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Thursday, May 26, 2016

Enron financial woes won't still area turbines

Monday, December 3, 2001

Company officials with Enron Wind do not expect the financial problems of Enron Corporation to alter the wind division's operations.

According to a company spokesperson, Enron Wind operates independently of its parent corporation and should not see any "significant" changes to the local windfarm sprawling across Buena Vista County.

Enron Corporation was pushed to the brink of bankruptcy this week after the once-mighty energy trading company's credit collapsed and its main rival backed out of an $8.4 billion buyout plan.

News that Enron was being spurned by Dynegy Inc. sent its stock price spiraling off 85 percent to close at 61 cents on Wednesday. Just a year ago, stock of the nation's largest buyer and seller of natural gas traded at $85 per share.

The meltdown made bankruptcy seem inevitable for a company that just months ago was the country's seventh biggest in revenue. Enron fortunes crumbled rapidly after revealing questionable partnerships and admitting it overstated profits for four years.

However, Enron Wind should not be threatened by the financial problems, company officials report.

"We don't think it will affect us significantly since we operate independently," said Mary McCann, communications specialist for Enron Wind.

Enron Wind operates what has been the world's largest wind energy farm, based in Alta and stretching north through the western part of Buena Vista County. Enron Wind manufactured the wind turbines and operates the plant, which is owned by another company.

"As far as our company, we're global and we're financially strong with great prospects," McCann said of Enron Wind and the local windfarm. "We don't think (Enron Corp.'s financial problems) are going to affect us."

McCann said Enron Wind could be affected by vendors and customers concerned over Enron Corp.'s finances, especially if there is a panic a number demand immediate payment.

The two companies which purchase power from the Alta windfarm are not concerned about their extended contracts with Enron Wind. MidAmerican Energy along with Alliant Energy purchase electricity generated by the wind farm at Alta.

Dan Presser, spokesperson for Alliant Energy, said it will be "business as usual" in regards to its contract with Enron Wind for power at the Buena Vista County windfarm.

"We have a contract in place (for purchasing power from the windfarm)," Presser said. "It should have no impact on how we operate or the power we purchase."

The financial problems Enron Corp. should not affect who its subsidiaries do business. "All of the contracts that we have will continue to be played out as if nothing's going on," Presser said.

"When we have a contract in place it continues to go and we'll continue to get energy that our customers need," he said. "As far as we're concerned, our customers will continue to get the service that they're accustomed to."

MidAmerican Energy Co. officials say the financial collapse of Enron should have no impact on Iowa electricity and gas users.

Kevin Waetke, director of corporate communications with MidAmerican Energy, said he does not envision any impact from Enron Corp.'s financial problems since the operations of the windfarm are a "completely separate legal entity from Enron Corporation."

"MidAmerican is certainly going to live up to its contract agreements to purchase output from the windfarm in Alta," Waetke said. "We don't see any changes at all.

"Our number one goal here is to ensure our customers (that) MidAmerican will not see significant impacts as our dealings with Enron are concerned, and that extends down to contracts for wind power," Waetke said. "The output from the windfarm is very valuable in terms of the electricity it supplies our customers, and we like the renewable nature of it."

At the national level, Enron Corp. is considering whether it should pursue bankruptcy protection. Additionally, the embattled energy company faces the prospect of lengthy congressional scrutiny in the wake of its unprecedented collapse.

Rep. Billy Tauzin, chairman of the House Energy and Commerce Committee, on Thursday announced hearings into Enron's accounting practices and into what impact the company's problems might have on electricity and natural gas markets.

"We're very interested in how the company handled its internal books," said Kenneth Johnson, a spokesman for the Louisiana Republican. Johnson said the committee's general counsel would investigate circumstances leading up to the collapse.

Experts predicted bankruptcy was the only option for the once-mighty energy trader.

"I would assume it would lead to a sale of the company, which was coming anyway," said Jay Westbrook, a bankruptcy expert who teaches at the University of Texas School of Law.

"Bankruptcy provides a lot of protections that makes it easier to do, and it buys time to find out what this company's really worth."

Stunned employees tried to find hope in the fact that Enron had yet to make a bankruptcy filing. But analysts said Enron desperately needs cash and credit, and will have difficulty finding much of either.

"It's the end of Enron, no question about it," said Gordon Howald, an analyst at Credit Lyonnais Securities in New York. "I don't know who else could step in."

In quick succession Wednesday, two rating agencies dropped Enron's credit rating, forcing it to pay billions of dollars in debt it probably can't afford. Dynegy immediately backed out of its acquisition plan after several days of efforts to renegotiate the deal.

With reports from the Associated Press.

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