
Date: Fri, 11 May 2001 03:57:00 -0700 (PDT)
From: paul.dawson@enron.com
To: paul.hennemeyer@enron.com
Subject: Re: UK power sector takeovers
Cc: richard.shapiro@enron.com, heribert.kresse@enron.com,
andreas.radmacher@enron.com, richard.lewis@enron.com,
doug.wood@enron.com, peter.styles@enron.com
Bcc: richard.shapiro@enron.com, heribert.kresse@enron.com,
andreas.radmacher@enron.com, richard.lewis@enron.com,
doug.wood@enron.com, peter.styles@enron.com

My skepticism remains - the story was generated as a result of the Minister
getting steamed up about the lack of effective liberalisation in Europe and
barriers to UK takeovers on the continent.  This is nothing new - the DTI
have been whinging about this for years (since EDF first arrived) but
experience has demonstrated that they have little scope to take action if
there isn't a competition case.   Indeed the report itself recognises this:

"Senior government officials said yesterday: "We are looking at ways of
holding up European forays into the UK market. It may not be possible but, at
the very least, we would force Brussels to intervene and impose an
investigation on competition grounds, holding up the process."

In the past it has been difficult to "force Brussels to intervene" if there
is no competition case (and I don't think there's a great one here).  The
only legal option would be to invoke the reciprocity provisions of the
directive. However, given that part-loading of the interconnector is one of
the reasons that prices have climbed under NETA, this would be a major own
goal for the DTI.

We've also confirmed this with DTI officials following the Guardian report.
The source was Dan Corry who is a "special adviser" - read spin doctor - to
the Secretary of State.  Conclusion - it's all pre-election hot air from Hain.

Paul







Peter Styles
