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AMTRAK, ENRON SIGN WHOLESALE PACT FOR PURCHASE OF ELECTRIC POWER
FOR IMMEDIATE RELEASE: Thursday, May 1, 1997
HOUSTON -- Amtrak and Enron Capital & Trade Resources (ECT), a subsidiary of Enron Corp., of Houston, today announced an agreement that will enable Amtrak to buy electric energy at reduced rates and provide millions of dollars in savings annually to commuter railroads that run electric-powered trains on the Northeast Corridor.
Under the new wholesale contract, Amtrak would purchase electric energy from Enron, reducing its electric traction power costs by more than half. The electric energy would be used to run nearly 600 Amtrak and commuter trains a day on the Northeast Corridor between New York and Washington and another 100 commuter trains on the Keystone line between Philadelphia and Harrisburg. Amtrak spends approximately $40 million a year for electric traction energy.
"This agreement demonstrates Amtrak's commitment to aggressively pursue all business plan initiatives which will cut costs and increase revenues, enabling Amtrak to continue providing high quality passenger rail service," said George D. Warrington, president of Amtrak's Northeast Corridor.
Enron is the largest non-regulated power marketer in the United States with annual revenues of $13 billion and $16 billion in assets. The new contract, awarded after a request for proposals was issued by Amtrak, will continue to provide the same reliability of electric service for the Northeast Corridor.
"Since the wholesale power market opened to competition in 1994, Enron has been providing electricity at significant savings to other wholesale electric users, namely investor-owned utilities, power cooperatives and municipalities," said Kenneth D. Rice, chairman and CEO, ECT - North America. "Enron looks forward to providing those same benefits of competition -- lower electricity prices -- to Amtrak."
Amtrak is a wholesale purchaser of power in that it buys energy from a number of suppliers in interstate commerce. Amtrak comingles the purchased energy and transmits it over its own transmission system of power lines in the Northeast Corridor and then resells more than half the energy to commuter rail authorities under set-rate contracts, Warrington said. The four commuter customers purchasing electric traction energy from Amtrak are NJ TRANSIT, the Southeastern Pennsylvania Transportation Authority (SEPTA), Maryland Mass Transit Administration MARC service, and the Delaware Department of Transportation which purchases power for extended SEPTA service. "What is particularly exciting about this contract will be our ability to provide significant cost savings to the commuter railroads," Warrington said. "A priority for Amtrak over the past two years has been building closer relationships with the Northeast commuter railroads. The continuing growth of the Northeast Corridor and service improvements by all users depend on strong partnerships between Amtrak and the commuter railroads."
The contract is consistent with the nationwide trend towards energy deregulation, which has been fostered by many state jurisdictions as well as federal authorities, to encourage economic development and cost savings for consumers.
Enron Corp. is one of the world's largest integrated natural gas and electricity companies. Enron is traded under the ticker symbol, "ENE."
Amtrak is America's national passenger railroad, serving more than 50 million intercity and commuter customers a year in 45 states.
For additional information please contact:
Rick Remington (Amtrak)
(215) 349-2735
Terrie James (Enron Corp.)
(713) 853-7727
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