"There's some threat <sic> that gas and petroleum (oil) supplies are getting dangerously low ... "... At some point there has to be a limit to the sale of electricity and natural gas to people who won't pay a good price for it." (Paraphrased) Enron's Ken Lay on California Electricity Crisis: Davos Comment Davos, Switzerland, Jan. 26 (Bloomberg) -- Kenneth Lay, chairman of Enron Corp., the world's biggest energy trader, made the following comments about the power crisis in California that has pushed the state's two largest utilities, Southern California Edison and Pacific Gas & Electricity Co., close to bankruptcy. He also addresses concerns that Enron's contributions to the Republican Party are aimed at garnering special treatment from the administration of President George W. Bush: The California crisis ``is a serious problem but I don't know if'' it's going to be serious enough to shave a half a percentage point off the nation's gross domestic product, as some economists have speculated, he told Bloomberg News in an interview at the annual meeting of the World Economic Forum. ``It's mainly impacting California, but California is one-sixth of our economy.'' ``I've asked CEOs of companies out there (who have said) they're having to shut down early. Their operations are being interrupted. There's some threat that gas and petroleum supplies are getting dangerously low. Clearly it will have an impact, and it'll be a negative impact.'' ``It has to be mainly be solved in California. It is a California problem, though it's somewhat a national problem just because it's such a big state. If we could help that would be great.'' California must now begin negotiating contracts for bids it received in a power auction, Lay said. ``Indeed, if those are credible, valid offers from creditworthy counterparties or companies, and there aren't caveats or conditions, they ought to go ahead and start signing up for that.'' ``Forcing people to continue selling electricity and natural gas to people that aren't paying for it has to have a limit to it at some point.'' On the possible delay of Enron's sale of Portland General Electric: Enron on Jan. 25 said the $3.1 billion sale may be put off because proposed buyer Sierra Pacific Resources might not be able to sell a power plant stake as needed to win regulatory approval. California last week barred public utilities from shedding generators until 2006 to help keep the crisis from deepening. The order ``was mainly intended for the utilities in California to make sure they didn't sell any of their generating assets. The way they define public utility in the bill could impact Sierra Pacific because they distribute electricity in California that is generated in Nevada.'' On concerns Lay has tried to buy access to President Bush: ``I gave money to the campaign because I believe in that candidate and his policies and not to get some kind of favor out of it,'' he said. Lay gave $2,000 directly to Bush and more than $275,000 in soft money to the Republican Party -- part of $1.6 million contributed during the election by Enron and its officers, two- thirds of which went to Republicans, according to campaign finance records. Lay was among the business leaders who participated in an economic forum held by Bush in Austin, Texas, earlier this month. ``I briefed (Energy Secretary) Spencer Abraham on the problem. I have not talked to the president at all on this problem, and I don't intend to.''
