Message-ID: <6946002.1075846359565.JavaMail.evans@thyme> Date: Wed, 29 Nov 2000 10:18:00 -0800 (PST) From: ann.schmidt@enron.com To: mark.palmer@enron.com, karen.denne@enron.com, meredith.philipp@enron.com, steven.kean@enron.com, elizabeth.linnell@enron.com, eric.thode@enron.com, laura.schwartz@enron.com, jeannie.mandelker@enron.com, mary.clark@enron.com, damon.harvey@enron.com, keith.miceli@enron.com, richard.shapiro@enron.com, james.steffes@enron.com, iona.maclean@enron.com, katy.lomax@enron.com, vance.meyer@enron.com, john.ambler@enron.com, peggy.mahoney@enron.com, johan.zaayman@enron.com, john.neslage@enron.com, gia.maisashvili@enron.com Subject: Enron Mentions Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Ann M Schmidt X-To: Mark Palmer, Karen Denne, Meredith Philipp, Steven J Kean, Elizabeth Linnell, Eric Thode, Laura Schwartz, Jeannie Mandelker, Mary Clark, Damon Harvey, Keith Miceli, Richard Shapiro, James D Steffes, Iona Maclean, Katy Lomax, Vance Meyer, John Ambler, Peggy Mahoney, Johan Zaayman, John Neslage, Gia Maisashvili X-cc: X-bcc: X-Folder: \Steven_Kean_Dec2000_1\Notes Folders\Notes inbox X-Origin: KEAN-S X-FileName: skean.nsf Planned Enron Plants Jolts Japan Power Industry - Nikkei Dow Jones International News, 11/29/00 USA: Enron's Skilling sees demise of integrated energy firms. Reuters English News Service, 11/29/00 PUC Approves Plan for New Power Company to Supply Energy to PECO Customers PR Newswire, 11/29/00 PG&E, Sempra, Morgan Stanley Defendants In Calif Lawsuit Dow Jones Energy Service, 11/29/00 Alberta Cancels Power Deregulation, Continue to Set Prices Bloomberg, 11/29/00 Enron Plans to Seek Approval for Power Plant in Northern Japan Bloomberg, 11/29/00 Planned Enron Plants Jolts Japan Power Industry - Nikkei 11/29/2000 Dow Jones International News (Copyright (c) 2000, Dow Jones & Company, Inc.) TOKYO (Nikkei)--Enron Corp. unveiled plans Wednesday to have subsidiary E-Power KK build a liquefied natural gas -fueled power plant with an output capacity of 2 million kilowatts in Aomori Prefecture, Northern Japan, sending a shock wave through the Japanese electric power industry, the Nihon Keizai Shimbun reported in its Thursday morning edition. The Texas-based energy company aims, from around 2007, to supply electric power to large-lot users in the Tohoku and Tokyo metropolitan regions at prices lower than those charged by domestic utilities. It may double the output capacity to 4 million kilowatts in the future, the business daily reported. The scale of the project is highlighted by the fact that electric power demand in Aomori Prefecture peaks at 1.33 million kilowatts in summer, the report said. E-Power, a joint venture launched by Enron with Orix Corp. (IX or 8591), also intends to build coal-fueled power plants with an output capacity of about 500,000kw each in Fukuoka and Yamaguchi Prefectures, Western Japan. These projects would give Enron an output capacity that would put it in the same league as Hokkaido Electric Power Co. (J.HEP or 9509), Hokuriku Electric Power Co. (J.HKE or 9505) and Shikoku Electric Power Co. (J.SEP or 9507). An official of the Ube Chamber of Commerce and Industry welcomed Enron's plan to build a plant in the Yamaguchi Prefecture town, saying it "will help promote the local economy." Many Japanese cities have seen the hollowing out of their industrial base since the collapse of the bubble economy. Some industry watchers, however, questioned the viability of Enron's plans, saying that the U.S. energy firm could only undersell domestic utilities by raising its output capacity to a significantly high level. But to do so, they explained, Enron will not only need to shell out a large amount of investment capital, but also clear other obstacles such as winning favorable environmental assessments and building facilities to unload fuel. Most importantly, the scope of Japan's deregulation of the retail market for electric power must be expanded further if Enron hopes to successfully carry out its plans, they said, according to the report. -0- 29/11/00 23-28G Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: Enron's Skilling sees demise of integrated energy firms. 11/29/2000 Reuters English News Service (C) Reuters Limited 2000. HOUSTON, Nov 29 (Reuters) - Enron Corp. President and Chief Operating Officer Jeff Skilling said on Wednesday he expects technology to lead to the demise of the traditional "vertically integrated" energy company whose operations run from oil exploration to selling gasoline at the pump. "I think what you are going to see is the disintegration of this business into hundreds and maybe thousands of smaller enterprises that are tied together electronically or virtually," Skilling told the Arthur Andersen Energy Symposium in Houston. Enron, which began as a natural gas pipeline operator, seized opportunities created by energy deregulation to become North America's biggest wholesale marketer of gas and electricity. It has also been a pioneer in the use of the Internet to trade gas and power and a growing number of non-energy commodities. Skilling said industrial companies had been integrated in the past to cut down on the transaction costs involved at different stages of the production chain. However, technology, particularly Internet technology, was causing such transaction costs to plummet, thus undermining the rationale for vertical integration, he said. Big integrated companies would be forced to recognize that they could not be the lowest cost producer of crude oil, the lowest cost refiner and the lowest cost gasoline marketer, he said. Skilling predicted this would lead to the breaking up of big integrated companies and the emergence of many smaller specialist companies which enjoyed significant cost advantages in their own particular field. Skilling said today's big vertically integrated energy companies were an anachronism from the days of Standard Oil founder John D. Rockefeller. "It's an industry structure that was designed by John D. Rockefeller in 1870 and it hasn't changed much in 130 years. I think it will change a lot over the next 10 or 15 years," he said. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. PUC Approves Plan for New Power Company to Supply Energy to PECO Customers 11/29/2000 PR Newswire (Copyright (c) 2000, PR Newswire) HARRISBURG, Pa., Nov. 29 /PRNewswire/ -- Approximately 299,000 PECO residential customers will receive discounted electricity from the New Power Company next year under a plan approved today by the state Public Utility Commission (PUC). Customers choosing to participate in the program will receive power from New Power beginning in January 2001 and through January 2004. New Power is a joint effort by Enron, America Online and IBM. PECO will continue to provide transmission and distribution service. PUC Communications Manager Kevin Cadden explained that the customers would be randomly selected from those who have not shopped for an alternative supplier under the state's electric competition program. "PECO will select customers who have not actively participated in our program," he said. "However, customers have the right to opt out of this program and to return to PECO at any time without a penalty. They may also choose to shop for a supplier other than New Power or PECO." Today's action is intended to create more competition in the Philadelphia area by allowing a competitor to provide default service to PECO customers. Customers who do not shop under the state's electric competition law automatically continue to receive electricity from their local electric company. The PUC directed PECO in the utility's 1998 restructuring order and in its merger application with Unicom to develop a plan beginning in 2001 for assigning at least 20 percent of its residential customers to another supplier. The company asked for competitive bids on the proposal on August 24 and selected New Power on October 3. For additional press releases or more information on the PUC, visit their website at http://puc.paonline.com. /CONTACT: Kevin Cadden, Communications Manager of the PA Public Utility Commission, 717-787-5722 or fax, 717-787-4193/ 16:02 EST Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. PG&E, Sempra, Morgan Stanley Defendants In Calif Lawsuit 11/29/2000 Dow Jones Energy Service (Copyright (c) 2000, Dow Jones & Company, Inc.) LOS ANGELES -(Dow Jones)- Energy marketing and trading companies that conduct business in California were named in a lawsuit filed in San Diego Superior Court Wednesday alleging traders "fixed" wholesale power prices and conspired with other companies to raise the "market clearing bid" for energy sold into the state's Power Exchange, resulting in more than $1 billion in electricity overcharges last summer. The complaint names as defendants PG&E Energy Trading, a unit of PG&E Corp. (PCG), Dynegy Power Marketing Inc. (DYN), Morgan Stanley Capital Group Inc., Enron Energy Services and Enron Power Marketing Inc (ENE), Reliant Energy Services, a unit of Reliant Energy Inc. (REI) Sempra Energy Trading and Sempra Energy Resoures, a unit of Sempra Energy Inc. (SRE) Southern Company Energy Marketing (SO), Williams Energy Marketing and Trading and Williams Energy Services Co., Duke Energy Trading and Marketing LLC (DUK) and NRG Energy (NRG). The complaint, filed on behalf of sole plaintiff Ruth Hendricks pending class action status by a judge, alleges the companies "anticompetitive conduct included combining to restrain the amount of energy available through the (CalPX) and ISO energy markets, conspiring to illegally obtain and trade information relating to energy supply, pricing and demand, and combining to raise the market clearing bid for electric energy on the CalPX wholesale markets." -By Jason Leopold; Dow Jones Newswires; 323-658-3874; jason.leopold@dowjones.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Alberta Cancels Power Deregulation, Continue to Set Prices 11/29/0 18:27 (New York) Alberta Cancels Power Deregulation, Continue to Set Prices Edmonton, Alberta, Nov. 29 (Bloomberg) -- The Canadian province of Alberta canceled an auction of electricity production and won't open its power markets next year as planned because of consumers' fears that deregulation will boost prices. The government yesterday shelved plans to allow suppliers to charge consumers market rates for electricity starting Jan. 1, and canceled price increases it had previously approved. To prepare for competition, the government in August auctioned rights to buy electricity from Alberta's power plants for C$1.17 billion ($760 million). Buyers in the auction expected to be able to re-sell the power at market prices, which can surge during heat waves or shortages. Now regulators will continue to set the rates at which power can be sold, limiting potential returns. In addition, the government canceled plans to auction off four more power-sale contracts today. One of the bidders in the earlier auction was Houston-based Enron Corp., the world's biggest energy trader. It paid C$294.8 million to buy the output of a 706-megawatt power plant for 20 years. Enron spokesman Eric Thode said the company is still evaluating Alberta's announcement. Rate-increase hearings at the Alberta Energy and Utilities Board have been suspended. The province said it will create regulations for electricity suppliers and the Power Pool of Alberta, which auctions electricity from the province's generators. Power import and export regulations for the pool will also be changed, the government said. Last week the Globe & Mail newspaper reported officials from Canada's Competition Bureau raided offices of Powerex Corp., the energy trading arm of the British Columbia Hydro & Power Authority, and Enron's Canadian unit, alleging the companies conspired to raise electricity prices through the Pool. Enron fell $8.19 to $70.25 on the New York Stock Exchange. --Gene Laverty in Calgary (403) 232-8188, or glaverty@Bloomberg.net, through the Princeton newsroom (609) 279- 4000/alp Enron Plans to Seek Approval for Power Plant in Northern Japan 11/29/0 14:22 (New York) Enron Plans to Seek Approval for Power Plant in Northern Japan Houston, Nov. 29 (Bloomberg) -- Enron Corp., the world's largest energy trader, said it will seek government approval to build a natural-gas-fired power plant in northern Japan, a company spokeswoman said. The plant, Enron's first in Japan, would be capable of generating 2,000 megawatts, enough to light 2 million U.S. homes, said Jackie Gentle, an Enron spokeswoman. It would take at least six years to get the plant built and operating, she said. Gentle said Enron wouldn't provide estimates of construction costs. The plant would be built by Enron's EPower Corp. unit. EPower itself is a unit of Encom, in which Enron owns a 68 percent stake. The rest of Encom is held by Orix Corp., Japan's biggest leasing company, and private investors, Gentle said. EPower is considering building power plants in at least two other places in Japan, including the southwestern city of Ube, Gentle said. Japan began opening its electricity market to competition in March. The plant in northern Japan will be fueled with liquefied gas, Gentle said, requiring construction of a processing plant. Gas is cooled into a liquid so it can be shipped using special tankers when no pipelines are available. Almost all of Japan's natural gas is imported, and arrives liquefied, according to the U.S. Department of Energy. Shares of Enron fell $6.94 to $71.50 in midafternoon trading amid signs that slowing U.S. economy will reduce energy demand. Before today, they had risen 77 percent this year. Orix fell 10 yen to 10,810. Its shares have fallen 44 percent since the first of the year. --James Mosher in the Princeton newsroom (609) 279-4131, or at jmosher@bloomberg.net/alp