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Enron Scores With Two More Management Deals

Enron Scores With Two More Management Deals

Enron Energy Services continues its quest to shore up energy management agreements with as many customers as it can. On the heels of an announcement Tuesday that it had signed a 10-year agreement with Prudential Insurance of America, the Enron Corp. subsidiary announced Wednesday that it had pocketed a $1 billion, 10-year energy agreement with the U.S. facilities of Quebecor World, the world's largest commercial printer. The agreement expands Enron's original $250 million five-year contract with World Color Press, signed in 1998. World Color Press was purchased by Quebecor Printing Inc. last August.

Under the agreement, Enron will supply and/or manage electricity and natural gas at more than 60 Quebecor World facilities in the United States. It also will identify, analyze, design and implement energy infrastructure improvements.

Marc Reisch, chairman and CEO for Quebecor World North America, called the agreement a "true alliance of industry leaders." He said that World Color's previous experience with Enron in the past two years have his company confidence in Enron's energy management expertise.

Said Enron Energy Services CEO and chairman Lou Pai: "This agreement enables Quebecor World to outsource a non-core function and leverage the scale and capabilities of Enron across its manufacturing platform."

The deal announced Wednesday joins a roster of top names collected by Enron Energy Services in the last year. While some companies avoid the limelight, according to Enron's Peggy Mahoney, the ones that have publicly announced their energy management deals with Enron include Simon Brand Ventures, the nation's largest retail real estate investment trust (REIT) which signed a $1.5 billion 10-year alliance; Owens Corning, which announced a $1 billion, 10-year outsource agreement for total energy management services at 20 manufacturing facilities throughout the United States; The Chase Manhattan Corp., which signed a $750 million, 10-year agreement for energy management services for 860 of Chase's facilities nationwide; IBM, which signed a $610 million, 10-year agreement to provide electricity for several IBM facilities; and Sonoco, which signed a $210 million, six-year energy management agreement to provide savings at 150 manufacturing plants.

The 10-year agreement with Prudential Insurance of America calls for Enron to supply or manage the supply of electricity and natural gas, and provide related energy management services for Prudential's 21 corporate-owned office buildings in Arizona, Connecticut, Florida, Illinois, Minnesota, New Jersey and Pennsylvania. No monetary figures were released by Prudential.

The two also agreed to work on energy efficiency projects to provide more economic and environmental benefits at selected Prudential facilities across the country. Prudential has increasingly pursued outsourcing arrangements that enable it to focus more fully on its core businesses. Along with energy management, Prudential outsources property management, food services, travel, architectural and engineering.

Enron's Mahoney said agreements put together so far this year puts the services division on track to reach nearly $16 billion in energy marketing agreements in 2000, which would be nearly double from the agreements in 1999, which totaled $8.5 billion. She said Enron Energy Services had $3.8 billion in energy agreements in 1998.

Carolyn Davis, Houston

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