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Casino operator signs energy deal with Enron

Friday, June 8, 2001 | 10:49 a.m.

Harrah's Entertainment Inc. of Las Vegas said it signed a seven-year energy management and supply contract with energy giant Enron Corp. of Houston.

The pact calls for Enron to supply Harrah's with electricity and natural gas at 16 of its properties in Nevada and six other states, said Harrah's spokesman Gary Thompson. Enron will also provide the company with energy conservation services.

Thompson said Harrah's signed the deal after examining the possibility of volatility in energy prices over the next several years, particularly in Nevada, New Jersey and Illinois.

"We spend $40 million (annually) on electricity and natural gas, and we wanted to lock in some prices that would cut the volatility," Thompson said. "We think it will average out to below market rates over the course of the contract."

Enron's conservation efforts, which will include the installation of more energy-efficient equipment, should save the company more than $2 million per year. "Additional,substantial" savings should come from the company's purchase contract, Thompson said, though he couldn't project an actual figure because that would depend on the market rates of electricity and natural gas over the next seven years.

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