Enron sees limited exposure from California power problems

Despite the meltdown of the California market, Enron Corp. CEO Jeffrey Skilling said the market for retail energy in the US and Europe will be $765 billion over the next few years in areas where third-party marketers can compete with local utilities to supply electricity and gas. He downplayed the impact California�s failed experiment with deregulation will have on expanding further into restructured retail energy markets in the US and in Europe.


By Maureen Lorenzetti
OGJ Online

NEW ORLEANS, Mar. 28�Despite the meltdown of the California market, Enron Corp. CEO Jeffrey Skilling said the market for retail energy in the US and Europe will be $765 billion over the next few years in areas where third-party marketers can compete with local utilities to supply electricity and gas.

Presently, that retail market amounts to $180 billion. Skilling downplayed the impact California�s failed experiment with deregulation will have on expanding further into restructured retail energy markets in the US and in Europe.

The Houston-based energy concern is a partner in the New Power Co., a subsidiary of NewPower Holdings Inc., which aspires to be a national retail marketer in the US. The company last week said it signed up more than 5,000 residential customers in Texas since it began selling electricity there Mar. 5.

Skilling also suggested Enron's exposure to Southern California Edison Co. and Pacific Gas & Electric Co.'s unpaid bills will be limited this quarter, but he wasn't more specific. The utilities owe billions of dollars to marketers and power producers for wholesale electricity that has been delivered for which they have not paid.

Despite action by a number of states, including New Mexico, Nevada, Arkansas, and Montana to slow down competition, Skilling dismissed concerns from some analysts that California's power problems may dampen interest by other states to offer retail choice.

Some California lawmakers have called on the US Federal Trade Commission to investigate the state's energy suppliers, but as yet no formal investigation has been initiated. The agency has been asked by the House Committee on Energy and Commerce to detail what benefits consumers can expect to gain from state retail competition programs. Comments to the agency are due Apr. 3.

Skilling told a group of institutional investors and analysts the company is still on track for a �great� first quarter despite the threat of a looming recession and the California power situation. The other core areas of Enron are also in �great shape� Skilling said. He also dismissed rumors the company planned to sell off its broadband services.

Most analysts predict Enron is on track to meet its 2001 earning projection of $1.70- $1.75/share this year.

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