Enron Move Shouldn't Hurt Avista or BPAby Bert Caldwell
The Spokesman Review - November 1, 2001
A likely bankruptcy filing by Enron Corp. will have little effect on Avista Corp. or the Bonneville Power Administration, officials said Wednesday.
In fact, said Bonneville spokesman Mike Hansen, the federal power-marketing agency owes more to Enron than Enron owes Bonneville, although the difference is small.
He said Bonneville canceled Enron's credit when reports of the Houston company's debt problems surfaced.
The only apparent alternative to bankruptcy, a proposed merger with crosstown rival Dynegy Inc., collapsed Wednesday.
Enron owned only a relatively small number of generating plants, instead building its reputation and fortune by buying and selling huge volumes of electricity and other commodities.
Enron moved boldly into the Northwest in 1997, when the company purchased Portland General Electric Co. That transaction soured, and Northwest Natural Gas Co. has agreed to buy the Oregon utility.
But Enron built a powerful position in West Coast electricity markets. The company was among several accused of gouging utilities last winter, when blackouts interrupted power supplies in California.
Hansen said Bonneville bought electricity from Enron on contracts that ranged from one day to five years. The average amount per month was about 100 megawatts, a small slice of the 11,000 megawatts Bonneville delivers to customers around the Northwest, he said.
A megawatt can sustain about 650 homes. Bonneville supplies about 40 percent of all electricity consumed in the region.
Hansen added that Northwest electricity markets have been slow, and prices low, due to the slackened pace of economic activity.
Avista Energy President Dennis Vermillion said an Enron bankruptcy will have only a short-term effect on wholesale energy markets.
Avista Energy is an electricity and natural gas trading company separate from Avista Utilities. The subsidiary's profits have been a bright spot for Avista Corp.
Vermillion said other traders are already picking up the slack left by Enron.
Although financial institutions that provide credit to traders may be burned by an Enron bankruptcy, he predicted that banks who work closely with their borrowers and understand energy markets will stick by their customers.
Vermillion said he, like many others, did not foresee Enron's downfall.
"Let's face it, Enron's been a leader," he said.
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