Enron fallout spreads
The consequences arising from the collapse of Enron continue make the news with a stream of high-profile energy trading companies becoming subject to official inquiries and employees of accountants Anderson being convicted of obstructing justice by a federal jury.
Investigators now believe that manipulation of the Western power market went well beyond Enron, and FERC inquiries into energy trading activies at Williams Corporation, Avista Corporation, El Paso Electric Company and Portland Electric Company among others has led to large falls in stock values.
Mirant, PPL Corporation and Duke Energy have all issued statements denying involvement in any dubious trading activities such as “round trip” trading and overscheduling of power to take advantage of congestion payments.
A number of the affected companies, including Williams Corp., have had to cut earnings estimates and embark on cost cutting programmes to limit the extent of credit downgrades being imposed by rating agencies.
Setback for Mexico power reforms
Attempts by Mexico’s president Vincente Fox to open up the country’s electricity market and encourage private investment have been dealt a blow following the decision by Mexico’s Supreme Court to overturn the presidential decree raising the amount of power that the Federal Electricity Commission (CFE) could buy from private companies.
Mexican legislators have also decided to leave in place constitutional provisions that prevent private participation in the generation, distribution and marketing of electricity. The decision is a blow to Pemex, which had planned to seek billions of dollars in funding for new cogeneration projects.
•CFE has awarded Alstom a €51m ($50.5m) contract to supply six substations and extend 12 others as part of an upgrade of the power network. Alstom recently completed the construction of two 400 kV substations in the country.
Board resignations hamper Ontario Hydro One grid sale
The Ontario government’s plan to proceed with the sale of Hydro One, the province’s C$5.5bn ($3.6bn) electricity grid, is in doubt following the resignation of the entire board in a dispute with the provincial government over executive remuneration.
The government had only recently introduced legislation to get around a court ruling blocking the sale of shares to the public, but in an apparent attempt to win over wary voters, the government also attacked the level of executive pay. “The sale is sinking into a legal and political swamp,” said a Toronto analyst.
Separately, there was mixed news for Ontario’s nuclear power industry when Ontario Power Generation announced further delays in the restart of its Pickering A nuclear station due to unexpected work and design problems. The plant, which has been idle since 1997, is now scheduled to restart in early 2003.
British Energy, which controlled Bruce Power nuclear facility will, however, benefit from a C$1.1bn refurbishment during its 18-year lease period.
Sale sparks riots
The sale of two of Peru’s electricity generating companies to Tractebel has sparked protests in the main square of Peru’s second city, Arequipa. Egasa and Egesur were sold to Tractebel for $167.4m but locals fear high electricity bills and jobs losses.
Competition to bid for the two companies fell when AES pulled out and Duke Energy withdrew citing disagreement over Peru’s rate system.
Peru has also successfully completed the sale of transmission companies Etecen and Etesur to Columbia’s state-run Interconexion Electrica SA (ISA) for $241.6m.
GE Power Systems wins first Guatemala IPP hydro project
GE Power Systems has won a $9.9m contract to supply complete ‘water-to-wire’ equipment for a new hydroelectric power project in Guatemala.
The 40 MW El Canada hydroelectric project will be GE’s first for an independent power producer in Guatemala.
The project, which is located in southwest Guatemala near the industrial city of Quezaltenango on the Samala river, is owned by Energy Global International Limited of Santa Ana, Costa Rica. The project is downstream from the existing Santa Maria power station and will connect to the power grid at the Santa Maria substation to help meet the region’s growing power demand.
In its contract with EPC contractor Solel Boneh Guatemala S.A, GE will provide two vertical, six-jet, 21 MW Pelton turbines, two 28 MVA synchronous power generators, station controls, transformers, transmission and distribution lines.
The turbines, will be designed by GE Hydro in Norway, whereas the transformers and high voltage equipment will be manufactured in Bulgaria and Spain. The generators will be manufactured by GE Hydro Inepar in Brazil, with the station controls coming from Canada.
Equipment will be shipped to the site in December 2002.
Chile: Alstom and Transelec, Chile’s main high voltage transmission operator, have won a g92m ($91m) turnkey series capacitor system contract to strengthen Chile’s transmission grid.
Cuba: Economic conditions have forced the Cuban government to order state-run companies and other government operations to cut back power consumption by ten per cent in order to reduce the import of fuel oil.
Dominican Republic: President Hipólito Mejía has ordered the renegotiation of power contracts entered into by the previous Dominican Republic administration in order to get idle power plants back into operation at affordable rates and solve the country’s electricity shortage.
Dominican Republic: The Corporacion Dominicana de Electricidad (CDE) has signed a contract with KEMA Consulting to perform a fibre optic study and to prepare a solicitation document for CDE to attract foreign investors.
Ecuador: The winner of the auction for Ecuadorean power company, Emelec, will have to invest at least $100m over the next ten years. A minimum bid price of $130m has been set for the much-delayed privatization.
Mexico: Skoda Praha is in talks with the Mexican state utility CFE over contracts potentially worth $200m as part of the construction of the $1bn El Cajon hydroelectric power station. Skoda recently signed a contract with Genermex of Mexico for the construction of a 113 MW power plant in Monterrey worth $106m.
Mexico: Spanish energy group Endesa has entered the Mexican market via an agreement with Mexico’s CFE which initially will concern telecoms projects but may soon extend to electricity and renewable energy projects.
Peru: Dessau-Soprin, a Montreal-area energy engineering company, has been awarded a rural electrification contract by the Peruvian government worth $240m.
Venezuela:ABB has won three contracts worth $44m from Venezuelan state-owned power company Edelca to provide a power transmission system that will extend the country’s power system and increase its power supply by more than ten per cent. ABB will build a 400 kV substation and four related transmission lines that will connect the 2160 MW Caruachi hydro plant to the grid.
USA: A consortium of Duke/Fluor Daniel and Babcock Borsig Power has won a contract to supply a selective catalytic reduction system for the 2240 MW Belews Creek Steam Station in North Carolina.