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ENRON ANNOUNCES EXTENSION OF LAW RATES AND PROPOSES DEBT RESTRUCTURING ASSISTANCE FOR CAJUN ELECTRIC POWER COOPERATIVE MEMBERS
FOR IMMEDIATE RELEASE: Friday, February 7, 1997
HOUSTON -- In its proposal to acquire the assets of Cajun Electric Power Cooperative (Cajun), Enron Capital & Trade Resources today announced it has notified the Louisiana Public Service Commission (LPSC) that Enron will extend, at Cajun membersí option, a low-rate price option for an additional ten years beyond the 15 year primary term of the proposal. The price guarantee and extension option are anticipated to cap the rate Cajun members will pay for electricity at four cents per kilowatt hour for up to 25 years.
ìThis extension option further strengthens our position that Enronís proposal is best for Louisiana,î said Ken Rice, Enron Capital & Trade Resources managing director. ìEnron can offer this low cost option because the Enron plan pays off debt owed by the co-ops to the Rural Utilities Service (RUS), a federal agency, in 15 years compared to the 25 years required by either Northern States Power or SWEPCO. By paying the RUS debt sooner, this saves consumers money which would otherwise go to the federal government, while at the same time providing co-op members with guaranteed low cost power for the foreseeable future.î
ìAs the confirmation process continues, we fully expect each of the member co-ops will execute power purchase agreements with at least two and possibly all three bidders, and that Enron will be successful in obtaining agreements from all 12 member co-ops,î said Rice. ìAll agreements signed by all parties, including Enron, will be non-binding until approved by the bankruptcy court.î
Enron also announced plans to assist Cajun members with strategies to restructure debt, principally to meet individual member obligations to the RUS, and to assist the member co-ops in accessing low-cost sources of capital to meet future operating needs.
ìEnron has always been at the forefront in providing innovative sources of financing to the energy industry,î Rice said. ìThe electricity marketplace is demanding alternatives to government lending as deregulation unfolds. Enron is committed to helping Louisiana cooperatives remain competitive, and serving as a financing alternative is a logical extension of that commitment.î
Enron, one of the worldís largest integrated natural gas and electricity companies with approximately $15 billion in assets, operates one of the largest natural gas transmission systems in the world; is the largest purchaser and marketer of natural gas and the largest non-regulated marketer of electricity in North America; markets natural gas liquids worldwide; manages the largest portfolio of fixed-price natural gas risk management contracts in the world; is among the leading entities arranging new capital to the energy industry; owns a majority interest in Enron Oil & Gas Company, one of the largest independent (non-integrated) exploration and production companies in the United States; owns a majority interest in Enron Global Power & Pipelines L.L.C., which is owner and manager of operating power plants and natural gas pipelines around the world; and is one of the largest independent developers and producers of electricity in the world. Enron is traded under the ticker symbol, ìENE.î
For additional information please contact:
Mark Palmer
(713) 853-4738
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