India Enron Plant Stops Production

A power plant run by Enron Corp. has stopped producing electricity in western India following a state utility's decision to stop buying power from the U.S. power giant, a state official said Wednesday.

A top official from the Maharashtra State Electricity Board told The Associated Press on condition of anonymity that the plant is probably closed, since the state is the plant's only customer.

The official said the plant could begin generating electricity once talks between the government and Enron officials resolve a dispute over a 1995 power purchasing agreement.

The state board stopped buying power from the 2-year-old naphtha plant Tuesday, amid accusations of exorbitant prices charged by Dabhol Power Company, Enron's Indian unit. This came five days after the MSEB notified the company it was canceling an agreement to buy power.

The western Indian state of Maharashtra would not suffer a power shortage following the state utility's decision to stop buying Dabhol electricity, the board official said.

However, a Dabhol Power Company spokesman declined to comment on the status of the plant, located 210 miles south of Bombay.

The company had earlier said the state-run utility had no legal right to cancel the purchase agreement.

Federal and state officials are currently negotiating with the state utility and Enron officials about the power purchasing agreement.