31/2001
Financial Times
(c) 2001 Financial Times Limited . All Rights Reserved
US equities continued to sink in late morning trade as investors took more profits following grim economic data showing a plunge in consumer confidence.
By midsession, the Dow Jones Industrial Average was down 145.24 to 9,124.26 while the S&P 500 index fell 17.89 to 1,060.41. The Nasdaq Composite gave up 29.69 at 1,669.83.
Wall Street's optimism for a recovery faded, as the consumer confidence index fell for October to its lowest level in seven years. "It's time to take a breather. The consumer confidence number wasn't good and you're going to get a whole week of data that probably aren't going to be very good," said John O'Donoghue, director of equity trading at Credit Suisse First Boston.
Dow components were broadly lower, with McDonald's taking the lead, down 6 per cent at $25.60 after the fast-food chain trimmed earnings targets for 2002. Philip Morris, the tobacco maker, fell 4 per cent to $47.77 after Goldman Sachs lowered its rating from "recommended" to "market outperformer".
Eastman Kodak retreated 4.3 per cent at $28.58 on competition fears after Lehman Brothers said Wal-Mart is set to introduce its own private label film. Wal-Mart shed 1.7 per cent at $51.
Procter & Gamble, however, was a bright spot on the Dow after the company reported a fiscal first-quarter profit that topped Wall Street estimates. Shares gained 0.65 per cent at $71.76.
Coca-Cola was down 2 per cent at $47.70 after the beverage maker agreed to buy Odwalla, a maker of juices and shakes. Odwalla rose 28 per cent at $15.12.
Ford fell 0.3 per cent at $16.17 after the company announced the resignation of Jac Nasser as chief executive after an acrimonious split with the Ford family.
Enron, the embattled energy trading company, continued to decline, off another 19 per cent at $11.20 as credit concerns and credibility questions weighed on the company.
Technology stocks were mostly lower, with Microsoft off 1 per cent at $59.05 and Intel 1.3 per cent at $23.86. Juniper Networks shed 1 per cent at $23.76 after Merrill Lynch cut its rating. Its rival Cisco Systems gained 1.3 per cent at $16.64.
Toronto fell in early trading with the weak opening for the Nasdaq weighing heavily on sentiment. The S&P 300 composite index was off 0.8 per cent at 6,838.60 at midsession.
Technology leaders led the way down. Celestica lost C$1.85 at C$52.65 and C-MAC Industries C$1.60 at C$33.15. Nortel Networks shed 21 cents to C$9.02.
Golds, boosted by a firm bullion price, were stronger. Barrick added 55 cents at C$25.40 and Placer Dome C$1.15 at C$18.20.
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Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Waiting for Balance Sheets Amid Enron's Debacle: David Wilson
2001-10-31 06:19 (New York)
Waiting for Balance Sheets Amid Enron's Debacle: David Wilson
(Commentary. David Wilson is a columnist for Bloomberg News.
The opinions expressed are his own.)
Princeton, New Jersey, Oct. 31 (Bloomberg) -- International
Business Machines Corp.'s press release about its third-quarter
results included this statement, attributed to Louis Gerstner,
chairman and chief executive officer:
``IBM's balance sheet remains among the strongest in the
technology industry, or any industry.''
The largest maker of computers and provider of computer
services wasn't the only company to cite its balance sheet, a
statistical summary of what a company owned, what it owed, and
what was left over for shareholders on a specific date.
General Electric Co., the largest company by stock market
value, and Citigroup Inc., the No. 1 financial-services company,
made similar references in their third-quarter releases.
None of the companies really showed people what they were
telling them. IBM, General Electric and Citigroup are among 19
members of the Dow Jones Industrial Average whose most recent
quarterly releases didn't include balance sheets.
The evidence will come only when the companies submit their
quarterly reports to the U.S. Securities and Exchange Commission.
Balance sheets are required in the so-called 10-Q filings, along
with the 10-K filings that cover the full year.
Not Much Publicity
By then, statistics about the companies' assets, liabilities
and shareholders' equity, the accounting terms for what's owned,
what's owed and what's left over, will be rather outdated.
U.S. companies have 45 days from the end of a fiscal quarter
to submit 10-Q reports, and 90 days from the end of a fiscal year
for 10-K reports.
These filings usually don't arrive until weeks after the
publication of earnings releases. So it's easy to overlook the
additional information they provide, especially when it doesn't
receive the kind of publicity that the earnings release does.
Yet the recent example of Enron Corp. -- another company that
omits balance sheets from press releases -- provides evidence that
investors who forgo the extra effort needed to find them do so at
their own peril.
Enron, the largest energy trader, reported $1.01 billion in
``non-recurring'' costs in the third quarter from an expansion
into water, telecommunications and retail-energy sales. The
expense contributed to a $618 million loss for the quarter.
These numbers were part of the Houston-based company's income
statement, a summary of sales, costs and expenses, and profits or
losses during a specified time period. Income statements are the
cornerstone of any company's earnings release.
Billion-Dollar Numbers
The release didn't even mention a larger figure that affected
the balance sheet: a $1.2 billion drop in shareholders' equity
during the quarter. Chairman and CEO Kenneth Lay disclosed the
repurchase in a subsequent conference call.
This decline resulted from the company's repurchase of 55
million shares from two partnerships, LJM Cayman LP and LJM2 Co-
Investment LP, that helped finance projects. Andrew Fastow, who
ran both partnerships, was ousted from his job as chief financial
officer last week.
Such a one-two punch dealt a blow to investors' fortunes.
Since Oct. 17, the day after the earnings release, Enron's shares
have fallen each day and have lost two-thirds of their value. The
low of $10.90 yesterday was the lowest price since July 1992.
Enron's third-quarter statement referred only to a loss on
``finance arrangements with a previously disclosed entity'' which
contributed to $544 million of investment losses. The size of that
item was later put at $35 million.
The latter number amounts to just 3.5 percent of the overall
figure for ``non-recurring'' costs, and less than 1 percent of the
company's $47.6 billion in revenue for the quarter.
Growing Debt Burden
The $1.2 billion figure is considerably larger not only in
dollars, but also in percentage terms. Enron had $11.74 billion of
shareholders' equity as of June 30, according to the balance sheet
in its second-quarter 10-Q filing. The reduction equaled more than
10 percent of that total.
Among other things, the balance sheet also shows that the
company relied more heavily on debt financing during this year's
first half. Short-term debt, due in one year or less, doubled to
$3.46 billion. Long-term debt, maturing in more than one year,
rose 9.4 percent to $9.36 billion.
There's even more to the story of Enron's indebtedness. The
company guaranteed $3.3 billion in borrowing by Osprey Trust and
Marlin Water Trust, which bought some of its power plants. Unless
they pay off the debt by reselling the plants, the company may
have to come up with the difference.
Nevertheless, any summary of a company's financial position
provides a more complete picture than the income statement alone.
This also holds true for companies whose finances are in better
shape -- IBM, General Electric and Citigroup, to name three.
Knowing by Showing
Other members of the Dow industrials that wait until their
filings to provide balance sheets are American Express Co., AT&T
Corp., Boeing Co., Caterpillar Inc., Coca-Cola Co., Walt Disney
Co., DuPont Co., Eastman Kodak Co., Exxon Mobil Corp., General
Motors Corp., Honeywell International Inc., Johnson & Johnson,
McDonald's Corp., Merck & Co., Procter & Gamble Co. and SBC
Communications Inc.
Companies that include them in releases are Alcoa Inc.,
Hewlett-Packard Co., Home Depot Inc., Intel Corp., International
Paper Co., Microsoft Corp., Minnesota Mining & Manufacturing Co.,
J.P. Morgan Chase & Co., Philip Morris Cos., United Technologies
Corp. and Wal-Mart Stores Inc.
Citigroup's third-quarter earnings release has this quote
from Sandy Weill, chairman and CEO: ``We have the balance sheet
strength to make timely acquisitions to expand our franchises.''
The New York-based company had more than $85 billion of ``total
equity,'' Weill said in the statement.
General Electric's release quoted Chairman and CEO Jeffrey
Immelt as saying ``our strong balance sheet, which gives us the
flexibility to pursue strategic opportunities,'' is one of the
Fairfield, Connecticut-based company's ``fundamental strengths.''
Investors can only take these CEOs at their word for now.
Their companies, and many others, are only telling rather than
showing -- at least in their earnings releases.
--David Wilson in the Princeton newsroom (609) 750-4546
The Art of Trading
By James J. Cramer <mailto:[email protected]>
TheStreet.com
10/31/2001 08:24 AM EST
URL: <http://www.thestreet.com/p/rmoney/jamesjcramer/10003263.html>
Throughout this tremendous downturn in the fortunes of big-cap stocks turned small-cap and large growth stocks turned into small value plays, we have seen mutual fund families fall by the wayside as they weren't able to dodge the quickly changing market.
We tend to want to believe that it is just stock selection that sunk a First Hands or a Janus or an Invesco or a Van Wagoner or those ne'er-do-well Putnam funds.
But it's not. It's also trading. Many of the funds that gained great renown in the 1990s that have now fallen on such hard times since the bear market began in 2000 are funds that don't know how to sell, that don't know how to get out of stocks.
You won't read this kind of criticism in the mutual fund ratings, which tend to be antiseptic and mathematically derived. And you won't read it in the magazines like Money or the SmartMoney, outlets that, while strong in some departments, really don't understand trading at all.
But it is what determines good from bad in tough markets, and right now you are seeing some really horrible trading from some of these giant mutual funds. They are simply unable to extricate themselves from loser positions without hurting themselves on the go out.
Trading's an art. For those of you who are football fans, trading is like what happens in the interior line, the trenches. You know that's where the game can be decided. Basketball fans? Trading is the movement of other players who don't have the ball. It is the invisible game that determines what is going to happen.
I take it seriously because I was a trader and most of my friends are traders. We will often joke about how some of these mutual funds just don't have a clue when they are trying to get out of stocks. They blow them to kingdom come with their sloppiness and their inability to execute.
Others, however, can trade magnificently and know how to play the game. Have you noticed, for example, I never make fun of Fidelity in my litany of fund criticism? One of the reasons is that Fidelity is a fabulous trader. FIDO has a great trading desk that is incredibly adept at getting in and out of stocks. They are masters. It saves their portfolio managers' fortunes. I know this because I have handled their orders and because I have many friends who currently handle their orders and we all talk, as we always have, about this stuff every day.
When we look at sagas like Enron (ENE:NYSE - news - commentary) , where mutual funds were caught trying to exit, caught like trapped deer on an interstate, we have to remember that not all mutual fund trading desks are created equally. Some simply don't have a clue.
Getting out of stock, especially when you have built up a huge concentration in one position, is an art, an art that many funds of the world never had. They even denigrated the profession by never emphasizing it as a virtue. In these days when the market blitzes positions it doesn't like, if you don't have a good trading line, you could be history.
Many of these mutual fund "families" will turn out to be history when this era ends. Don't let them make your nest egg history, too. Especially when there are other fund groups that do know the value of good trading and can handle these markets with much more poise and far fewer losses.
Random musings: Pit yourself against others and make money in our trading contest. And create a record to show others that you know how to trade so you can catch on with or create your own hedge fund! That's what this contest is all about. Click here for more info.
S&P Analyst Todd Shipman on Enron Corp.: Credit Rating Comment
2001-10-31 08:18 (New York)
New York, Oct. 31 (Bloomberg) -- Todd Shipman, a director at
Standard & Poor's, a credit rating company, comments on Enron
Corp, the Houston-based largest energy trader.
S&P affirmed the company's long-term credit rating at
``BBB+'' on Oct. 25. It lowered its outlook to negative from
stable following the announcement that the U.S. Securities and
Exchange Commission is investigating the company's financial
dealings with affiliates that were run by ousted Chief Financial
Officer Andrew Fastow.
Enron's shares have fallen 87 percent this year. They
finished yesterday down $2.65, or 19 percent, to $11.16.
``What little bit of credibility management had with
investors has continued to erode,'' he said.
``People, I don't believe, are acting based on facts that are
coming out.'' They are trading on the ``uncertainty as to what the
real story is, what the exposures are, and what Enron will do to
rectify the situation.
``Until Enron gets out there to explain what the facts are
and what they are going to do about it, you could see a
continuation of these problems.
``The market is dealing with an information vacuum of the
company's own making. In the face of that uncertainty, it looks to
me like there are more and more people bailing out.''
On S&P's Negative Outlook:
Traders see differences between the terms ``negative
CreditWatch'' and ``negative outlook,'' he said.
``I consider both to be serious indications that there is a
chance the rating is going to be downgraded, and I wouldn't
hesitate, if it were justified, to downgrade Enron off a negative
outlook. It is just as likely from a negative outlook as from a
negative CreditWatch.''
``CreditWatch is tied much more to an event.''
``Negative outlook should be sending just as serious a signal
as a negative CreditWatch would.''
On Counterparty Exposure:
``I fully expected'' counterparties to cut back their
exposure. ``It doesn't mean they are doing less business or are
shying away from Enron on concerns they won't get paid. Prudent
credit practices would dictate to any of these marketers that they
have to pay attention to what their exposure is to Enron at any
given time.''
There won't be ``any real short-term or long-term damage to
the franchise value of Enron's marketing and trading business as
long as everything gets fixed, and they get past this current
situation and have the opportunity to deal with their credit
quality in the long run, then there isn't any long-term
implication or any real significant impact on their ability to
remain the market leader there.''
``The credit extended to Enron by its counterparties is
something that Enron looks at day to day.''
``We have no indication that'' firms have stopped dealing
with Enron, but if that happened, ``the situation could get
serious.''
On the Possibility of Being Downgraded to Junk:
It is still a ``fairly remote possibility'' at this time that
Enron could lose its investment grade credit rating, he said.
``They have plenty of liquidity in the short-term that will get
them through the current situation.''
``There is a credible case to be made that'' there are
actions management has ``to take to restore the balance sheet to
investment-grade quality. Management is both willing and able to
take the steps necessary to do that. There's a really good chance
that if they can get through this period of uncertainty, they'll
be able to accomplish that.''
On Off-Balance Sheet Exposure:
``I don't think anybody has a good handle on exactly what the
shortfall might be there on all those vehicles. Part of the
company's responsibility at this point is to make the case to
rating agencies and outside investors and to all interested
parties, to lay out the facts, give assurances that there aren't
more surprises, that there is value in the assets there, and
should those assets fall short of the obligations, the willingness
to issue equity to make up that shortfall is there.''
--Liz Goldenberg in the New York newsroom at (212) 893-3940
Enron Fails to Get Funds From Institutional Investor, WSJ Says
2001-10-31 05:48 (New York)
Houston, Oct. 31 (Bloomberg) -- Enron Corp. tried to get
financing from at least one institutional investor and was turned
down, the Wall Street Journal reported in its ``Heard on the
Street'' column, citing a person familiar with the situation.
Enron was rejected because of uncertainties regarding its
finances. Late yesterday, the company's bankers were finishing
work on a new credit line of more than $1 billion, according to
people close to the discussions.
General Electric Co.'s GE Capital, Berkshire Hathaway Inc.
and Royal Dutch Petroleum Co. are considered potential buyers for
at least part of Enron, whose stock has fallen to 10-year lows and
is now trading at about book value, the paper said.
An Enron spokesman wouldn't comment on the possibility of a
takeover or whether the company had approached prospective
investors, the paper reported.
Takeover Talk Can't Halt Enron Stock Plunge.
10/31/2001
The Oil Daily
(c) 2001 Energy Intelligence Group. All rights reserved.
Not even rumors of an impending buyout offer could stop the meltdown in Enron common stock on Tuesday.
Enron shares fell $2.65 to close at $11.16/share Tuesday in spite of reports that either BP, General Electric, or Royal Dutch/Shell was about to make a bid for the battered natural gas and power trading giant.
"I've heard all the rumors since Enron stock was in trouble the last time four years ago, and I don't put any credence in them," said Carol Coale, a natural gas analyst for Prudential Securities in Houston. "I would question why anyone would want to buy Enron when we don't know what the equity side of the balance sheet is."
Coale predicted that the stock could fall to the $10-$11/share range before stabilizing. That is the range she estimates for Enron's current book value, the worth it assigns to its assets. At the end of the second quarter, the book value was more than $13/share, she said.
The rumors apparently originated on various internet bulletin boards.
Enron stock has fallen more than 60% since third-quarter financial results showing a $1 billion asset write-down, a $632 million net loss, and a $1.2 billion charge to equity were disclosed two weeks ago (OD Oct.17,p1). While various charges against earnings had been expected, the equity issue had not been revealed previously. Investors and analysts were livid that Enron had not honored its pledge to be more open and transparent about its financials.
The equity charge was related to the termination of two off-balance-sheet financing vehicles that had been headed by Enron's former chief financial officer, Andrew S. Fastow, at the same time he was a corporate officer. Since then, investors have filed multiple lawsuits charging Enron's management with conflicts of interest and failure to perform fiduciary duties. Fastow resigned last week (OD Oct.25,p2).
Another factor driving the stock down further was the US Securities and Exchange Commission's decision to transfer an informal inquiry into the Fastow situation to Washington, D.C., from Houston. The agency has not changed the status of the matter to an investigation.
This week the company has been dealing with liquidity issues as it tries to arrange a new line of credit to augment the $3 billion it drew down from existing financial arrangements last week.
Enron Vice President Mark Palmer told Oil Daily that several parties in crude and refined products trading had asked Enron to renegotiate credit terms, which the company will do. Those commodities represent only about 2% of Enron's total trading book.
Natural gas and electricity make up around 98% of the company's business, and those products "are trading as usual," he said.
Barbara Shook.
(c) Copyright 2001. The Oil Daily Co.
For more infomation, call 800-999-2718 (in U.S.) or
202-662-0700 (outside U.S.).
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Oct. 31, 2001
Houston Chroncile
Big volume, big drop for Enron shares
Shares of troubled energy trader Enron Corp. followed the rest of the market Tuesday, closing down 19 percent at $11.16, its lowest level since 1992. Trading volume was high at 42.7 million shares, 47 percent more than any other stock on the New York Stock Exchange.
Enron has lost more than $17 billion in market capitalization in the past two weeks after a third-quarter earnings release that revealed deep losses caused in part by murky off-balance-sheet deals. Those deals, with partnerships run by its former chief financial officer, led to a U.S. Securities and Exchange Commission inquiry and a lower credit rating by one rating agency.
On Tuesday, Prudential Securities analyst Carol Coale issued a report that said the stock price could fall as low as $9 since the company may need to sell $6 billion in assets at a 20 percent discount in order to keep other credit-rating agencies at bay. That could result in the issue of 120 million more shares, she said.
Coale also took note of speculation that Enron may be a takeover target but said such an attempt would most likely be made after the SEC inquiry is complete. SEC officials confirmed Tuesday that the inquiry has been moved from its Fort Worth office back to its New York headquarters.
"While we continue to believe that Enron is a going concern and that it will avoid losing its investment-grade credit standing by selling assets and issuing stock, we believe that the market will treat it as a credit risk," Coale said.
That could change when the company provides more details on its financing partnerships and secures new lines of credit from banks. News of the credit lines is expected today.
Bottom of Form 1
October 31, 2001
RECKONINGS
The One-Eyed Man
By PAUL KRUGMAN
New York Times
Somewhere I read that to really understand legislation you have to look for the clause giving special consideration to one-eyed bearded men with a limp - that is, you have to look for the provision that turns a bill ostensibly serving a public purpose into a giveaway for some special interest.
Most of the commentary about the "stimulus" bill passed by the House last week focuses on the huge benefits it lavishes on giant corporations. But that doesn't tell us much about the specific interests being served. What's good for corporate America is good for General Motors; it would be hard to devise a bill that consists mainly of corporate giveaways without giving a lot of money to the biggest companies. To understand what the bill is really about, you have to look at the big payoffs to not-so-big companies.
One piece of the bill is custom- designed to benefit a small group of multinational financial firms. Another is clearly there for the sake of certain health insurors. But the most remarkable thing is how much of the benefit from repeal of the alternative minimum tax - a measure that is also included in the Bush administration's supposed stimulus plan, and which seems to be one of the administration's key priorities - goes to companies that are not all that big.
For example, it's not too surprising that calculations by Citizens for Tax Justice show General Motors, with its 380,000 workers, getting a check for $800 million. But it's quite amazing that TXU (formerly Dallas Power and Light), a company with only 16,000 employees, would get a check for $600 million. And there are a number of medium-sized companies that, like TXU, are in line for surprisingly big benefits. These companies include ChevronTexaco, Enron, Phillips Petroleum, IMC Global and CMS Energy. What do they have in common?
Well, they tend to be in the energy or mining businesses; and they tend to be based in or near Texas. In other words, the one-eyed bearded man with a limp looks a lot like Dick Cheney.
There is almost certainly a lot of overlap between the companies that would derive large benefits from alternative minimum tax repeal and those that would have received large subsidies under the energy plan devised by Mr. Cheney's task force. You may remember that the administration, in apparent defiance of the law, refused to make the records of that task force's meetings available to Congress; that's one of those issues that seems to have been dropped after Sept. 11.
And I guess it's superfluous to point out that the big winners in all this seem to be companies that gave large, one-sided donations to the Republican Party in the last election. (This is not to suggest that Democrats are any less susceptible to the influence of money.)
To me, the story of the Bush administration is starting to look like the plot of "Victor/Victoria." First we had a candidate who was supposed to be a moderate. Then we learned, or thought we learned, that this was a mask; he was really a hard-line conservative who pretended to be a moderate in order to gain office.
But the latest economic proposals from the administration, like the Cheney energy plan, don't look as if they came from serious free-marketeers. They don't make sense in terms of either demand-side or supply-side economics, but they do give a lot of money to certain companies. So maybe ideology was just another mask for someone who was really the candidate of corporations - not corporations in general, but a small group of companies with a quite specific set of business interests - and who is only pretending to be a hard- line conservative who pretended to be a moderate in order to gain office.
It's an interesting and all too plausible picture. But it's a picture that most people will never see on their TV, and that many people would refuse to accept no matter how strong the evidence. That, of course, is what makes the whole thing possible. In the land of the blind, the one- eyed bearded man with a limp is king.
In last Wednesday's column I said the "original" war bonds were issued during World War II. In fact, war bonds were also issued during the Civil War and World War I. I don't think this affects the argument.
Deal Sense
After the bubble - Tuesday
by Ed Paisley
10/31/2001
The Daily Deal
Copyright (c) 2001 The Deal LLC
When bubbles burst, glimpses into the inner workings of deals often follow. The Internet bubble is proving no different.
At first glance, there doesn't seem to be a lot in common between embattled online energy trader and broadband telecom wannabe Enron Corp. and the MeVC Draper Fisher Jurvetson I Fund, a New York-listed closed-end venture capital fund.
Yet Enron and Draper, Fisher Jurvetson not only epitomize a new-economy thinking that's gone awry but a kind of insider excess that was characteristic of those now-departed go-go years.
Enron's shares have been falling since the markets began to recognize the dangers of its plans to shed real assets to try its hand at selling broadband capacity alongside its big online energy trading business. Similarly, the MeVC Draper Fisher Jurvetson Fund I ? a retail fund that took the Draper Fisher name but that wasn't run by the Silicon Valley VC ? now trades at a 42% discount to its net asset value since its much-ballyhooed launch in 2000.
Enron thought the Internet would revolutionize its business, and it did ? by further commoditizing the energy products the company sold. DFJ thought that venture capital itself could be commoditized and branded, and then peddled to retail investors eager to pan for Internet gold dust.
Neither strategy worked; both failed to account for the risk in a changing economic climate.
Today, Enron finds itself a huge player in online energy trading and a struggling startup in a battered telecom industry, strategic shifts that could well threaten its survival. The Houston company is making the rounds with bankers trying to secure a lending line large enough to avoid yet another potentially crippling credit downgrade.
DFJ engineered a truly top-of-the-bubble move into the VC "space," franchising the firm's name to another band of VCs so that they could list a retail fund on the New York Stock Exchange. Closed-end funds rarely succeed in the best of times; mixing VC and the closed-end fund formula just as the Internet economy deflated proved even more problematic.
But while MeVC's investors are surely out of pocket, DFL itself is still pulling in handsome management fees. MeVC Advisers Inc. and sub-adviser The Draper Fisher Jurvetson MeVC Management Co. earn a 2.5% advisory fee and 20% incentive fee from its franchisee. High fees paid to various advisers are hardly unknown in Silicon Valley, where institutional investors and pension funds know the risks and are willing to pay the price to play. But MeVC Draper Fisher Jurvetson Fund I was always meant to go to retail investors (with the obligatory SEC disclosures about risk and the fund's fees buried high up in the prospectus) who are, presumably, not as sophisticated.
Enron, of course, also chose to bury the cost of its dealings with its own executives in an SEC filing. The hefty fees paid to Enron executives to manage the risk of its new online trading strategy cost Enron CFO Andrew Fastow his job last week.
When bubbles burst, glimpses into the inner workings of deals often follow. The Internet bubble is proving no different.
www.TheDeal.com
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
PGE's financial loss first in years
10/31/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.
PORTLAND, Ore. (AP) - Saddled with surplus power, Portland General Electric posted a $5 million loss for the third quarter.
PGE recorded a total of $905 million in sales, but that didn't make up for high-priced electricity and an unpredictable wholesale market.
"Fuel costs and purchased power really ate away at net income," said Scott Simms, a utility spokesman.
Until recently, PGE had benefited from a surge in wholesale electricity prices, which hit the West in the spring of 2000. But earlier this year wholesale prices plummeted, electricity shortages eased and PGE found itself with surplus power it no longer could sell for a gain.
PGE officials say they can't remember the last time the utility had recorded a quarterly loss.
A third-quarter jump in expenses clearly showed through in PGE's financial report. The utility spent a record $814 million for wholesale electricity and fuel, compared with $523 million for the year-ago period when energy shortages and skyrocketing power costs first began showing up in financial reports.
During the third quarter of 1999, a time of relative stability for energy markets, PGE spent $241 million for electricity and fuel.
PGE owns power plants capable of meeting roughly half the demand of its 730,000 residential and business customers. It buys the rest of its electricity on wholesale markets.
A subsidiary of Houston-based Enron, the utility serves more Oregon customers than any other utility. Its territory covers most of the populous northern Willamette Valley.
PGE attributed the recent steep drop in electric power prices to federal price controls, mild summer weather, added generation from new power plants, a fall in natural gas prices and conservation.
Drought conditions, which forced PGE to rely more heavily on natural gas-fired power plants rather than hydroelectric generation, further increased the utility's costs, PGE reported.
PGE disclosed its third-quarter loss in a filing late last week with the Securities and Exchange Commission. The utility will submit its full quarterly report in mid-November.
Consistent gains PGE had posted a steady stream of quarterly gains at least since 1992, according to utility records.
Large rate increases, effective Oct. 1, are expected to generate an additional $400 million annually and push earnings back into positive territory. Utility officials say the extra revenue will be used almost entirely for electricity and fuel purchases.
Several business and consumer groups have objected to the Oct. 1 increases and have asked the Oregon Public Utility Commission to re-evaluate the decision that put the new rates into effect.
Regulators will decide by Nov. 23 whether to reconsider their decision.
Portland-based Northwest Natural Gas also is closely watching PGE's situation. NW Natural on Oct. 8 announced plans to buy PGE from Enron for almost $3 billion in cash, stock and assumed debt.
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
`Enron buy-out offer highly over-priced'
Seema Kamdar
10/31/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)
MUMBAI: Energy analysts and anti-Enron activists have criticised the reported move by Indian financial institutions to buy out Enron's exposure to the tune of $1.3 billion at a 30 per cent discount.
A recent report suggested that a consortium of financial institutions led by the Industrial Development Bank of India, which is also the lead banker for the project, was negotiating picking up Enron's exposure in the project at a 30 per cent discount.
The reported pay-out for Enron's stake in the Dabhol Power Company is grossly in excess of what the Madhav Godbole Committee had recommended.
Contending that the offer was highly over-priced, convenor of the Enron Virodhi Andolan, Pradyumna Kaul, said, ``Enron, along with General Electric and Bechtel, has an equity stake of $900 million and a bridge loan of $300 million, which takes their total exposure to over $1 billion. The Godbole committee had recommended in its renegotiation report a five-year moratorium on all loans and a discounting of Enron's equity to $250 million.''
The state government had accepted this formula while the Centre has talked in terms of paying $500 million. ``All these computations are much lower than the $700 million to $800 million that the financial institutions are willing to pay,'' he said.
Mr Kaul said an independent study commissioned by his NGO had suggested a formula much different from what Enron is hoping to negotiate. ``Out of the $3.1 billion project cost, the study says $1 billion can be written off. Half of this capital cost restructuring would come from writing down equity.''
To the argument that Indian FIs would lose out if they wrote off such huge amounts, he said, ``Here, we are talking of writing off about Rs 5,500-6,000 crore out of Rs 13,000 crore. In the capital restructuring in the steel sector, amounts of about Rs 20,000 crore were recently written off,'' he asserted.
Abhay Mehta, author of `Power Play', an expose of the Enron deal, said, ``If the FIs think they have evaluated Enron's stake fairly, it is a matter of grave concern.''
An analyst with the Prayas Energy Group, Shantanu Dixit, questions the validity of Enron's insistence that it should be paid even for its ``development expenditure''. ``It has factored in $200 million on this count. But this amount was spent before the project went online. How can that be clubbed with the project's capital cost?'' he said.
``The fundamental issue is where did they spend this money. This claim is of a piece with Enron executive Linda Powers' statement that the company spent $20 million on educating Indians,'' Mr Dixit said.
It is learnt that IDBI is not too happy with Enron's inclusion of $200 million as development expenditure and $140 million as earnings to be retained, in its tally of $1.3 billion.
``Against this figure, the 30 per cent discount is notional,'' a source said. ``Without these two add-ons, there is simply no discount,'' he pointed out.
Another analyst who has followed Enron closely says that by no stretch of imagination can development expenditure be so high. ``The big question here is how Enron has managed to inflate its cost? The Kirit Parikh committee had claimed to have brought down the costs of the project from $2.8 billion to $2.5 billion. But Enron overshot the original estimate of $2.8 billion by another $300 million. What is the explanation for this and why should financial institutions pay for it?'' he said.
A Mantralaya official pointed out that a related issue was the future of the LNG shipping company, Greenfield, floated by Enron to build a ship to supply fuel to Dabhol. Enron had a 30 per cent stake in it and the Shipping Corporation of India had a 40 per cent stake. ``It has refused to pay its $11 million equity in that venture,'' he said.
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Indian lenders to Dabhol to meet power secretary today
Our Economy Bureau NEW DELHI
10/31/2001
Business Standard
3
Copyright (c) Business Standard
The urgency to resolve the Dabhol power project imbroglio has gathered momentum with the Indian lenders to the project meeting senior officials in the power ministry tomorrow.
Sources said that the Indian lenders led by IDBI chairman P P Vora would brief power secretary A K Basu on the progress in talks with prospective buyers, BSES Ltd and Tata Power, for the foreign stake in the project. The lenders will also discuss the roadmap for revival of the project.
Vora is also slated to meet top Enron officials in London later this week to discuss possible solutions for breaking the deadlock. Tata Power and BSES have already held parleys with the Indian institutions to pick up 85 per cent foreign equity in DPC.
Meanwhile, sources said that IDBI, ICICI and SBI have agreed to take over IFCI's share of guarantee as had been proposed by Japan Bank for International Cooperation (JBIC).
JBIC had also sought an acceleration in the payment of foreign loan which IDBI is negotiating. Indian lenders have also agreed to pay the loan taken by DPC from JBIC and Japan's ministry for international trade and industry which has been due since October 1.
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Enron Queried by SEC on Debt, Partnership in 1998 (Update1)
2001-10-30 19:57 (New York)
Enron Queried by SEC on Debt, Partnership in 1998 (Update1)
(Adds new CFO in eighth paragraph.)
Houston, Oct. 30 (Bloomberg) -- Enron Corp. was asked by the
Securities and Exchange Commission in 1998 to explain its
finances, including a partnership designed to take debt off its
books, according to an SEC letter.
The 23-page document included 138 questions that asked about
the Jedi II partnership, Enron cash flows, hedging policies and
accounting for energy reserves. The agency this month began to
probe Enron's relationship to limited partnerships run by former
Chief Financial Officer Andrew Fastow.
``The 1998 questions are pretty much the same disclosure
issues that we are hearing about today, just different deals,''
said John Gavin, president of Plymouth, Minnesota-based SEC
Insight, a private research company that obtained the letter
through the Freedom of Information Act.
SEC Insight provided a copy of the letter to Bloomberg News.
Enron Chief of Staff Steve Kean said the letter is from the SEC's
corporations and finance division, which he said regularly sends
questions to companies about the form and content of their
corporate filings.
``This is a quite common,'' Kean said. ``I'm sure that if you
did Freedom of Information Act requests for other large companies,
you would find similar letters with lengthy commentary.'' He said
``you can't really make a connection'' between the letter and the
current SEC inquiry.
Fastow Fired
SEC spokesman Michael Robinson declined to comment on whether
the agency questioned Enron in 1998 or 1999, and wouldn't confirm
or deny that letters to Enron were sent.
Enron shares fell for a 10th straight day, tumbling 19
percent after touching their lowest level in nine years. Moody's
Investor's Service placed the energy company's commercial paper
rating on review for downgrade and lowered its long-term debt to
two notches above junk status.
The stock dropped $2.65 to $11.16. Enron fired Fastow
Wednesday, the day after Enron disclosed the SEC had started an
inquiry into two partnerships formed in 1999. Transactions with
those partnerships cost Enron $35 million in the third quarter and
reduced shareholders' equity by $1.2 billion. Enron promoted Jeff
McMahon, head of the industrial markets unit, to CFO.
In its most recent inquiry, the SEC has asked Enron about the
two partnerships, LJM Cayman and LJM2 Co-Investment, that were run
by Fastow and dealt in Enron assets and shares.
The SEC has moved that inquiry to its Washington from its
offices in Fort Worth, Texas, a person familiar with the inquiry
said.
Enron has formed dozens of affiliated companies to buy assets
such as power plants. Investors have been pressing Enron for more
details on the affiliated companies because some of them bought
company assets with borrowed money Enron will have to pay back if
the affiliates can't.
Partnership Questioned
The workings of one affiliated company, Jedi II, stumped the
SEC in 1998.
The agency asked Enron to ``either explain or cross reference
to discussion'' a fuller description of Jedi II. The company's
annual report to the SEC for 1998 lists Jedi, or Joint Energy
Development Investments LP, as an ``unconsolidated affiliate.''
Enron owned 50 percent of the company, the filing says.
Fastow, Treasurer Ben Gilsan, President Greg Whalley and nine
other Enron executives are listed on Texas secretary of state
records as officers or partners of Jedi II. Enron has said in
recent days that employees listed as officers of affiliates do so
to represent Enron's interests and receive no compensation for
that role.
--Russell Hubbard in the Princeton newsroom at 609-750-4651
Enron Probe Is Moved to SEC's Head Office From Texas (Correct)
2001-10-30 18:52 (New York)
Enron Probe Is Moved to SEC's Head Office From Texas (Correct)
(Corrects to $35 million the cost of financial dealings with
affiliate in fifth paragraph.)
Washington, Oct. 30 (Bloomberg) -- The Securities and
Exchange Commission, by transferring a probe of Enron Corp.'s
finances from Texas to Washington, may be handing the case to a
task force of enforcement lawyers and accountants, a former SEC
counsel said.
The case was moved from the agency's Forth Worth district
office, a person with knowledge of the inquiry said. The transfer
was reported earlier today by the Wall Street Journal. An SEC
spokesman declined to comment, citing the agency's refusal to
discuss any investigation. Hal Degenhardt, administrator of the
Fort Worth office, didn't return a phone call.
The SEC set up the accounting task force in Washington about
18 months ago, saying the unit's goals were to bring accounting-
related cases more quickly and to deal with complicated or novel
accounting issues. Under former Chairman Arthur Levitt, who left
the commission in February, the SEC declared accounting fraud to
be its top enforcement priority.
``It's possible that the SEC decided that it wanted that
group to handle the case,'' said Christian Mixter, a partner with
Morgan Lewis & Bockius in Washington and former SEC chief
litigation counsel.
Last week, Houston-based Enron ousted Chief Financial Officer
Andrew Fastow, after saying the SEC had sought information about
Enron's financial dealings with affiliates, run by Fastow, that
cost the largest energy trader $35 million.
The SEC's headquarters staff has more enforcement
investigators with accounting expertise than do its regional and
branch offices, lawyers said.
Accounting Investigators
The district offices ``are principally engaged in
investigating broker-dealer, investment-adviser and offering
violations,'' said John Sturc, a partner at the Gibson Dunn &
Crutcher law firm and former SEC associate enforcement director.
``While a few of them have the staff to investigate accounting
issues, generally the depth of experience is in the headquarters
office.''
The SEC staff has opened investigations of dozens of large
companies, including Xerox Corp., ConAgra Foods Inc. and Lucent
Technologies Inc., that still are pending. As of mid-July, the SEC
was conducting about 260 accounting-fraud investigations,
including about 40 probes of large companies.
SEC Chairman Harvey Pitt last week said the SEC will shift
its main accounting focus more toward improving financial
disclosure than prosecuting corporate financial fraud. ``I'm more
concerned about protecting investors before violations occur,''
Pitt said in an interview.
Enron shares fell 19.2 percent today, after Moody's Investors
Service yesterday placed the company's rating for commercial paper
on review for downgrade and lowered its long-term debt to two
notches above junk status. Enron stock has plunged almost 46
percent since it disclosed the SEC's inquiry, and fell $2.65 today
to $11.16.
--Vicky Stamas in Washington at (202) 624-1958
USA: NYMEX plans to start OTC natgas clearing services.
10/30/2001
Reuters English News Service
(C) Reuters Limited 2001.
NEW YORK, Oct 30 (Reuters) - The New York Mercantile Exchange (NYMEX) said on Tuesday it plans to offer credit intermediation through clearing services and trading tools to the over-the-counter (OTC) natural gas market.
The plan includes launching exchange of futures for swap (EFS) transactions and large order executions to the natgas futures market within the next few weeks, adding to its previously announced electronic trading of cleared natural gas swaps and basis contracts.
"Recent events in the natural gas market have served to reinforce the necessity of counterparty credit risk management and have accelerated the Exchange's plans to introduce a full array of risk management tools under the umbrella of our clearinghouse," NYMEX President J. Robert Collins said in the statement.
A swap is an unregulated contractual agreement between two parties which involves a guaranteed fixed price on an underlying commodity for a set period of time that is later settled in cash.
Traders said the NYMEX announcement was well-timed in light of credit concerns swirling in the gas market following Enron's recent stock plunge.
Houston-based Enron Corp. , the biggest U.S. natural gas and electricity trading house, saw its shares slump 19 percent Tuesday to $11.16, their lowest level since 1992.
NYMEX said $500 million will be available as a guarantee to participants on each of the Exchange divisions through a fund backed by exchange clearing members, nearly eliminating credit risk between individual parties.
EFS transactions - similar to exchange of futures for physical (EFP) transactions - allow two parties to privately negotiate an integrated OTC swap and related futures transaction priced according to their own mutual terms.
The transaction must involve approximately equal but opposite side-of-market quantities of futures and swap exposures in the same or related commodities and will be permitted until two hours after trading terminates in the underlying futures contract.
EFS transactions will be permitted to liquidate, initiate, and transfer futures market positions between the two parties involved in the transaction.
The clearing member representing each party will be responsible to notify NYMEX of the amount and type of futures contracts involved, the price at which the futures transaction should be cleared, and the identity of the parties involved.
NYMEX will also start letting traders execute block trades of 250 natural gas futures contracts or more in the first two nearby months at the best bid or offer for that size. These trades will not be permitted during the closing range.
The exchange said that early next year it will launch a cleared Henry Hub natural gas swaps contract, providing the marketplace with direct clearing on the most popular energy swaps contract over the last several year.
As part of this move, NYMEX said it will clear OTC-executed transactions through its EFS mechanism.
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
USA: UPDATE 3-Enron shares plunge 19 percent, hit 1992 levels.
By C. Bryson Hull
10/30/2001
Reuters English News Service
(C) Reuters Limited 2001.
HOUSTON, Oct 30 (Reuters) - Shares of Enron Corp. dropped 19 percent to their lowest level since 1992 on Tuesday, amid fears of a credit crunch and persistent investor concerns over its silence about the energy giant's finances.
The stock was the most active by far on the New York Stock Exchange as the biggest trader of natural gas and power in North America suffered another rout in its 10th straight day of losses.
Houston-based Enron has shed more than $17 billion in market capitalization in the past two weeks amid a series of disclosures about murky off-balance-sheet deals with partnerships run by its then chief financial officer.
The disclosures destroyed the stock, forced the ouster of CFO Andrew Fastow, led to a U.S. Securities and Exchange Commission conflict-of-interest inquiry and have caused at least one credit rating agency to slash Enron's senior-debt credit status.
Enron stock closed down $2.65 to $11.16 in trading volume of 42.7 million shares, a good 47 percent more than the next most active stock on the NYSE.
The shares crossed the $12 threshold in the morning for the first time since January 1993, then repeatedly tested the $11 barrier throughout the session before touching a low of $10.95 shortly before the close - its lowest level since July 1992.
"This Enron situation is unique, and uniquely bad. The inability of the management to make a satisfactory response to all these claims and innuendoes has caused a mighty run on the stock for these past few weeks," said Sanders Morris Harris analyst John Olson.
"I for one am at a loss to explain their reticence to respond."
Enron said it was working to address its credibility gap.
"We have heard the criticism loud and clear and we have made a commitment to change those perceptions. (Chairman and Chief Executive Officer) Ken Lay and everyone else on this management team has made it their priority to bring investor confidence up to the strong level of our core business," Enron spokesman Vance Meyer said.
FOCUSING ON NEAR-TERM
One analyst suggested that Enron was focusing management firepower on clearing the SEC inquiry and securing new credit lines from its banks to address the concerns of the credit rating agencies.
"They're focused on those two things, and I think if they successfully do those things they will find they will not be downgraded below investment grade," Commerzbank Securities analyst Andre Meade said.
If Enron's credit drops below investment grade at current stock levels, it would be forced to issue more shares and further dilute the stock. Worse, Meade said, it would drastically increase Enron's cost for trading, as counterparties demand more cash and guarantees for deals.
Olson said the stock price was irrationally low, even assuming a conservative valuation of Enron's businesses at 14 times estimated 2001 earnings per share of $1.81.
The company's core trading business is worth about $23 per share at those levels, Olson said. The total company, even accounting for losses from the failing broadband business, is worth about $27 now as opposed to $37 two weeks ago, he said.
After cutting Enron's rating on Monday, Moody's Investors Service warned it could lower the rating even further, as well as cut Enron's short-term debt status. The cut coincided with Enron's confirmation that it was seeking additional credit lines to increase its liquidity, after tapping its full $3.3 billion revolving credit line last week.
Enron has seen its credibility demolished as it has given piecemeal answers about its involvement in financial partnerships so complex as to confound even seasoned financial analysts who make their living unraveling earnings statements and balance sheets.
Fastow was general partner in two partnerships, which paid him millions in management fees, that did business with Enron. They caused a $1.2 billion loss in shareholder equity after Enron was forced to repay the partnerships with stock once their investments, many into broadband, soured.
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Enron's stock continues tumbling after investigation reportedly moves to Washington
10/30/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.
HOUSTON (AP) - Enron Corp.'s stock plummeted to a nine-year low on Tuesday, pushed down in part by reports that an investigation by the Securities and Exchange Commission moved to the agency's headquarters in Washington from a regional office in Fort Worth, Texas.
Shares of Enron, the nation's largest natural gas and power marketer, fell $2.65, or by 19 percent, to $11.16, a level not seen since 1992.
Enron's stock price decline steadily from nearly $85 at the beginning until the middle of October, when the company reported earnings and serious questions about its fiscal health were raised.
Since reporting a disappointing quarterly losses on Oct. 16, Enron has been negotiating with banks to establish new credit lines and has been surrounded by turmoil because of losses stemming from partnerships managed by the company's former chief financial officer.
The partnerships have raised concerns about a potential conflict of interest and touched off an inquiry by the SEC.
The Wall Street Journal reported Tuesday the SEC investigation has been moved to the agency's Washington office.
Analysts say the change was interpreted to mean the investigation is more serious than originally thought.
"I would imagine that (the falling stock price) must be attributed to the SEC shift in venue. That is today's goblin" with Enron's stock price, said Robert Christensen, an analyst with FAC/Equities in New York.
Enron officials did not immediately return messages left Tuesday by The Associated Press. SEC spokesman Michael Robinson declined comment and would not confirm or deny the investigation had been moved.
Shares of Enron were sacked by more than 10 percent on Monday after Moody's Investors Service downgraded the company's long-term debt and warned of possible further downgrades.
Enron reported a net loss of $638 million in the third quarter, taking a one-time charge of $1.01 billion attributed to investment losses, troubled assets and unit restructurings.
Enron's stock has dropped ever since as it became apparent some of those losses were tied to partnerships managed by Enron's former chief financial officer, Andrew Fastow, who was ousted last week.
The company last week decided to cash in about $3 billion in revolving credit it has with various banks to shore up investor confidence.
Christensen said it's premature to discuss any possibility that Enron could be taken over if its current financial woes don't improve.
"A vote of confidence by an outside financial institution, a commercial bank or two extending them additional credit and or a white knight investor stating that they have reviewed the basic book of business of this company and that it's OK would work wonders," Christensen said.
Christensen said Enron's core business model of energy marketing is a very good one.
"The sidelines and hobbies Enron was attracted to in the last five years have come home to roost but its basic business function appears to be valid," he said.
Christensen said other energy companies, whose stock prices have suffered because of the Enron tumult, do not appear to be hurt by what has been happening to Enron recently.
---
On the Net:
http://www.enron.com
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. | {
"pile_set_name": "Enron Emails"
} |
---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 02/05/2001
02:03 PM ---------------------------
Greg Napiorkowski <[email protected]> on 02/05/2001 12:35:21 PM
To: "'[email protected]'" <[email protected]>
cc:
Subject: RE: Czesc
Wicku,
Oczywiscie, ze sie spotkam z radoscia i przyjemnoscia.
Sporo czasu minelo od czsu, gdy sie ostatni raz widzielismy.
W gre wchodzi praktycznie czwartek wieczorem. W srode sie przeprowadzam,
a w piatek lece do NJ o 21:30.
Moj telefon: 408-855-0263.
Na razie,
Grzegorz
-----Original Message-----
From: [email protected] [mailto:[email protected]]
Sent: Monday, February 05, 2001 10:29 AM
To: [email protected]
Cc: [email protected]; [email protected]
Subject: Czesc
Grzegorz,
Ludmila doniosla mi, ze pracujesz w Kalifornii.
Bede w Berkeley w srode i w Palo Alto w czwartek i piatek.
Czy masz czas, by spotakc sie na obiad/lunch/kawe?
Pozdrowienia
Wicek | {
"pile_set_name": "Enron Emails"
} |
Below are the details to the ENA Trading Track Dinner
When: Tuesday, October 16, 2001
Location: Grappino's Wine Room - above Nino's Restaurant
2817 West Dallas
713-522-5120
Time: 6:00 p.m. Mix & Mingle with drinks
6:45 p.m. Dinner
For those of you who have not confirmed, please do so as soon as possible.
Thank You,
Felicia L. Solis
Enron Wholesale Services
713-853-4776 | {
"pile_set_name": "Enron Emails"
} |
---------------------- Forwarded by Eric Bass/HOU/ECT on 11/28/2000 09:31 AM
---------------------------
"Brian Hoskins" <[email protected]> on 11/28/2000 09:27:32 AM
To: [email protected], [email protected], [email protected],
[email protected], [email protected], [email protected], [email protected],
[email protected], [email protected], [email protected],
[email protected], [email protected], [email protected],
[email protected], [email protected], [email protected],
[email protected], [email protected], [email protected],
[email protected], [email protected], [email protected],
[email protected], [email protected], [email protected]
cc:
Subject: The Grinch
More election humor...
______________________________________________________________________________
_______
Get more from the Web. FREE MSN Explorer download : http://explorer.msn.com
- Grinch1.jpg | {
"pile_set_name": "Enron Emails"
} |
Due to system high pressure and inventory balancing, PG&E Gas
Transmission-Northwest is limiting the Kingsgate capacity to 2335 MMcf/d
effective Gas Day Thursday, May 10, beginning with the Intraday 1 cycle.
If you have any questions, please call our transportation coordinators at
(503) 833-4300.
PG&E National Energy Group and any other
company referenced herein that uses the PG&E name or
logo are not the same company as Pacific Gas and
Electric Company, the regulated California utility. Neither
PG&E National Energy Group nor these other
referenced companies are regulated by the California Public
Utilities Commission. Customers of Pacific Gas and Electric Company
do not have to buy products from these companies in order
to continue to receive quality regulated services from the utility. | {
"pile_set_name": "Enron Emails"
} |
Li,
I shall take care of it Thursday.
Please, call me at the end of the day.
Vince
Li Xiao@ENRON
06/27/2000 11:31 AM
To: Vince J Kaminski/HOU/ECT@ECT
cc:
Subject: loan recommendation form
Hi, Vince,
I was told by Molly that she hasn't received the recommendation form from you
yet.
Since I got admission late from the school, now I am short of time of getting
I-20 which needs loan approval,
and getting visa status transferred (from H-1 to F-1) which requires I-20 and
loan approval
and normally takes around 45 days through INS (Immigration Naturalization
Service).
Now, I am trying to push every step to speed up the process in order to
catch up the school opening at beginning of Sept.
I know I just told you this late last week. Nevertheless, I am writing to see
if you can squeeze some time to finish the recommendation form anytime soon.
It will be a big help.
Thank you very much, Vince.
Have a good day.
Sincerely,
Li x39635 | {
"pile_set_name": "Enron Emails"
} |
TODAY: Equity research columnist Dave Sterman discusses what investors
might take from news concerning network bellwether Cisco (CSCO),
John Filar Atwood looks for valuable ideas among the debris of
the telecom stock scene, and columnist Ben Mattlin writes about a
trio of South Korean telcos.
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Broker reports
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Investment ideas
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1. True value: Strength lurks behind poor valuations
Solid historical performance suggests these equipment stocks may continue to provide value in 2002
by John Filar Atwood, equity research columnist
You really can't blame investors if they would rather just leave
the telecom equipment industry alone until 2003. This year,
communications equipment shipments fell by 22 percent, the
largest single year drop since the 1950s.
With capital spending budgets getting slashed for 2002, analysts
are forecasting another three percent decline in equipment sales
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Investors willing to stick with the industry will have a tough
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2. Outlook 2002: Will price wars scramble wireless?
Investors may have to brace themselves, but service may outpace price in customers' values
By Dave Sterman, equity research columnist
Who'll be the first to blink? Analysts aren't really focused on
this issue yet, but price wars may be looming in the wireless
sector, scrambling the sector and confounding expectations.
Sprint PCS (PCS), Nextel (NXTL), AT&T Wireless (AWE), Verizon
(VZ), Cingular (a joint venture between BellSouth (BLS) and SBC
(SBC)) and VoiceStream (a unit of Deutsche Telecom (DT)) are
close to completing their respective nationwide expansion plans.
That means that consumers in almost every major metropolitan area
now have at least three or four wireless carriers from which to
choose. And that means it won't be too long before these firms
start scrambling to poach each other's customers.
Unless these carriers can show remarkable restraint, price wars
could soon become the dominant theme in the sector.
Click here to read more:
http://www.thetelecommanalyst.com/article.asp?docid=5306&nd=1225
3. 2002 network outlook: All eyes on Cisco (CSCO)
A plethora of smaller companies are nipping at its heels, but all they may get is bone
By Dave Sterman, equity research columnist
What do Juniper Networks (JNPR), Foundry Networks (FDRError!
Hyperlink reference not valid.Y), Extreme Networks (EXTR) and
Riverstone Networks (RSTN) have in common? They all sport a
market capitalization in excess of $1 billion (despite the
massive tech sell-off of the last 18 months), and they all toil
in the looming shadow of Cisco Systems (CSCO).
Although growth investors continually check the pulse of these
other tech upstarts, they can't do research in a vacuum. As goes
Cisco, so goes these networkers.
To be sure, these companies can try and wrest a few points of
market share from Cisco. But if the market for switches and
routers doesn't rebound sharply, share gains will result in only
a minor revenue uptick. And no one has greater visibility into
the direction of the networking market than Cisco. So when Cisco
CEO John Chambers speaks, the sector listens.
Click here to read more:
http://www.thetelecommanalyst.com/article.asp?docid=5288&nd=1225
4. International wires: Korea advancement
Three telcos in Korea are well positioned for long-term growth and attracting analyst interest.
By Ben Mattlin, equity research columnist
A recent report from CLSA Emerging Markets (Dec. 13, 2001) hailed
South Korea as "one of the world's leading telecom markets." The
report cited the rapid growth of both cellular and broadband in
this nation of 50 million, and ended with the rhetorical
question, "Isn't it an obvious market in which to be overweight?"
A quick screening of international telcos with an average analyst
rating of 2 ("buy") or better confirms the assertion; in fact,
there are three companies passing this screen that are based in
South Korea.
Click here to read more:
http://www.thetelecommanalyst.com/article.asp?docid=5235&nd=1225
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Dundee discusses warnings out of Ciena (CIEN) and Lucent (LU) and
the implications for telecom. Also, their outtake on a recent visit to
Nvidia's (NVDA) headquarters, the firm's insight into the future
of wireless, and more. (10-page report for purchase - $25)
http://www.thetelecommanalyst.com/download.asp?docid=25838780&nd=1225
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[email protected] | {
"pile_set_name": "Enron Emails"
} |
Mark -
This looks like a corporate deal. Please let me know if it is something that
I should look over or if it should properly go to Mark Holsworth and his
group.
Mark
Senior Counsel, ENA
Phone: 713-345-8897
Facsimile: 713-646-3940
E-Mail: [email protected]
----- Forwarded by Mark Greenberg/NA/Enron on 04/09/2001 06:41 PM -----
Michelle Cash@ECT
04/09/2001 05:38 PM
To: Mark Taylor/HOU/ECT@ECT, Mark Greenberg/NA/Enron@ENRON, Mark
Holsworth/Enron@EnronXGate
cc: Bob Ward/Enron@EnronXGate
Subject: Microsoft MOU
Hello Marks,
IT passed this term sheet to me for review, but I believe that one of you is
much more qualified to take a stab at it than I am.
Essentially, we are agreeing to beta-test this software. No money is going
to exchange hands, but we may incur travel costs and time in our role in this.
Let me know whether one of you can provide review.
Michelle
------------------------------------------------------------------------------
---------------------------
Michelle Cash
Enron North America Corp.
1400 Smith Street, EB 3823
Houston, Texas 77002
(713) 853-6401
[email protected]
This message may contain confidential information that is protected by the
attorney-client and/or work product privileges.
----- Forwarded by Michelle Cash/HOU/ECT on 04/09/2001 05:34 PM -----
Bob Ward/ENRON@enronXgate
04/09/2001 04:11 PM
To: Michelle Cash/HOU/ECT@ECT
cc:
Subject: Microsoft MOU
Hi, Michelle. Jim Ogg asked me to send you the attached MOU from Microsoft.
The MOU states that it isn,t a legally enforceable agreement but we thought
we should get your opinion before we sign it. Please review it at your
earliest convenience and let me know your thoughts. Thanks.
Bob Ward
Manager, IT - Development
ext. 54409 | {
"pile_set_name": "Enron Emails"
} |
UBS will be holding benefits presentations at 2:00 pm, 3:00 pm and 4:00 pm today in ECS06980. Please encourage your employees to attend if they did not attend on Friday.
Any questions, please let me or Jeanie know.
A | {
"pile_set_name": "Enron Emails"
} |
Start Date: 4/15/01; HourAhead hour: 14; No ancillary schedules awarded.
Variances detected.
Variances detected in Energy Import/Export schedule.
Variances detected in SC Trades schedule.
LOG MESSAGES:
PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final
Schedules\2001041514.txt
---- Energy Import/Export Schedule ----
$$$ Variance found in table tblINTCHG_IMPEXP.
Details: (Hour: 14 / Preferred: 12.00 / Final: 11.98)
TRANS_TYPE: FINAL
SC_ID: ECTRT
MKT_TYPE: 2
TRANS_DATE: 4/15/01
TIE_POINT: PVERDE_5_DEVERS
INTERCHG_ID: EPMI_CISO_LUCKY
ENGY_TYPE: WHEEL
---- SC Trades Schedule ----
*** Final schedule not found for preferred schedule.
Details:
TRANS_TYPE: FINAL
SC_ID: EPMI
MKT_TYPE: 2
TRANS_DATE: 4/15/01
TRADING_SC: SETC
PNT_OF_INTRC: NP15
SCHED_TYPE: ENGY
PURCH_SALE: 1
DEAL_NO: 1
$$$ Variance found in table tblInt_Interchange.
Details: (Hour: 14 / Preferred: 10.00 / Final: 9.97)
TRANS_TYPE: FINAL
SC_ID: EPMI
MKT_TYPE: 2
TRANS_DATE: 4/15/01
TRADING_SC: PGAE
PNT_OF_INTRC: NP15
SCHED_TYPE: ENGY
PURCH_SALE: 2
DEAL_NO: 1 | {
"pile_set_name": "Enron Emails"
} |
Will you please contact them again. SS
Tana Jones
06/14/2000 10:04 AM
To: Sara Shackleton/HOU/ECT@ECT
cc:
Subject: pg&e
We have not yet received the executed documents. | {
"pile_set_name": "Enron Emails"
} |
Steve,
I was informed that Malcom Gillis called you last Friday with some concerns
about EBS' performance. I put calls into the Director of Networks (Ferrell
Gerbode) and his boss (Chuck Henry) on Friday to discuss this. Ferrell
apologized and indicated that Gillis didn't understand the whole picture and
he pushed the panic button without talking to them. I have not received a
call back from Chuck Henry and understand that he is travelling.
The primary bandwidth deal that we did with Rice was re-structured and
delayed until Feb '02 at Rice's request (back in October last year). They
have now requested a small quantity of interim bandwidth to do some testing
between now and Feb '02. EBS was slow to respond to this request (change of
account manager and not understanding their sense of urgency) and I believe
this is the source of the call. We had addressed the problem by meeting
with them the week before, proposing an innovative solution and making a
proposal on Thursday last week. Gillis wasn't aware that we had responded.
We are now waiting for their response. Let me know if you would like
further information or if we owe a response to Gillis.
Thanks,
Brad | {
"pile_set_name": "Enron Emails"
} |
Tanya:
Enron Corp, (global finance) has a FASB 125 structured deal executed in Dec.,
2000 which requires amendment for tax purposes. A new total return equity
swap on EOG stock will need to be executed between ENA and Rabo. ENA must be
the swap counterparty ("normal course of business") for the legal opinion
which must be issued for the structure. I would like to send Rabo our ISDA
format so as to avoid any surprises; time is short. I assume we do not want
a CSA but will require an Enron Corp. guaranty. Do we want cross default and
Credit Event Upon Merger to apply to the parties? Do we want to
add/eliminate additional events of default? The ultimate Schedule will
probably look very different from our standard but we need to urge our format
as much as possible.
Please call me to update. This update is currently scheduled to close next
Friday. Thanks. Sara
Sara Shackleton
Enron North America Corp.
1400 Smith Street, EB 3801a
Houston, Texas 77002
713-853-5620 (phone)
713-646-3490 (fax)
[email protected] | {
"pile_set_name": "Enron Emails"
} |
It is with sadness and regret that we announce that Cliff Baxter is resigning
as an employee of Enron. We are happy, though, that Cliff,s primary reason
for resigning is to spend more time with his family.
Cliff is a unique talent. His creativity, intelligence, sense of humor, and
straightforward manner have been assets to the company throughout his
career. He will be missed.
Cliff joined Enron in 1991 and was a key member of the team that built Enron,
s wholesale business. Before becoming Vice Chairman of Enron, Cliff served
in a variety of positions in Enron,s wholesale businesses, culminating in his
appointment as Chairman and Chief Executive Officer of Enron North America in
1999.
We have asked Cliff, and he has agreed, to continue in a consulting role for
the company while concluding negotiations on a number of key asset
dispositions.
Please join us in thanking Cliff for his service to the company and in
wishing him the very best. | {
"pile_set_name": "Enron Emails"
} |
We want to, but I'm not willing to put up the cash. I'm also thinking how
mad I'd be if I did spend the $ and we got punked.
DG
"Brent Wallace" <[email protected]> on 12/06/2000 11:48:05 AM
Please respond to <[email protected]>
To: <[email protected]>
cc:
Subject: California Dreamin'
So are you guys going to the Holiday Bowl?
BTW | {
"pile_set_name": "Enron Emails"
} |
This request has been pending your approval for 4 days. Please click
http://itcapps.corp.enron.com/srrs/auth/emailLink.asp?ID=000000000035278&Page=
Approval to review and act upon this request.
Request ID : 000000000035278
Request Create Date : 5/16/01 2:43:01 PM
Requested For : [email protected]
Resource Name : Unlisted Application/Software
Resource Type : Applications | {
"pile_set_name": "Enron Emails"
} |
GE thinks that once we finalize the terms of this contract that this contract
will form the basis for future purchases by Enron and not just ENA. Do we
need to involve other Enron biz units in the sign off process?
Kay Mann@ENRON
05/15/2001 11:41 AM
To: Sheila Tweed/HOU/ECT@ECT, Scott
Dieball/ENRON_DEVELOPMENT@ENRON_DEVELOPMENt, Roseann
Engeldorf/Enron@EnronXGate, [email protected], John G
Rigby/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, John
Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:
Subject: World Hunger Contract
Hi there.
I am attaching for the group's consideration a red line that I ran comparing
the current working draft (v4) with the draft John R. recently circulated to
Tax and Insurance.
I suggest that Pete Thompson keep the typewriter on this. We are getting so
close to the end, I would really like to try to avoid confusion.
I am also attaching a clean copy of the current active version, and the
current list of issues under consideration. I suggest we work through this
list and turn another draft before soliciting Cris/Herman and Lisa's
comments. We should also give the ENA commercial reps the opportunity to
review it at that time.
Kay | {
"pile_set_name": "Enron Emails"
} |
huh
----- Forwarded by Jeffrey A Shankman/HOU/ECT on 01/31/2001 02:56 PM -----
Shawna Johnson@ENRON
01/31/2001 02:55 PM
To: Jeffrey A Shankman/HOU/ECT@ECT, Colleen Koenig/NA/Enron
cc:
Subject: Expense reports
I received your expense report today and have coded it. It has been
processed and sent to Brad Stewart.
Thanks,
Shawna | {
"pile_set_name": "Enron Emails"
} |
SEC Seeks Information on Enron Dealings With Partnerships Recently Run by Fastow
The Wall Street Journal, 10/23/01
Where Did the Value Go at Enron?
New York Times, 10/23/01
FRONT PAGE - FIRST SECTION: SEC probes Enron over financial dealings
Financial Times; Oct 23, 2001
COMPANIES & FINANCE THE AMERICAS: Group full of surprises after failing to open up
Financial Times; Oct 23, 2001
Enron Discloses SEC Inquiry
The Washington Post, Oct 23, 2001
Enron Suffers After Unclear Disclosure, New York Times Says
Bloomberg, 10/23/01
SEC asks Enron for investing data
Houston Chronicle, 10/23/01
Minnesota Mining and GM Climb In a Rally That Builds Late in Day
The Wall Street Journal, 10/23/01
WORLD STOCK MARKETS: Wall St bargain hunters counter earnings gloom AMERICAS
Financial Times; Oct 23, 2001
Milberg Weiss Announces Class Action Suit Against Enron Corp.
Business Wire, 10/22/01
Enron To Host Conference Call Tues 9:30 am EDT
Dow Jones News Service, 10/22/01
Janus Had Biggest Enron Stake at End of 2nd-Quarter (Update1)
Bloomberg, 10/22/01
Enron Says SEC Asks About Related-Party Transactions (Update9)
Bloomberg, 10/22/01
Trusts Keeping Enron Off Balance
TheStreet.com, 10/22/01
Why Enron's Writedown Unnerves Some Investors
TheStreet.com, 10/22/01
SEC Seeks Information on Enron Dealings With Partnerships Recently Run by Fastow
By Rebecca Smith and John R. Emshwiller
Staff Reporters of The Wall Street Journal
10/23/2001
The Wall Street Journal
A3
(Copyright (c) 2001, Dow Jones & Company, Inc.)
Enron Corp. said it has been contacted by the Securities and Exchange Commission seeking information on the energy giant's controversial dealings with partnerships that were set up and run until recently by its chief financial officer, Andrew S. Fastow.
Following Enron's announcement yesterday morning of the SEC inquiry, the company's stock took another big slide, falling more than 20% in New York Stock Exchange trading. As of 4 p.m., Enron shares were trading at $20.65, off $5.40, knocking about $4 billion off Enron's market capitalization. Volume topped the Big Board's most-active list at about 36 million shares. A week ago, Enron stock was trading at about $33 a share. Subsequently, the company announced a $1.01 billion third-quarter write-off that produced a $618 million loss.
Analysts also voiced concerns yesterday about possible other bad news lurking amid Enron's vast and extremely complex operations. The company has dealings with a number of related entities. Under certain circumstances, if Enron's credit rating and stock price fall far enough, the company would be obligated to issue tens of millions of additional shares to these entities, diluting the holdings of current shareholders.
Enron has previously acknowledged the provisions but said its business is strong and it feels confident that there will be no defaults.
In a statement, Enron Chairman and Chief Executive Kenneth Lay said the company "will cooperate fully" with the SEC inquiry and "look(s) forward to the opportunity to put any concern about these transactions to rest." Enron has consistently said that it believes its dealings with the Fastow-related partnerships were proper and properly disclosed. The company has said it put billions of dollars of assets and stock into partnership-related transactions as a way to hedge against fluctuating market conditions.
The SEC inquiry came from the agency's Fort Worth, Texas, regional office. According to a person familiar with the matter, this would indicate that the inquiry comes from the SEC's enforcement arm, as opposed to its corporate-finance section. The participation of the enforcement branch would indicate that the agency is looking into whether there were possible violations of securities law. However, enforcement-branch inquiries often don't produce any allegations of wrongdoing. It also appears that the SEC hasn't yet taken the step of launching a formal investigation, which would be a sign that the agency believes securities laws might have been violated. The SEC declined to comment.
Certainly, there have been questions and concerns about those partnership transactions, which contributed to a $1.2 billion reduction in shareholder equity last week as part of Enron's efforts to unwind the deals. Mr. Fastow, who has declined repeated interview requests, resigned from the partnerships, known as LJM Cayman LP and LJM2 Co-Investment LP, in late July in the face of rising conflict-of-interest concerns by Wall Street analysts and major company investors.
Since then, internal partnership documents have shown that Mr. Fastow and perhaps a handful of Enron associates made millions of dollars last year in fees and capital increases as general partner of the LJM2, the larger of the two partnerships.
Mr. Fastow's partnership arrangement caused some unhappiness inside Enron, according to people familiar with the matter. For instance, these people say, sometime after the creation of the partnerships in 1999, Enron Treasurer Jeffrey McMahon went to company president Jeffrey Skilling and complained about potential conflicts of interest posed by Mr. Fastow's activities. Mr. Skilling didn't share Mr. McMahon's concern, these people say, and Mr. McMahon requested and received reassignment to another post.
Mr. Skilling resigned as Enron president and chief executive in mid-August, citing personal reasons and the fall in Enron's stock price, which peaked at about $90 a share last year. Mr. McMahon and Mr. Skilling haven't responded to repeated interview requests.
Investors are also concerned about potential problems arising in Enron's dealings with other related entities. In some cases, Enron could be required to issue large amounts of stock to noteholders in some of the entities if certain so-called double trigger provisions occur.
For example, last July Enron helped create the Marlin Water Trust II, which sold $915 million in notes that are due July 15, 2003. However, Enron can be considered in default, in advance of that date, if its stock price falls below $34.13 for three trading days and its senior debt is downgraded to below investment grade by either Moody's Investors Service or Standard & Poor's.
Currently, Enron debt is still investment-grade at both ratings agencies and would have to be lowered by several notches to fall into a noninvestment grade category. Last week, Moody's put Enron on review for a possible downgrade. However, observers believe that even if Moody's lowers Enron's rating, the company will still be investment-grade.
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
October 23, 2001
Where Did the Value Go at Enron?
By FLOYD NORRIS
New York Times
What really went on in some of the most opaque transactions with insiders ever seen?
Wall Street has been puzzling over that since Enron (news/quote </redirect/marketwatch/redirect.ctx?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=ENE>) released its quarterly earnings a week ago. Yesterday shares in Enron plunged $5.40, to $20.65, after the company said that the Securities and Exchange Commission was looking into the transactions.
The reaction was in some ways puzzling. Given the questions that have been raised since the earnings announcement - some of them prominently featured in The Wall Street Journal - it was likely that the S.E.C. would begin a preliminary inquiry.
Whether it will go farther than that is not clear, but if nothing else the slide in Enron shares over the last week shows the hazards that can confront a company that allows word of a major reduction in its balance sheet value to dribble out. Enron's shares rose 67 cents, to $33.84, last Tuesday, as investors first reacted to the earnings announcement. But since then they have fallen $13.19, or 39 percent.
The $1.2 billion reduction in shareholders' equity was not mentioned in a news release Enron issued on its quarterly earnings last Tuesday. It was briefly mentioned in a conference call with analysts, but many of the listeners seem to have not noticed that, wrongly thinking Kenneth L. Lay, Enron's chairman and chief executive, was referring to a $1 billion write-off that was disclosed in the earnings release.
When questions were asked in the following days, the explanations were less than thorough. Enron explained that the reduction in shareholders' equity was related to the termination of "structured finance vehicles" involving partnerships that had been controlled by the company's chief financial officer.
"Both the debt and the equity people are looking for more clarity about how the company goes about its business," said Ralph Pellecchia, a credit analyst at Fitch Investors Service. He added that the issue of the company's "credibility related to this transaction really seems to have a life of its own."
Enron declined yesterday to allow any officials to be interviewed about its financial reports. But last night it said Mr. Lay would hold another conference call with investors at 9:30 a.m. today.
The company's earlier disclosures regarding the partnerships baffled many analysts. They referred to such things as "share settled costless collar arrangements" and "derivative instruments which eliminated the contingent nature of existing restricted forward contracts." The disclosures said the company entered into the transactions "to hedge certain merchant investments and other assets."
It appears that Enron was able to report profits from them, even though the underlying assets included investments that declined in value. The Wall Street Journal, citing reports the partnerships made to institutional investors, has reported the partnerships did well enough to make large cash distributions to their investors. Enron officials in recent days have refused to discuss the arrangements in any detail.
One of the questions that the S.E.C. may look into is whether the termination of those transactions should have been treated as a balance sheet item, or whether it should have been taken as a loss that affected reported earnings. An S.E.C. spokesman declined to comment.
Under accounting rules, a company's transactions in its own shares cannot produce profits or losses, whatever the effect on cash flow. So a company that sells its shares for $10 each, and buys them back at $50, or at $1, will report no earnings effect. Enron said that the reduction to shareholders equity, and a related reduction in notes receivable, "is the result of Enron's termination of previously recorded contractual obligations to deliver Enron shares in future periods."
Stephen Moore, an analyst with Moody's Investors Service who has put Enron's debt on review for a possible downgrade, said that while some of the details were not clear, "Essentially, Enron's promise was that a certain amount of Enron's shares would be worth $1 billion. The shares plummeted, and they were not" worth that much.
Enron emphasizes its own version of earnings, which leaves out some expenses, and directs attention away from its balance sheet, which is disclosed only in S.E.C. filings, not in the earnings news release. The reduction in shareholders' equity would be shown only on the third-quarter balance sheet, which has yet to be released.
Earlier this year, Jeffrey Skilling, then Enron's chief executive, reacted strongly when a questioner on a conference call challenged the failure to provide balance sheet numbers when earnings were released. He called the questioner a common vulgarity that surprised many listeners. Mr. Skilling later resigned for what he said were personal reasons and Mr. Lay, the chairman and former chief executive, took back the latter title.
While Enron was riding high, its often difficult-to-understand reports were generally seen as not being a problem. The company appeared to be the dominant force in the business of energy trading, and to be able to produce phenomenal profits. When Mr. Lay was reported as having played an important role in formulating the Bush administration's energy policies, the aura was only enhanced. In January, the shares traded for $84.
But now, with some of the company's ventures clearly having run into problems, it appears that investors are growing less willing to accept the company's reports. That the partnership transactions were disclosed at all was because of the involvement of the chief financial officer, and some have wondered if there might have been similar deals with others.
Mr. Lay has promised to make the company's financial reports easier to understand, and last week's report was at first praised by some analysts for doing just that.
In a news release yesterday, Mr. Lay said the company welcomed the S.E.C.'s request for information. "We will cooperate fully with the S.E.C. and look forward to the opportunity to put any concern about these transactions to rest," he said.
FRONT PAGE - FIRST SECTION: SEC probes Enron over financial dealings
Financial Times; Oct 23, 2001
By JULIE EARLE, JOHN LABATE and SHEILA MCNULTY
Enron, the US energy giant, disclosed yesterday that the Securities and Exchange Commission had asked it to provide financial information at the start of an informal inquiry.
The announcement follows a rapid sell-off in the stock in reaction to Enron's surprise revelation last week of a Dollars 1.2bn charge to equity to eliminate the dilutive effects of closing one of its controversial financing vehicles.
In revealing the SEC call for more detailed information "regarding certain related party transactions", Enron hopes to counter growing criticism that it should be more transparent. "We welcome this request," said Kenneth Lay, Enron chairman and chief executive officer. "We will co-operate fully with the SEC and look forward to the opportunity to put any concern about these transactions to rest."
The SEC probe into Enron's financial dealings is an informal one at this stage, according to the company, and the request for documents is voluntary. However, SEC probes often begin lightly as investigators gather information on an issue.
Such a probe could turn into a formal investigation at any time. In that case, regulators would be armed with subpoena powers and could demand certain documents be handed over. The SEC would not confirm or deny the existence of the Enron probe.
Mr Lay did not say which transactions the SEC was reviewing, although analysts believe they relate to Andrew Fastow, Enron chief financial officer, who has been reported to have run a limited partnership that bought assets valued at hundreds of millions of dollars from Enron.
Analysts say the transactions, while controversial because of Mr Fastow's links to the company, have been disclosed. What concerns them, however, is how Enron valued the assets involved. www.ft.com/energy
Copyright: The Financial Times Limited
COMPANIES & FINANCE THE AMERICAS: Group full of surprises after failing to open up
Financial Times; Oct 23, 2001
By SHEILA MCNULTY
Ronald Barone joked he would have to get plenty of rest ahead of Enron's results last week, noting the US energy company's reputation for producing what some analysts say is the most complicated of earnings reports.
The UBS Warburg analyst was, nevertheless, as ill-prepared as his peers for the announcement of a Dollars 1.2bn charge to equity to eliminate the dilutive effects of closing one of its controversial financing vehicles.
The news overshadowed Enron's on-target 26 per cent increase in third-quarter earnings per share, sending the stock plunging.
The Securities and Exchange Commission's subsequent request for more information about Enron's financial activities has reinforced analyst perceptions that the company should have been more transparent in its reporting.
Curt Launer, of Credit Suisse First Boston, says expectations for more disclosure had built up over the past two months. Kenneth Lay, Enron chairman, had promised to be more forthcoming when he resumed the duties of chief executive following the resignation of Jeff Skilling in August.
While Mr Lay did improve Enron's disclosure by creating headings for new business segments and providing more detail within each of them, the Dollars 1.2bn charge still caught the market off guard.
"It came as a surprise to us," said Stephen Moore, of Moody's Investors Service. "We should have been informed that it was there."
Mr Barone found it disturbing that Enron disclosed the charge in "a fleeting comment" during its conference call with analysts and did not mention it in its nine-page news release.
"Despite progress in other areas, there appears to be much more work ahead before the lingering credibility issues that have vexed this company in the past are fully resolved," he said.
Enron contends that "we did disclose it in the conference call, and it was one of the first points raised in the Q and A session (on the conference call)".
Mr Lay has pledged to co-operate with the SEC's request, which appears to be part of an informal inquiry rather than an official investigation. In the meantime, he adds, Enron will focus on its core businesses.
That is something analysts say Enron has strayed too far away from. Ray Niles of Salomon Smith Barney says the company's core franchise - its wholesale business - is doing well. Most of Enron's problems have arisen from stepping out of this area.
"They need to come clean on the financial effects of all of their off-balance sheet financing," Mr Niles says. "Investors want to see clear, easy-to-understand financial information." Moody's has placed Enron's Dollars 13bn in debt securities on review for possible downgrade and Mr Moore believes there is potential for more write-offs.
Enron is embroiled in a legal dispute with an Indian state electricity board over a power project and is one of several energy traders facing questions in California over accusations of a manipulation of power prices - a charge it denies.
Analysts say its UK businesses are not seeing big multiples, and Enron says it only expects to take Dollars 200m in "goodwill" versus Dollars 5.7bn on its books.
Copyright: The Financial Times Limited
Enron Discloses SEC Inquiry
Information Request Involves Ties to Money-Losing Partnerships
Washington Post
By Peter Behr
Washington Post Staff Writer
Tuesday, October 23, 2001; Page E03
Enron Corp. shares sank more than 20 percent yesterday after the Houston energy company disclosed a Securities and Exchange Commission request for information about Enron's ties to outside investment partnerships set up by the company's chief financial officer.
The SEC would not comment on its action, which Enron spokesman Mark Palmer called an "informal inquiry," not an investigation. "We welcome this request," said Kenneth L. Lay, chairman and chief executive of the Houston-based company.
But the announcement jarred investors' confidence in the giant energy-trading company, already hurt by the unexpected resignation of chief executive Jeffrey K. Skilling in August, and heavy losses from investments in broadband Internet and other technology ventures.
"A lot of people threw in the towel today," said Anatol Feygin, an analyst with J.P. Morgan in New York.
The SEC request was made privately last Wednesday, the day after Enron reported a $1 billion write-off of investment losses and restructuring charges from unsuccessful technology ventures and other operations. The write-offs left Enron with a $618 million loss in the third quarter (84 cents a share).
The Wall Street Journal reported last week that $35 million of the write-off was tied to losses at limited partnerships established by Enron's chief financial officer, Andrew Fastow, and run by him until July.
Enron told investment analysts last week that it had repurchased 55 million shares of its stock held by the partnerships that Fastow had directed, reducing shareholder equity by $1.2 billion.
According to the Wall Street Journal, Fastow set up several investment partnerships with the approval of Enron's board. The partnerships engaged in billions of dollars in complex financial transactions involving Enron and made major investments in power plants and other assets alongside Enron.
An Enron shareholder has filed suit in Texas state court alleging that Enron's board violated its duty to the company by permitting the chief financial officer to engage in the outside transactions that allegedly earned millions of dollars in fees for himself and other investors in the partnerships. What Enron received from the relationships is not clear.
Feygin said that the company had informed analysts about the limited partnerships, which offered Enron a way to take positions in strategic but uncertain technology ventures without detailing the outcomes in its public financial statements.
"In hindsight, that was an error in judgment. I don't think it was an error in principle," the analyst said.
Enron could have revealed the SEC inquiry last week but did not disclose it until yesterday, and for many investors, that was the last straw, Feygin said.
The stock closed yesterday at $20.65, down $5.40, as 36 million shares changed hands.
Staff researcher Richard Drezen contributed to this report.
Enron Suffers After Unclear Disclosure, New York Times Says
2001-10-23 06:31 (New York)
Houston, Oct. 23 (Bloomberg) -- The U.S. Securities and
Exchange Commission's decision to look into some Enron Corp.
transactions and the company's recent decline in value show what
can happen when a company lets a major reduction in its balance
sheet dribble out, Floyd Norris of the New York Times reported in
his column, citing analysts.
Investors are concerned as to how Enron reduced shareholders'
equity by $1.2 billion and why this was not mentioned in a news
release the company issued with its quarterly earnings last
Tuesday, the paper said.
Enron Corp.'s shares fell 21 percent yesterday after the
Houston-based company said the Securities and Exchange Commission
requested information on partnerships run by Chief Financial
Officer Andrew Fastow and other executives. Enron created
partnerships and other affiliated companies to buy and sell assets
such as power plants to lower the debt on its books.
``Both the debt and the equity people are looking for more
clarity about how the company goes about its business,'' said
Ralph Pellecchia, a credit analyst at Fitch Investors Service,
according to the Times.
(New York Times 10-23 1)
Oct. 23, 2001
Houston Chronicle
SEC asks Enron for investing data
Stock price declines as regulators seek details on partnerships
By LAURA GOLDBERG
Copyright 2001 Houston Chronicle
Shares in Enron Corp. fell almost 21 percent Monday after the company disclosed federal securities regulators asked for details on investment partnerships formerly run by its chief financial officer.
The request covers transactions between Enron and two private partnerships, LJM Cayman and LJM2 Co-Investment, that did business with Enron.
The partnerships entered into complex financing and hedging arrangements with Enron.
Enron declined to say if the SEC's request -- which it called voluntary and said represents an "informal inquiry" -- included other issues.
The SEC request, made by fax Wednesday to Enron and followed up with a call Thursday, comes as the Houston-based energy trader was already fighting to put a series of problems behind it and regain credibility with investors and analysts.
"It's further bad news, further question marks related to Enron in general and this transaction specifically," Andre Meade, an analyst with Commerzbank Securities in New York, said of the SEC request.
Some investors prefer to sit on the sidelines until the issue clears up, Meade said, adding: "The level of uncertainty with this stock has gotten pretty high."
An SEC spokesman declined comment.
Enron's Chief Financial Officer, Andrew Fastow, managed both of the LJM partnerships, according to SEC filings made by Enron last year.
Both partnerships are described as investment companies that primarily buy or invest in businesses involved in energy and communications.
Fastow resigned his roles with the LJM partnerships in June amid criticism and questions from some on Wall Street about a potential conflict of interest.
Investors worried Monday that Fastow's duty to Enron shareholders competed with his duties to LJM, Meade said.
In a written statement Monday, Ken Lay, Enron's chairman and chief executive officer, said the company welcomed the SEC's request.
"We will cooperate fully with the SEC and look forward to the opportunity to put any concern about these transactions to rest," said Lay, who reassumed the duties of CEO after Jeff Skilling resigned unexpectedly in August.
Enron said its external and internal auditors and attorneys reviewed the arrangements, its board was fully informed of and approved the arrangements, which were disclosed in Enron's SEC filings.
The issue drew renewed interest from investors and analysts after Enron released third-quarter earnings last Tuesday.
During the quarter, Enron took $1.01 billion in one-time charges to reflect losses in its broadband, retail electricity and water investments.
The amount also included $35 million related to "early termination" of Enron's relationships with the LJM partnerships.
During a call with analysts the same day, Enron said it recorded a $1.2 billion reduction to shareholder equity, or the shareholders' ownership stake in the company, as part of the LJM termination.
Enron declined to answer questions Monday about the LJM entities, including those about their relationship with Enron or Fastow's role with them.
The day after Enron's third-quarter earnings release, the Wall Street Journal ran the first of three articles highlighting the LJM partnerships, Fastow and Enron.
The Journal's Friday report said LJM2 "realized millions of dollars in profits in transactions it did with Enron," and that "Fastow, and possibility a handful of partnership associates, realized more than $7 million last year in management fees."
Shares in Enron, which closed last Tuesday at $33.84, ended the day Friday at $26.05. Then Monday, shares in Enron dropped by $5.40 to close at $20.65.
Anatol Feygin, an analyst with J.P. Morgan in New York, believes there were no improprieties surrounding LJM.
"From inception, the LJM situation was obviously one that would raise eyebrows," said Feygin, adding Enron anticipated that and made sure proper legal structures were in place.
The LJM entities are what's known as off-balance sheet financing vehicles, he said. Generally, they allow a corporation to take on financial obligations without having to report them as liabilities.
Feygin also said it appeared Enron intended to give Fastow an "opportunity to participate in the upside from these entities" to reward him.
Even though the LJM transactions have been disclosed by Enron, Meade noted that they are complicated, difficult to follow and their implications tough to understand.
In transactions detailed in an SEC filing made by Enron last year, LJM Cayman received shares of Enron common stock and LJM2 acquired assets from Enron.
Another filing last year said LJM Cayman and/or LJM2 acquired various debt and equity securities of certain Enron subsidiaries and affiliates.
Investors are also concerned about potential shareholder lawsuits as well as equity commitments facing Enron from two other financing vehicles called Whitewing and Marlin, Jeff Dietert, an analyst with Simmons & Co. International in Houston, wrote in a research note Monday.
If Enron should lose its current investment-grade quality debt rating, those equity commitments from Whitewing and Marlin could trigger steps that would cause the value of Enron's current outstanding shares to become diluted.
At least two shareholders have already sued Enron's board in state district court, while two law firms filed suit on behalf of Enron shareholders Monday in federal court seeking class-action status.
Carol Caole, an analyst with Prudential Securities in Houston, downgraded Enron from a buy to a hold Monday primarily because of issues surrounding the credibility of Enron's management.
Several times over the past six months, Caole asked specific questions of senior Enron executives, she said. They denied problems existed, but six weeks to two months later it was revealed there were, indeed, issues, she said.
Coale recently asked about an SEC investigation and was told there wasn't one. But, she said, it turns out it's an "inquiry," not an investigation.
Abreast of the Market
Minnesota Mining and GM Climb In a Rally That Builds Late in Day
By Robert O'Brien
Dow Jones Newswires
10/23/2001
The Wall Street Journal
C2
(Copyright (c) 2001, Dow Jones & Company, Inc.)
NEW YORK -- During yesterday's Wall Street rally, investors responded with accommodation toward the release of third-quarter earnings results and fourth-quarter forecasts.
Shares of Minnesota Mining & Manufacturing added $5.22, or 5.1%, to $107.39 after the manufacturing company released third-quarter earnings, which narrowly edged out analysts' projections, and spoke frankly of the challenges the company continues to face this quarter in light of economic weakness.
Despite this kind of hesitation about the economy's outlook, investors gravitated toward some of the manufacturing and capital-equipment stocks that tend to struggle during periods of weak economic activity. Shares of General Motors, for example, added 1.21, or 2.9%, to 42.57, Alcoa gained 1.16, or 3.7%, to 32.83, and Fluor, an engineering and construction company, rose 1.79, or 4.2%, to 44.77.
Stock averages initially struggled for direction, reflecting some skepticism about the sustainability of the market's recent success, before turning firmly higher in the final two hours of trading. Trading levels thinned out, as well; on the New York Stock Exchange, less than 1.1 billion shares changed hands, compared with 1.2 billion shares Friday, an options-expiration session.
Nevertheless, market averages posted impressive gains. The Dow Jones Industrial Average improved 172.92 points, or 1.88%, to 9377.03. The Nasdaq Composite Index gained 36.77 points, or 2.2%, to 1708.08.
"We had another one of those days where there is a lack of liquidity, so any moves, in either direction, just get exaggerated," Bob Basel, senior trader at Salomon Smith Barney, said yesterday.
Shares of semiconductor companies, including makers of both chips and chip-making equipment, rose sharply after a spending forecast from Intel, the leading chip maker, proved less grim than some experts had anticipated. The company said its capital spending could be cut 10% to 20% in 2002 from this year's levels; that wouldn't be as severe as some chip industry experts had forecast.
Shares of Applied Materials advanced 2.22, or 6.8%, to 34.77 on Nasdaq, while KLA-Tencor gained 2.74, or 7.5%, to 39.25, and Lam Research improved 1.36, or 7.8%, to 18.80, all on Nasdaq. Among chip makers, Analog Devices rose 2.57, or 7.1%, to 38.74, LSI Logic gained 89 cents, or 5.6%, to 16.83, and Texas Instruments tacked on 1.17, or 4.2%, to 28.91. For its part, Intel rose 1.15, or 4.8%, to 25.30 on Nasdaq.
Shares of Lexmark International dropped 5.58, or 11%, to 44.77. The Lexington, Ky., maker of computer printers reported third-quarter results that matched Wall Street's forecasts, but warned that it continues to face sluggish demand in the fourth quarter.
SBC Communications declined 2.24, or 5.1%, to 41.40. The telecommunications service provider reported third-quarter earnings that fell short of analysts' forecasts, and warned that the company won't show "meaningful growth" next year.
Citrix Systems fell 4.14, or 16%, to 21.08 on Nasdaq. Dain Rauscher reduced its rating on the Fort Lauderdale, Fla., maker of computer networking products, saying the company faces competitive pressures from products introduced by rival vendors.
Jabil Circuit eased 16 cents, or 0.7%, to 22.90. The St. Petersburg, Fla., contract electronics maker adopted a so-called shareholder rights plan, which is aimed at preventing an acquirer from gaining control of the company.
EMC advanced 68 cents, or 5.9%, to 12.19. The Hopkinton, Mass., maker of data-storage systems signed what was described as a multibillion-dollar enterprise storage agreement with Dell Computer. Dell improved 50 cents, or 2.1%, to 24.55 on Nasdaq.
SeaChange International advanced 88 cents, or 3.6%, to 25.03 on Nasdaq, boosted by an upbeat research note from Dain Rauscher, which said the Maynard, Mass., provider of video-on-demand technology figures to have posted an upbeat quarter.
Lucent Technologies declined 20 cents, or 2.8%, to 6.90. UBS Warburg, in a research note, expressed some caution about the outlook for the telecommunications equipment maker's quarterly results.
Emerson Electric gained 1.38, or 2.8%, to 50.27, even though the St. Louis manufacturer, which makes electronics and telecommunications products, among other product lines, reduced its earnings guidance for fiscal 2001.
Enron lost 5.40, or 21%, to 20.65, setting a 52-week low. The Houston energy trader, whose stock has weakened since recent articles in The Wall Street Journal raised questions about the company's relationship with two limited partnerships organized by its chief financial officer, said it had received a request for information on Wednesday from the Securities and Exchange Commission regarding some of its transactions with those partnerships.
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
WORLD STOCK MARKETS: Wall St bargain hunters counter earnings gloom AMERICAS
Financial Times; Oct 23, 2001
By MARY CHUNG
US equities rose sharply yesterday with bargain hunting in technology stocks countering a slew of mostly disappointing corporate earnings and more anthrax scares.
Gains accelerated late in the session as the Dow Jones Industrial Average surged 172.92 to close at at 9,377.03 while the S&P 500 index added 16.42 at 1,089.90. The Nasdaq Composite rose 36.78 at 1,708.09. Volume remained light with 1.1bn trades in the NYSE.
Investors were upbeat in spite of a lack of positive news, suggesting underlying strength in the market and optimism for a rebound, some analysts said. The indices were slightly rattled after news that two postal workers in Washington died after suffering symptoms consistent with anthrax, but the market quickly regained its footing.
"The market is acting very well. It's come an awful long way in a short time and had to deal with anthrax," said Alfred Goldman, chief market strategist at AG Edwards. "The message is that investors and consumers and the country are in a recovery mode."
Semiconductor stocks showed strength with Intel up 4.7 per cent at Dollars 25.30 and Advanced Micro Devices 4.2 per cent at Dollars 9.58.
Microsoft rose 3.9 per cent at Dollars 60.16 before the launch this week of its Windows XP operating system. Lexmark dropped 11 per cent at Dollars 44.77 after the company reported third-quarter results that met estimates, but warned of a fourth-quarter revenue shortfall. Applied Digital Solutions gained 66 per cent at 58 cents after the company said it had formed a subsidiary to develop and market its ThermoLife thermoelectric generator product powered by body heat.
3M gave a lift to Dow components, up 5.1 per cent at Dollars 107.39 after the maker of Post-it notes said quarterly earnings beat expectations by a penny a share. The company forecast fourth-quarter profit would be in line with analyst estimates.
SBC Communications was the biggest decliner within the Dow, down 5.1 per cent to Dollars 41.40 after it said earnings failed to meet Wall Street consensus estimates.
American Express gained 3.4 per cent to Dollars 30.32 despite reporting a 60 per cent drop in third-quarter earnings.
Dow components Citigroup and JP MorganChase tacked on 2.5 per cent and 4.2 per cent respectively. Shares in Alcoa were up 3.7 per cent at Dollars 32.83 and ExxonMobil 1.4 per cent at Dollars 41.12.
Enron fell 20.7 per cent at Dollars 20.65 after the energy trading company said the Securities and Exchange Commission requested it voluntarily provide information regarding certain transactions.
In Toronto the S&P 300 composite index fell just 0.08 per cent to 6,905.21 at the close.
Copyright: The Financial Times Limited
Milberg Weiss Announces Class Action Suit Against Enron Corp.
10/22/2001
Business Wire
(Copyright (c) 2001, Business Wire)
NEW YORK--(BUSINESS WIRE)--Oct. 22, 2001--The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on October 22, 2001, on behalf of purchasers of the common stock of Enron Corp. ("Enron" or the "Company") (NYSE:ENE) between January 18, 2000 and October 17, 2001, inclusive. A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss' website at: http://www.milberg.com/enron/
The action, numbered H013630, is pending in the United States District Court for the Southern District of Texas, Houston Division, located at 515 Rusk Street, Houston TX 77002, against defendants Enron, Kenneth Lay, Jeffrey K. Skilling and Andrew Fastow. The Honorable Melinda Harmon is the Judge presiding over the case.
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between January 18, 2000 and October 17, 2001, thereby artificially inflating the price of Enron common stock. Specifically, the complaint alleges that Enron issued a series of statements concerning its business, financial results and operations which failed to disclose (i) that the Company's Broadband Services Division was experiencing declining demand for bandwidth and the Company's efforts to create a trading market for bandwidth were not meeting with success as many of the market participants were not creditworthy; (ii) that the Company's operating results were materially overstated as result of the Company failing to timely write-down the value of its investments with certain limited partnerships which were managed by the Company's chief financial officer; and (iii) that Enron was failing to write-down impaired assets on a timely basis in accordance with GAAP. On October 16, 2001, Enron surprised the market by announcing that the Company was taking non-recurring charges of $1.01 billion after-tax, or ($1.11) loss per diluted share, in the third quarter of 2001, the period ending September 30, 2001. Subsequently, Enron revealed that a material portion of the charge related to the unwinding of investments with certain limited partnerships which were controlled by Enron's chief financial officer and that the Company would be eliminating more than $1 billion in shareholder equity as a result of its unwinding of the investments. As this news began to be assimilated by the market, the price of Enron common stock dropped significantly. During the Class Period, Enron insiders disposed of over $73 million of their personally-held Enron common stock to unsuspecting investors.
If you bought the common stock of Enron between January 18, 2000 and October 17, 2001, you may, no later than December 21, 2001, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Milberg Weiss Bershad Hynes & Lerach LLP, or other counsel of your choice, to serve as your counsel in this action.
Milberg Weiss Bershad Hynes & Lerach LLP, a 190-lawyer firm with offices in New York City, San Diego, San Francisco, Los Angeles, Boca Raton, Seattle and Philadelphia, is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of World War II and other human rights violations, and has been responsible for more than $30 billion in aggregate recoveries. The Milberg Weiss Web site (http://www.milberg.com) has more information about the firm.
If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys:
Steven G. Schulman or Samuel H. Rudman One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165
Phone number: (800) 320-5081 Email: [email protected] Website: http://www.milberg.com
William S. Lerach or Darren J. Robbins 600 West Broadway1800 One America PlazaSan Diego, CA 92101-3356 Phone number: (800) 449-4900
CONTACT: Milberg Weiss Bershad Hynes & Lerach LLP Steven G. Schulman or Samuel H. Rudman 800/320-5081 Email: [email protected] Website: http://www.milberg.com or William S. Lerach or Darren J. Robbins 800/449-4900
19:16 EDT OCTOBER 22, 2001
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Enron To Host Conference Call Tues 9:30 am EDT
10/22/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
HOUSTON -(Dow Jones)- Enron Corp. (ENE) will hold a conference call at 9:30 a.m. EDT Tuesday to address investor concerns, the company said in a press release Monday.
Earlier Monday, a shareholder filed a derivative lawsuit against Enron alleging the board breached their fiduciary duties by allowing Chief Financial Officer Andrew Fastow to create and run certain limited partnerships.
Last week, Enron said it received a request for information about "certain related party transactions" from the Securities and Exchange Commission.
On Oct. 16, Enron announced that it would take a $35 million charge relating to the limited partnerships and revealed that the company had to repurchase 55 million of its shares in order to unwind its involvement in the partnerships, thereby reducing the company's shareholder equity by $1.2 billion.
Shares of Enron closed Monday at $20.65, down $5.40, or 20.7%, on New York Stock Exchange volume of 36.4 million shares. Average daily volume is 5.8 million shares. In intraday trading, the shares reached a 52-week low of $19.67. The previous 52-week low was $24.46, reached on Sept. 27.
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Janus Had Biggest Enron Stake at End of 2nd-Quarter (Update1)
2001-10-22 18:04 (New York)
Janus Had Biggest Enron Stake at End of 2nd-Quarter (Update1)
(Adds Stilwell shares at bottom.)
Denver, Oct. 22 (Bloomberg) -- Janus Capital Corp., whose
stock funds have lost more than a third of their value this year,
may get another jolt from Enron Corp.
As of June 30, Denver-based Janus was the biggest
institutional holder of Enron, owning 42.8 million shares, or a
5.71 percent stake in the largest U.S. energy trading company,
according to Thomson Financial/Carson.
Enron shares have fallen 39 percent over the past four days
on concern that the company's dealings with partnerships run by
its chief financial officer contributed to investment losses. The
Securities and Exchange Commission has asked for information on
the partnerships, Enron said.
Janus, which boosted its Enron stake in the past year in an
effort to diversify its technology-heavy stock funds, is among a
handful of firms including Putnam Investments, Alliance Capital
Management, Barclays Global Investors and Fidelity Investments
that owned more than 2 percent of the Houston-based company as of
June 30, according to Bloomberg data.
``It was definitely a real growth darling,'' said Christine
Benz, a senior analyst at Chicago-based fund tracker Morningstar
Inc. ``In a year like 2000, when almost nothing was working for
growth managers, Enron emerged as a story that a lot of growth
managers could like.''
Fund Holdings
According to Thomson Financial, 1,187 mutual funds, or 15.4
percent of all U.S. stock funds, owned a combined 207.9 million
Enron shares as of June 30. Combined losses on the holdings amount
to $2.7 billion since Tuesday.
According to the latest available data compiled by Thomson,
the biggest fund holders of Enron were: Janus Fund, with 2.15
percent; Janus Twenty Fund, with 1.19 percent; Alliance Premier
Growth Fund, with 1.14 percent; American Century Ultra Fund, with
1.01 percent; Janus Mercury Fund, with 0.88 percent; Vanguard 500
Index Fund, with 0.82 percent; Fidelity Magellan Fund, with 0.73
percent; AIM Value Fund, with 0.6 percent; CREF Stock Account,
with 0.58 percent; and, Putnam Investors Fund, with 0.52 percent.
Janus Fund has lost 33.2 percent this year through Friday,
while Janus Twenty Fund has lost 33.4 percent and Janus Mercury
Fund has fallen 34 percent. A Janus spokeswoman wasn't immediately
available to comment.
Morningstar's Benz said she suspects Janus fund managers have
already begun trimming their Enron positions.
Enron shares had fallen 59 percent this year before last
week's news on concerns about financial reporting and money-losing
investments outside energy trading, such as trading space on
broadband telecommunications networks and building water treatment
plants.
The stock fell $5.40, or 21 percent, to $20.65 in New York
trading today.
``Anecdotal evidence that I'm hearing from the fund managers
there is that they had been trimming pretty aggressively,'' said
Benz. She added that it's ``difficult to make the assertion that
they are in the clear.''
Janus Capital is owned by Kansas City, Missouri-based
Stilwell Financial Inc., whose shares gained 73 cents today to
$22.52. Stilwell shares have fallen 43 percent this year.
Enron Says SEC Asks About Related-Party Transactions (Update9)
2001-10-22 18:30 (New York)
Enron Says SEC Asks About Related-Party Transactions (Update9)
(Adds information on conference call in 26th paragraph.)
Houston, Oct. 22 (Bloomberg) -- Enron Corp.'s shares fell 21
percent after the Houston-based company said the Securities and
Exchange Commission requested information on partnerships run by
Chief Financial Officer Andrew Fastow and other executives.
Enron, the largest energy trader, created partnerships and
other affiliated companies to buy and sell assets such as power
plants to lower the debt on its books. An investor sued Enron's
board Wednesday, saying two partnerships cost the company $35
million and Fastow's leadership of them was a conflict of
interest.
Investors today said they were concerned that Enron may be
forced to dismantle the affiliated companies by paying off the
owners in cash or stock. Chief Executive Ken Lay said last week he
may be have to ``unravel'' agreements that created the companies
if Enron's debt ratings fall too far.
``We need confidence their long-term credit rating won't go
below investment grade,'' said Roger Hamilton, an analyst at John
Hancock's value funds, which own 600,000 Enron shares.
Enron reduced shareholders' equity by $1.2 billion when it
repurchased 55 million shares of two such partnerships controlled
by Fastow, LJM Cayman and LMJ2 Co-Investment, the Wall Journal
reported last week.
Dismantling more of the affiliated companies and partnerships
would cost Enron or its shareholders as much as $3 billion, Ray
Niles, a Salomon Smith Barney analyst, wrote in a report to
investors today.
Shares Plunge
Enron shares fell $5.40 to $20.65. They touched $19.67 during
the day's trading, the lowest level since Jan. 15, 1998.
The stock has fallen 75 percent this year amid concerns about
failed investments in trading of space on fiber-optic
communications networks and a water company, and the resignation
of Jeff Skilling as CEO in August after seven months on the job.
While Skilling said he resigned for personal reasons,
investors say his departure led them to question whether the
company was concealing problems, including possible liabilities
from affiliated companies.
On Tuesday, Enron surprised many investors when it reported a
$618 million third-quarter loss, the result of writing off $1.01
billion in failed investments.
Moody's Investors Service placed the company's debt on watch
for possible downgrade. The company's debt is rated at investment
grade by Fitch, Standard & Poor's and Moody's.
The company received a faxed request for information from the
SEC on Wednesday asking for information, spokesman Mark Palmer
said, and will respond ``as soon as possible.''
``We will cooperate fully with the SEC and look forward to
the opportunity to put any concern about these transactions to
rest,'' Lay, who is also Enron's chairman, said in a statement.
Dilution Fears
Enron has formed at least 18 companies to serve as financing
vehicles for its projects, based on filings with the Texas
secretary of state. Fastow and other Enron executives are named as
the controlling partners or the board members in the companies.
Some have bought Enron assets such as power plants, removing
the debt for those projects from Enron's books. That allows Enron
to keep cash earned from the main trading business from supporting
what it views as secondary businesses, Standard & Poor's debt
analyst Todd Shipman said.
Enron brokers trades of electricity, natural gas and other
commodities as well as owns power plants and natural-gas
pipelines.
Dismantling the affiliates would be costly. Whitewing
Management, an affiliated company that has bought 14 Enron power
plants and lists Fastow as managing director, holds 250,000
preferred shares of Enron.
Enron may have to convert the preferred shares to common
stock if share prices fall below a certain level and the credit
rating drops below investment grade, according to company filings.
That would dilute the value of common shareholders' investment.
``The concern is how many of these dilutive structures are
out there?'' Shipman said. ``Investors are worried they might have
to share their Enron earnings with a lot more people than they
originally thought.''
Worrisome Financing
Enron's auditors and attorneys reviewed the company's
``related party arrangements,'' the board approved them, and they
were disclosed in SEC filings, Enron said in its statement.
That hasn't eased concerns. The reduction of shareholder
equity by $1.2 billion from the LJM partnerships is reason to
worry about Enron's other financing vehicles, wrote Niles, the
Salomon analyst. Enron also may take another $2.4 billion in
losses from investments in the Dabhol power plant in India and
projects in South America, he wrote.
Bonds Fall
Enron's 8 percent coupon bonds due in 2005 fell $34 per
$1,000 face value to be offered at $1,022 today from $1,056 on
Friday, traders said. Yield on the debt rose to 7.33 percent from
6.33 percent.
Based on Bloomberg composite ratings, most of Enron's long-
term debt is rated at BBB2 and BBB1, two or three levels above
investment grade.
Fastow continues to work, and Enron hasn't punished him,
Palmer said. Fastow declined to be interviewed, spokeswoman Karen
Denne said. SEC spokesman John Heine declined to comment on the
agency's request to Enron.
``We believe everything that needed to be considered and done
in connection with these transactions was considered and done,''
Lay said in the statement.
Enron will hold a conference call to discuss investors'
concerns at 9:30 a.m. New York time Tuesday. The call may be
accessed through the ``Investors'' section of Enron's Web site at
http://www.enron.com.
--Russell Hubbard in the Princeton newsroom at 609-750-4651, or at
[email protected] and Mark Johnson in the Princeton newsroom
at (609) 750-4662, or [email protected], with reporting by
Terry Flanagan/slb/alp/pjm/slb/*atr/alp/taw
Trusts Keeping Enron Off Balance
By Peter Eavis <mailto:[email protected]>
Senior Columnist
TheStreet.com
10/22/2001 07:15 AM EDT
URL: <http://www.thestreet.com/markets/detox/10002702.html>
Enron (ENE:NYSE - news - commentary) stock plunged 20% last week after the energy giant revealed that a complex financing deal caused a $1.2 billion hit to its equity. But other big deals that have yet to receive much public scrutiny could further damage the company's balance sheet.
In the spotlight last week were transactions done with investment partnerships called LJM2 and LJM Cayman. An examination of the LJM2-related equity writedown can be found here.
However, the LJM deals make up only part of Enron's sophisticated financing arrangements. Also at issue are two large trusts that contain assets Enron shifted from its balance sheet. These are the $1 billion Marlin Water Trust II and the $2.4 billion Osprey Trust, usually known as Whitewing.
The key risk for investors is how Enron chooses to repay these trusts if they don't unwind as planned. The company may end up issuing stock to repay money borrowed through the trusts. This would dilute existing shareholders. Alternatively, Enron could resort to using cash raised through sales of on-balance sheet assets. But this would hamper efforts to reduce debt and deprive the company's profitable business lines of much-needed capital.
Whitewing and a Prayer?
Though set up by Enron, Marlin II and Whitewing are legally distinct from the company. Institutional investors bought notes issued by the trusts. The $3.4 billion in proceeds from the notes flowed to Enron.
Both trusts are scheduled to unwind in 2003. Originally, Enron had hoped to repay them by selling the trusts' underlying assets. This repayment method would have had a minimal impact on Enron's balance sheet.
However, there's a potential problem brewing with this approach. The value of the assets may be too low to raise sufficient funds to pay back the trust investors. Hence Enron's two unenviable options: issuing stock, or raising cash from its own balance sheet.
Enron treasurer Ben Glisan concedes that assets in Marlin II won't be sufficient to pay it back. But he adds that proceeds from planned sales of on-balance sheet assets will provide Enron with the necessary funds for Marlin II. When asked if Whitewing's assets are adequate for repayment, Glisan replied: "We believe so."
In reference to the two trusts, Enron CEO Kenneth Lay said on a conference call Tuesday: "We anticipate the sale of assets will be the primary source of repayments."
Sterling Marlin
TheStreet.com hasn't seen offering documentation for Whitewing; Enron didn't provide it when requested. But TSC has reviewed the Marlin II prospectus. Here's how Marlin II works. Enron took water assets, primarily based in the U.K., off its balance sheet, and the Marlin II trust took a stake in them. Meanwhile, Marlin II issued senior debt to investors, the proceeds of which went to Enron. The company didn't have to recognize these notes as debt on its balance sheet, due to the structure of the trust. Marlin II replaced a similar trust called Marlin that was set to mature at the end of this year.
Ideally, the aim was for Enron managers to maximize the value and profitability of the assets over the life of Marlin and Marlin II so it could sell them off and pay down the trusts. To cover the risk that asset sales wouldn't raise enough money, Enron also pledged to issue as much new convertible preferred stock as might be needed to pay off the notes.
As it happened, the water assets didn't perform well. In fact, Enron set up Marlin II in July to succeed the original Marlin because it wanted to avoid paying off the first Marlin with convertible stock, or with cash from its own balance sheet. This move risked angering the rating agencies that had agreed not to treat Marlin as debt because of Enron's pledge to backstop it with preferred stock. Suddenly, it seemed Enron was wriggling out of its commitment to make good with stock.
Enron's Glisan responds that many of the investors in the first Marlin also invested in Marlin II, illustrating that investors weren't upset by the maneuver.
Glisan says Enron almost certainly won't decide to issue stock to pay off Marlin II. Instead, he adds, money from pending asset sales can be used to pay it off when it matures in July 2003. When asked if Enron might use the expected $1.9 billion in proceeds from selling Portland General, the utility based in Portland, Ore., Glisan replied: "That's a good one."
But using the Portland General windfall would run counter to Enron's frequently stated strategy of selling off low-yielding assets and investing the proceeds in higher-yielding businesses. Portland General is almost certainly a more profitable business than the U.K.'s Wessex Water, which is the dominant asset in Marlin II. In addition, doing so would mean Enron couldn't use all the Portland proceeds to pay off debt. Enron aims to get its debt-to-total-capital ratio down to 40%, from the current 50%.
Maturity
What about Whitewing, which matures in early 2003? Glisan lists Whitewing's assets as: Central American gas distribution assets; turbines destined for European power stations; interests in European power stations; and various debt and equity participations in energy investments. Glisan says these assets can be sold to pay off the $2.4 billion in notes issued by the trust.
But what would happen if the Whitewing assets can't fetch the necessary price? Enron could sell off more on-balance-sheet assets. But, again, this wouldn't help debt-reduction efforts, and it may be running short of large assets that it can quickly sell.
Whitewing is backed with Enron convertible stock. But Enron may be reluctant to issue paper when its stock is so far below recent highs, and current shareholders may begrudge the prospect of further dilution.
Investors also need to keep their eyes on the early-repayment triggers of the trusts. In fact, the stock price-related element of the triggers has already been set off. For Whitewing, the stock has to fall below $59.78; for Marlin II, the stock has to be under $34.13. However, something else has to happen before the trust investors can claim their money back through asset sales and stock issuance. Enron's credit rating must fall below investment grade. That looks to be a long shot, since its rating is currently three notches above subinvestment grade. But it is something the market will watch after Moody's said last week that it was putting Enron on review for a possible downgrade.
Despite all the questions stemming from the trusts, Enron still seems keen to use the structure. Last week, Barclays Capital was inviting investors to subscribe to an Enron-related entity called the Besson Trust. This is being set up to enable Enron "to monetize substantially all of its interests in EOTT Energy Partners," an Enron affiliate that markets and transports crude oil. Expected proceeds from the deal are $227 million, according to the prospectus. Could Enron be setting up new trusts to pay off damaged old trusts?
Due to off-balance sheet financings like Marlin II and Whitewing, it's clear that uncertainty could weigh on Enron's battered stock for some time.
Why Enron's Writedown Unnerves Some Investors
By Peter Eavis <mailto:[email protected]>
Senior Columnist
TheStreet.com
10/22/2001 07:15 AM EDT
URL: <http://www.thestreet.com/markets/detox/10002713.html>
Enron is trying to improve disclosure to investors, but its decision to reduce equity by $1.2 billion in the third quarter has created dismay and confusion in the market.
The action was disclosed in a dubiously discreet manner. More important, investors are struggling to pinpoint how the shrinkage will affect Enron's balance sheet, profits and earnings guidance.
Enron didn't provide answers to questions submitted on the equity reduction.
Enron doesn't include a balance sheet in its earnings release, so the equity decrease couldn't be spotted in numbers supplied Tuesday. And even though Enron did break out $1 billion in earnings charges in its release, the company didn't feel it necessary to mention the equity write down anywhere in the text.
Instead, the public first heard about it on a Tuesday conference call. CEO Kenneth Lay said Enron had shrunk its equity as a result of terminating a so-called "structured finance arrangement." The Wall Street Journal later reported that Enron's counter-party in this transaction was an investment partnership called LJM2 Co-Investment, which has set up and run by Enron's finance chief, Andrew Fastow.
This is what Lay said on the Tuesday call about the equity move: "In connection with the early termination, shareholders' equity will be reduced approximately $1.2 billion, with a corresponding significant reduction in the number of diluted shares outstanding." According to The Journal, Lay then said Wednesday on another call that Enron had repurchased 55 million shares.
Enron's supporters count Lay's mention of a reduction in the share count as bullish, because it should boost earnings per share numbers in the future.
But there are two possible problems with this theory.
First, Enron affirmed its previous earnings guidance that it expects to make $2.15 per share in operating earnings next year. Critically, the company did not say whether its guidance was given using a share count without the 55 million shares or not. If the forecast does assume the exclusion of the 55 million shares, the company should have upped its 2002 per-share earnings forecast by around 6%, since that's the amount by which the share count will be reduced. Enron needs to say what share count it's using in its guidance.
Second, it's almost impossible to determine where these shares were ever recorded, casting a certain amount of doubt on Lay's assertion that the share count will come down.
Why question the CEO? Well, in its 2000 annual report, Enron included some disclosure of the 55 million shares connected with LJM2. It reads: "At December 31, 2000, Enron had derivative instruments...on 54.8 million shares of Enron common stock." The derivative instruments appear to be types of options, or agreements that give the counterparty the right to buy or sell stock at agreed prices.
But these derivatives-linked shares don't show up where they should in the annual report: in the table that breaks out the difference between the basic and diluted share counts. The line item in this table that shows options-related shares totals only 43 million shares, which is close to the amount of employee pay options that qualified for inclusion. Therefore, that number almost certainly doesn't include the 55 million LJM2-related shares. The fact is, at least some of the 55 million derivatives-linked shares should be included if the derivatives were like normal options. That's because the LJM2 derivatives appear to have been "in the money", or profitable for the holders. Typically, all in-the-money options-based stock has to be included in the diluted share count. And these LJM2 derivatives did appear to have that status at the end of 2000. Back then, Enron stock was trading around $80, way above the average $68 level at which these derivatives made money for LJM2.
Maybe these weren't simple options and had other conditions attached that excluded them from the diluted share count. That's what disclosure elsewhere in the annual report appears to imply. Alternatively, the options were embedded somewhere else in the share count table or equity disclosure, though it's hard think where.
Presumably, investors will get a full explanation in Enron's quarterly financial results filing with the Securities and Exchange Commission, due by the middle of November. | {
"pile_set_name": "Enron Emails"
} |
I haven't seen anything else on the template you sent, but meant to make one
comment when you sent it, Sara [which I promptly forgot to do]. Anyway, we
might consider whether the provisions under "Regulation M/Tender Offer Event"
ought to be deleted from any 'sample' confirmation or be in a different
form. Those particular provisions were put in, I believe, by Lehman. I've
seen other forwards that didn't hit those concepts at all, and some that
covered them generally under the caption 'disruption event' or captioned
'extension event'--but I am not sure which type of provision [or none] is
best for Enron. If it is best to delete, we should probably do that in any
sample we adopt. If other provisions would be better for Enron, we ought to
utilize those. What do you each think? If you do have a thought one way or
another, please advise [obviously we are trying to come up with the best form
which is in Enron's interest but acceptable to the counter party]. Thanks.
Sara Shackleton@ECT
12/05/2000 05:41 PM
To: [email protected]
cc: Jim Armogida/Corp/Enron@ENRON, Clint Freeland/Corp/Enron@Enron, Ryan
Siurek/Corp/Enron@ENRON
Subject: Enron Corp. "forward template"
Bob:
Attached is a draft "forward template" for circulation by Enron Corp. to
potential counterparties. I based the template on the Lehman Bros. forward
transaction (which I will fax to you separately). Per our discussion, please
take a look at the template from Enron's viewpoint and suggest improvements,
comments, etc. Enron Corp. has a potential counterparty in the wings and I
would like to send out the template tomorrowl
Please call me with your questions. As always, thanks for your help. Sara | {
"pile_set_name": "Enron Emails"
} |
Notice No. 02-83
March 21, 2002
TO: ALL NYMEX DIVISION MEMBERS AND MEMBER FIRMS
ALL NYMEX DIVISION CLEARING FIRMS
ALL NYMEX DIVISION OPERATIONS MANAGERS
FROM: J. Robert Collins, Jr., President
SUBJECT: MARGIN RATE CHANGE FOR NEW YORK HARBOR UNLEADED GASOLINE
FUTURES CONTRACTS
Effective Date: Friday March 22, 2002 (close of business)
Futures Contracts: New York Harbor Unleaded Gasoline
Contract Months: All Months
Rate Change:
NYMEX Division Margins on New York Harbor Unleaded Futures Contracts
Clearing Member (Maintenance Margin): New: $2,500 Old:
$2,000
Member Customer (Initial Margin): New: $2,750
Old: $2,200
Non-Member Customer (Initial Margin): New: $3,375 Old:
$2,700
Should you have any questions regarding these changes, please contact Arthur
McCoy at (212) 299-2928 or Joe Sanguedolce at (212) 299-2855. This notice
supersedes all previous notices regarding outright margins for the NYMEX New
York Harbor Unleaded Gasoline Futures Contracts. | {
"pile_set_name": "Enron Emails"
} |
Ben,
As requested I have attached BPI's 2nd QTR EDR reports for your review,
comment and record. I do not have a "Final" or accepted 3rd QTR EDR from the
EPA yet.
Respectfully Mitchell
From: Gus Eghneim on 12/04/2000 02:03 PM
To: Benjamin Rogers/HOU/ECT@ECT
cc: Don Miller/HOU/ECT@ECT, Mitchell Hurt/Corp/Enron
Subject: Re:
There is only one quarterly report required for Brownsville. This is the EPA
electronic data report (EDR) which we generate from the CEMS system and
submit electronically to the EPA.
Mitchell - Since you are generating the 3rd quarter reports to the EPA today,
would you please copy Ben on the submittal. Thanks.
Gus
Benjamin Rogers@ECT
12/04/2000 01:08 PM
To: Gus Eghneim/Corp/Enron@Enron
cc: Don Miller/HOU/ECT@ECT
Subject:
Gus:
Do you happen to have or know where the CEMS Quarterly Report for Brownsville
may be. Thanks!
Ben
3-7998 | {
"pile_set_name": "Enron Emails"
} |
Attached please find a draft of the above-mentioned memorandum for your
review. Please contact me or David with any questions or comments. Best
regards.
(See attached file: #518304 v1 - Memo to Jim Keller - November 7, 2000.doc)
- #518304 v1 - Memo to Jim Keller - November 7, 2000.doc | {
"pile_set_name": "Enron Emails"
} |
Hey, Rob try and keep under $100K US.
Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 01/20/2001
06:15 PM ---------------------------
Rob Milnthorp
01/17/2001 06:09 PM
To: David W Delainey/HOU/ECT@ECT
cc:
Subject: Retail Branding
Dave, Pope has been working with the Stampeder organization for the last six
months on creating a sponsorship package for our Retail business. Our first
goal was to attempt to get the naming rights to McMahon Stadium (not unlike
the Canadian Airlines Saddledome, Enron Field, etc.). At this point the
naming rights are off the table. However, we have the opportunity to grab the
naming rights to the Labour Day Classic as well as some other season-long
involvement. Terms of the deal at this point are as follows:
1. "Enron Labor day Classsic" and 100 thirty-second radio spots promoting the
Enron Labor day Classic + Newspaper Ads
40,000 Enron logo cheering towels to be distributed pre-game
Exclusive sponsorship on the cover of the game day program
Enron logo on the player's jerseys
2. Season long involvement
End-Zone advertising
1 full-page color ad in the Stamp's 2001 yearbook
12 season tickets
12 red & white club memberships
Cost would be approx $100K Cdn (still be negotiated).
In terms of our overall strategy for branding, this is likely the only
initiative that we would pursue in 2001 as we like that it has good
penetration for the entire province of Alberta as well as national exposure.
The Labour day game draws the biggest crowd each season, has been sold out
eight out the past nine seasons, and is the largest single day sporting event
in Calgary each year. Last year the "battle of Alberta" attracted over
750,000 viewers on CBC. The timing is also very good as we will be fully
functional by September.
Let me know what you think.
Regards
Milnthorp | {
"pile_set_name": "Enron Emails"
} |
Well, will discuss that later. Call me whenever you want. Mat | {
"pile_set_name": "Enron Emails"
} |
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Market Insight for February 4, 2002
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[IMAGE] Economic Recovery to the Rescue By Arnie Kaufman, Editor, The Outlook
Stay with a positive investment approach.
Corporate accounting and earnings quality issues, high P/Es and fear of additional terrorism remain a drag on the market. Another restraint: Dynamic leadership is absent and may not be seen until signs of improvement in information technology spending breathe new life into that deeply depressed sector. But barring dramatic new financial irregularity disclosures, the chances are good the market will soon start moving forward again. The driving force, we believe, will be an improving economy. S&P chief economist David Wyss feels that if inventory rebuilding accelerates sharply in the period just ahead, it is possible the first quarter will show strong GDP growth and the second quarter a relapse into negative territory. He points out that the 1990-91 recession was the only one since the 1950s that did not have a positive quarter sandwiched between down quarters. Wyss thinks the more likely scenario, however, is a smoother pace of inventory accumulation and rising quarter-to-quarter GDP growth through 2002. This forecast implies upward-trending earnings this year and next. Investors, burned badly by the 2000-2001 bear market, are in a show-me state of mind. Short sellers and others who bet stocks will fall have become bolder lately, and institutions have been moving cautiously. All of this suggests that a good deal of fuel for an advance exists. It wasn't a good omen that the S&P 500 index slipped in January, losing 1.6%. As mentioned a week ago, of the 19 times in the postwar period that the "500" has fallen in January, the index then went on to score a gain for the full year only seven times and suffered a loss for the year 12 times. That was against a backdrop of 2.4 up years for each down year for the 56 years from 1946 through 2001. On the other hand, a decline in the S&P 500 this year would be the third in a row, and that hasn't happened since 1941.
As a TD Waterhouse customer, you can view a complete copy of S&P's The Outlook (a $298 value) for FREE. Just select 'News & Research' when you login to yourTD Waterhouse account . The Outlook is available under Other Reports.
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Check out the Continuing Studies Spring 2002 courses on the Web at http://scs.rice.edu
Highlights of the spring schedule include:
"Discovery! How Advances Are Made in Science, Engineering, and Technology "
"Religious Traditions of India "
"Classic to Contemporary: The Evolving Art of Ballet "
"Ray Miller's Texas "
"Origins of Postmodern Culture "
"The Search for Meaning "
"Roosevelt and Wilson: The Emergence of the Modern Presidency " Creative Writing courses Communication Skills courses and much more.
Log on today and register before classes fill up. Or call us at 713-348-4803 for more information.
To be removed from the Rice University School of Continuing Studies Email Newsletter, please reply to this email with the word "UNSUBSCRIBE" in the subject line. | {
"pile_set_name": "Enron Emails"
} |
Attached in WordPerfect are blacklined drafts of documents marked to
show changes from the last version distributed.
- 265273X.wpd
- 265275.wpd
- 265276.wpd
- 265277.wpd
- 265278.wpd
- 266137X.wpd
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- 267365X.WPD
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- 268572.wpd
- 268675.wpd
- 268676.wpd
- 268951.wpd
- 268980.wpd
- 268982.wpd
- 268991.wpd
- 268999.wpd | {
"pile_set_name": "Enron Emails"
} |
We sold Cove Point gas to CES, the volume is 228 dth - deal 155139. | {
"pile_set_name": "Enron Emails"
} |
Start Date: 4/18/01; HourAhead hour: 5; No ancillary schedules awarded. No
variances detected.
LOG MESSAGES:
PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final
Schedules\2001041805.txt
---- Energy Import/Export Schedule ----
*** Final schedule not found for preferred schedule.
Details:
TRANS_TYPE: FINAL
SC_ID: ECTRT
MKT_TYPE: 2
TRANS_DATE: 4/18/01
TIE_POINT: FCORNR_5_PSUEDO
INTERCHG_ID: EPMI_CISO_DESERT
ENGY_TYPE: FIRM | {
"pile_set_name": "Enron Emails"
} |
Kay, Please review the attached data sheet and let me know if there are any
problems. Thanks. | {
"pile_set_name": "Enron Emails"
} |
Attached below is the product description for the new Nat Gas Phy Park and
Loan product type. Commercial is planning on launching this next Wednesday.
I'm not sure if you would consider this just another Nat Gas phy product or
if it requires special treatment.
Let me know your thoughts.
Thanks!!!
Frank
---------------------- Forwarded by Frank L Davis/HOU/ECT on 07/11/2000 09:29
AM ---------------------------
From: Sheri Thomas
07/10/2000 05:13 PM
To: Steve Jackson/HOU/ECT@ECT, Carrie Hollomon/HOU/ECT@ect
cc: Torrey Moorer/HOU/ECT@ECT, Frank L Davis/HOU/ECT@ECT
Subject: Re: new hub product descriptions - FINAL PROPOSED VERSION
fyi....
---------------------- Forwarded by Sheri Thomas/HOU/ECT on 07/10/2000 05:11
PM ---------------------------
Dale Neuner 07/10/2000 04:01 PM
To: Richard Tomaski/HOU/ECT@ECT, Hunter S Shively/HOU/ECT@ECT
cc: David Forster/Corp/Enron@Enron, Sheri Thomas/HOU/ECT@ECT, Stacy E
Dickson/HOU/ECT@ECT
Subject: Re: new hub product descriptions - FINAL PROPOSED VERSION
My apologies for not including the attachment earlier.
Richard and I believe we have finalized the descriptions for these Products.
Please find attached our suggested final version. Our projected roll-out date
is next Wednesday, so I will commence the building process ASAP.
Dale
3-9746
---------------------- Forwarded by Dale Neuner/HOU/ECT on 07/10/2000 02:32
PM ---------------------------
Dale Neuner 07/10/2000 01:39 PM
To: Richard Tomaski@ENRON, Hunter S Shively/HOU/ECT@ECT
cc: David Forster/Corp/Enron@Enron, Sheri Thomas/HOU/ECT@ECT, Stacy E
Dickson/HOU/ECT@ECT
Subject: Re: new hub product descriptions
Item 1 - Agreed; see my Revision Marks.
Item 2 - How about listing the Contract Price as the difference between the
Bid and Offer; see my Revision Marks.
Also, are you suggesting we change the Product Short Descriptions to what you
have placed in bold? If so, then your Product Short description on the
website will be redundant, and look like this:
Chicago Phy Gas Park Chi Peoples 20Jun00-Jul00 USD/MM;
and if you ever wanted to offer another Product based on a different Location
it would be messy:
Chicago Phy Gas Park Mich Con 20Jun00-Jul00 USD/MM,
so we would have to build another Product Type. I think that it's important
to leave the Product Type generic (i.e. 'US Gas Phy Loan') which would allow
you to transact on other locations (i.e. US Gas Phy Loan Mich Con 20Jun00
-Jul00 USD/MM; or US Gas Phy Loan Demarc 20Jun00 -Jul00 USD/MM) and we can
set those up quickly and easily.
I would really like to get these last issues finalized as quickly as
possible. Building the Product Type is easy; chasing everyone down to get
their part done is where I start running into time delays.
Dale
3-9746
Richard Tomaski@ENRON
07/03/2000 11:28 AM
To: Hunter S Shively/HOU/ECT@ECT, Dale Neuner/HOU/ECT@ECT, [email protected]
cc: Laura Luce
Subject: new hub product descriptions
I have changed the Product description again, but I think that this will be
the final change. Please review the Product example worksheet for a detailed
examples of how I think these products will work.
Dale,
I have modified your long product description for both the Park and the Loan
products. Hunter and I have reviewed your description and we have the
following comments:
1. We should ensure that both "legs" of these transactions are firm.
Currently only the "payback" portion of the transaction is labeled as firm.
2. Do we need to state the Contract price is the difference between the
sales and purchase price. I will make my market based on these prices, but
there are many other factors that will effect my actual bids/offers.
Additonally, we are still waiting for product manager set-up on our
computers; although, we have been approved for these products by security.
Thanks
Richard | {
"pile_set_name": "Enron Emails"
} |
Louise,
I was under the misimpression that EnronOnline LLC would have employees, and,
as such, that Robert would need to be an officer. Since that is not the
case, there is no such need. Sorry for the confusion!
Thanks.
Michelle
Louise Kitchen
11/14/2000 01:17 PM
To: Michelle Cash/HOU/ECT@ECT
cc: Robert Jones/Corp/Enron@ENRON, Tana Jones/HOU/ECT@ECT, Andy
Zipper/Corp/Enron@Enron
Subject: EnronOnline LLC
I had an odd request come in today for Robert to become an officer of
EnronOnline LLC. EnronOnline LLC should not be used for anything (eg we get
employed by Net Works LLC) - I don't understand why are we using EnronOnline
LLC for HR purposes. I have rejected the request until you get back to me as
I am concerned we are using it when we should not.
Thanks
Louise | {
"pile_set_name": "Enron Emails"
} |
Well, don't get too excited until you read it. There's lots of stuff I just
had to put place holders on, but we'll get it all filled in.
Kay
From: Reagan Rorschach/ENRON@enronXgate on 04/05/2001 08:29 AM
To: Kay Mann/Corp/Enron@Enron
cc:
Subject: RE: MDEA
Wow! This is big.....remarkable effort.
-----Original Message-----
From: Mann, Kay
Sent: Thursday, April 05, 2001 8:14 AM
To: Rorschach, Reagan; Fairley, David
Subject: MDEA
Here's a starting point. I've tried to bracket stuff with open issues like
this [ ], but I'm sure there are more questions than [ ]s. I'm really
unclear on the financial aspect of the deal.
<< File: MDEA ESMA (Mann4-3 Draft).doc >>
Reagan, I didn't stop to put the exhibits you sent in, as I thought it was
better to get the doc in your hands (and Mr. Fairley's) for a detailed review.
Kay | {
"pile_set_name": "Enron Emails"
} |
FYI - Brent please call. Sounds like we ought to accelerate our plan. SS
---------------------- Forwarded by Sara Shackleton/HOU/ECT on 01/31/2000
08:51 AM ---------------------------
"LOPEZ AUFRANC, Patricia" <[email protected]> on 01/31/2000 08:39:53 AM
To: Sara Shackleton/HOU/ECT@ECT
cc:
Subject: Master Derivatives Agreement
Sara:
I have a copy of the draft of the Argentine Master Derivative Agreement.
The person who gave it to me mentioned that they are still working on the
definitive draft.
What do you want me to do? Shall I review the text and/or get more involved
in its drafting?
Can you inquiry what exactly was what they said to your people down here
about the use of the draft?
The text is in Spanish, are you interested in an English translation or
shall we wait?
I look forward to your instructions.
Best regards
Patricia L?pez Aufranc
---------------------------------------------------------------------
Este mensaje es confidencial. Puede contener informacion amparada
por el secreto profesional. Si usted ha recibido este e-mail por error,
por favor comuniquenoslo inmediatamente via e-mail y tenga la
amabilidad de eliminarlo de su sistema; no debera copiar el mensaje
ni divulgar su contenido a ninguna persona. Muchas gracias.
This message is confidential. It may also contain information that is
privileged or otherwise legally exempt from disclosure. If you have
received it by mistake please let us know by e-mail immediately and
delete it from your system; should also not copy the message nor
disclose its contents to anyone. Many thanks.
---------------------------------------------------------------------
- att1.unk | {
"pile_set_name": "Enron Emails"
} |
Rob is the deal actually signed.
-----Original Message-----
From: Milnthorp, Rob
Sent: Friday, February 23, 2001 6:15 PM
To: Lavorato, John
Cc: LeDain, Eric
Subject: Extension of Petro-Canada Wholesale Gas Services Arrangement for 5 more years
John, as requested, please see the attached summary regarding the pcog extension. Eric did an excellent job at moving this forward through the "petro-can machine" and demonstrated a lot of patience and perserverance.
Regards
Milnthorp
---------------------- Forwarded by Rob Milnthorp/CAL/ECT on 02/23/2001 05:11 PM ---------------------------
From: Eric LeDain on 02/23/2001 09:11 AM
To: Rob Milnthorp/CAL/ECT@ECT
cc:
Subject: Extension of Petro-Canada Wholesale Gas Services Arrangement for 5 more years
On Wednesday the President of Petro-Canada approved the extension of our Wholesale Gas Services Agreement after the first term expires November 1, 2002, for an incremental 5 years. This has taken me a a while to get closed (and while doing so we have had to keep up a consistently high level of service), but keep in mind it's not easy to renew something half way through the first term.
This extension is very significant for the following reasons:
1. It creates a MTM income of $2.9 MM CDN, net of directly attributable costs to provide the back-office services;
2. It supports further deal flow and potential incentive arrangement income (along with all the production information etc.);
3. Of even greater importance it provides a very critical and frequently used marketing tool as we continue to build our gas and power businesses across Canada. As you know, we have used the Petro-Canada arrangement as an example of the services we can provide, not only when marketing in Canada but also in the US and Europe. Now we can tell potential customers that we not only have provided services to this customer for 3 years, but they've liked it so much they've already extended the agreement for five more years after the first term - the message has to be that we are providing a good quality of service.
Obviously this is a great credit to our Commercial staff and the Operations, Accounting and IT staff that work with Petro-Canada. I will separately advise each of the individuals who works on this account about the renewal and congratulate them. It takes alot of effort to "enchant" the customer day after day, year after year. In fact it's incredibly difficult to be effectively on trial day in and day out as a service provider.
The numbers:
Under the extension, we have provided Petro-Canada with a rebate applied to the remaining term of the agreement from our original base fee.
Original base fee is $1.75 MM CDN per year, payable monthly.
Rebate offered:
Jan/01 - Nov/01 ($458,300) CDN
Nov/01 - Nov/02 ($517,000) CDN
Fee charged for extension term:
Nov/02 - Nov/03 $1,366,000 CDN
Nov/03 - Nov/04 $1,400,000 CDN
Nov/04 - Nov/05 $1,435,000 CDN
Nov/05 - Nov/06 $1,470,000 CDN
Nov/06 - Nov/07 $1,510,000 CDN
We have thoroughly defined our back-office costs required to provide these services at $428,700 CDN/yr (2000$), and have 3 years of operating history to support this as a projection (with escalation at 2% per year) for the second five year term. These costs include back-office staff allocations (salaries and benefits), and rent/infrastructure allocation. We have checked on the allocation of Houston costs, and on a per transaction basis these are insignificant compared to our base business transaction levels. We do not include commercial staff costs in the above as they are covered by the incentive arrangement and ongoing transaction deal flow.
In discussions with Wes, this definition of the costs and certainty about the arrangement scope, will allow us to MTM this income. The MTM income of $2.9 MM CDN includes the rebate offered for the last two years of the current term, and has been reduced by the above annual costs.
Notes:
1. We have not defined the incentive fee for the second five year period yet as we are doing some work at the moment with PCOG on what our benchmark should be, given that much of the intermediate Producers in the group of 40 have disappeared. We will revise the agreement to reflect the fact that there will be a further revision once the incentive fee is agreed to.
2. If Petro-Canada's sales volumes fall to 60% of last years levels, there will be a price reopener for the remaining term because we have defined the fee as an absolute cost rather than per unit rate. We also have a reopener on price if the volumes grow to about 140% of today's levels. Petro-Canada has a growth strategy for gas so this is not at all expected. Volumes over the last 6 months have increased by about 7-8% year on year.
3. Peter and I should have the amended agreement out next week. | {
"pile_set_name": "Enron Emails"
} |
Are we OK with this confidential treatment?
Sue Mara
Enron Corp.
Tel: (415) 782-7802
Fax:(415) 782-7854
----- Forwarded by Susan J Mara/NA/Enron on 05/15/2001 11:21 AM -----
CRCommunications <[email protected]>
05/15/2001 09:13 AM
Please respond to "Sole, Jeanne"; Please respond to " Formanek, Norma" ;
Please respond to " Robinson, Charlie"
To: ISO Market Participants
<IMCEAEX-_O=CAISO_OU=CORPORATE_CN=DISTRIBUTION+20LISTS_CN=ISO+20MARKET+20PARTI
[email protected]>
cc:
Subject: CAISO Notice: Subpoena from the California State Senate Select Co
mmittee to Investigate Price Manipulation of the Wholesale Energy Market
Market Participants and Scheduling Coordinators:
Attached please find a letter from the California State Senate Select
Committee to Investigate Price Manipulation of the Wholesale Energy Market
indicating the confidential treatment it will afford confidential
information submitted by the CA ISO to the Committee in response to the
subpoena circulated to Market Participants on April 30 (attached). The
letter provides that the deadline for a response by the CA ISO is extended
to Friday, May 18 at 9:00 AM. This message is to inform Market Participants
that the CA ISO will comply with the subpoena in a timely manner unless it
gets a valid court order to the contrary by close of business (5:00 PM)
Thursday, May 17. The CA ISO will seek confidential treatment under the
letter for information subject to 20.3 of the CA ISO tariff and other
confidential material.
Any concerns relating to the subpoena should be communicated to Jeanne Sole
at 916-608-7144 and [email protected] <mailto:[email protected]> and copied to
Charlie Robinson at [email protected] <mailto:[email protected]> and
Norma Formanek at [email protected] <mailto:[email protected]> . The
relevant contact related to the subpoena is on the subpoena itself.
Jeanne M. Sol,
Regulatory Counsel
California ISO
(916) 608-7144
____________________________________________________________________________
_______________________________________
The Foregoing e-Mail Communication (Together With Any Attachments Thereto)
Is Intended For The Designated Recipient(s) Only. Its Terms May Be
Confidential And Protected By Attorney/Client Privilege or Other Applicable
Privileges. Unauthorized Use, Dissemination, Distribution, Or Reproduction
Of This Message Is Strictly Prohibited.
- Senate Confidentiality Agmt.pdf
- SenatorS.pdf | {
"pile_set_name": "Enron Emails"
} |
Gentlemen,
Does the Mississippi constitution impact the issue? The munies are
specifically citing Section 100 of the Mississippi constitution, and have
faxed me an opinion of the Mississippi AG interpreting this section. If you
will email me your fax number I will fax it to you.
Kay
"Keffer, John" <[email protected]> on 02/28/2001 02:03:59 PM
To: "C. Kay Mann (E-mail)" <[email protected]>
cc: "Evans, Greg" <[email protected]>
Subject: Consequential Damages in Mississippi
Kay-attached is a summary of the enforceability of consequential damages
clauses under the laws of Mississippi. Greg Evans prepared the summary and
can answer any questions in my absence. Greg can be reached at
713-751-3279. I'll be on the road until Monday, but can retrieve e-mails
and voice mails.
<<2X0#01!_.doc>>
Confidentiality Notice
This message is being sent by or on behalf of a lawyer. It is intended
exclusively for the individual or entity to which it is addressed. This
communication may contain information that is proprietary, privileged or
confidential or otherwise legally exempt from disclosure. If you are not the
named addressee, you are not authorized to read, print, retain, copy or
disseminate this message or any part of it. If you have received this
message in error, please notify the sender immediately by e-mail and delete
all copies of the message.
- 2X0#01!_.doc | {
"pile_set_name": "Enron Emails"
} |
Subsets and Splits