WPTF is submitting a K-A filing.  It supports Hebert's proposal but added my 
proposed language to start with $350 or $600 to encourage peakers.  The final 
is attached.  Here is the Table of Contents for quick reading.  A technical 
Appendix will provide lots of support for how the utilities behaved this past 
summer.

A.  The Requirement to Sell Into and Buy from the PX 2
B.  The Underscheduling of Loads and Resources 4
C.  Governance of the PX and ISO 4
D.  Price Mitigation and the &Soft8 Cap 6
1.  Price Caps Are Generally Ineffective In Achieving Lower Average Energy 
Prices 7
2.  Price Caps Deter Needed Investment in New California Generation 8
3.  The $150 Soft Cap Puts Power Marketers at Risk. 9
4.  How Can the $150/MWh &Soft8 Cap be Made More Palatable? 10
    a. The Sunset Date Must Be Observed 11
    b. The Soft Cap Should Begin at a Price Higher Than $150/MWh 11
    c. The Soft Cap Should Be Escalated 12
E.  Refund Liability 12
F.  What Were The Real Causes of The Recent Price Increases? 14
1.  The Staff Report Identifies the Well Known Factors 14
2.  However, There Were Other Factors That Also Contributed Significantly to 
the Higher                                          Prices Experienced in 
California.

On refunds, WPTF is completely consistent with our filing. It argues:
?          facts do not support a claim for refunds with respect to Summer 
2000 rates.   
? When a market clears at or below the soft cap, there should be no refund 
liability for any seller unless that seller is shown to have manipulated the 
market, abused market power, or colluded.
? When suppliers bid and are paid at rates above the soft cap, the 
definitions of marginal and opportunity costs must be clarified to recognize 
how units are dispatched throughout a year, that a contribution to a 
generator,s actual fixed costs must be incorporated into the equation for 
marginal costs, that forward contracts contribute to the &marginal costs8 of 
a sale, and that opportunity costs include broad market forces such as prices 
in competing markets. 
?  the ability to sell above marginal cost is not evidence of market power or 
market abuse.
? ensure that transactions above the soft cap are deemed closed and no longer 
subject to refund within a reasonable time, such as one to two months.  
?  the November 1 Order extends beyond the 15-month potential refund period 
permitted by the Federal Power Act and should be shortened to conform with 
the requirements of the Act.  

The filing also has sections opposing load-differentiated price caps and a 
return to cost-based rates.  WPTF asks FERC to clarify the election process 
on the new Boards to ensure that governmental entities exert no more 
political pressure.

BUT -- I HAVE TO SHOW YOU MY FAVORITE PART OF THE FILING -- READ ON!!!!!

D.  Cost Based Rates - - A Return to Regulatory Luddism

The original Luddites were bands of skilled textile workers who had been 
laid-off after advances in technology replaced the need for them.  In 
reaction to being laid-off, they burned mills, terrorized the owners and then 
destroyed the steam and water-powered labor-saving devices that had cost them 
their jobs.  The uprisings took place mainly in the center of the wool region 
in England from 1811-16.  In other words, Luddites were casualties of the 
English Industrial Revolution. 
Ned Ludd was the movement,s mythical founder -- an apprentice who smashed his 
shearing frame with a hammer.  These wooden frames were a new technology 
which allowed heavy shears to be held in balance to trim a rough layer of 
threads from woven cloth.  Although Ned didn,t break the machine to make a 
political statement, he inadvertently became the first practitioner of 
Luddism.  Thirty years later in pursuit of a naive back-to-basics theme, 
Luddites organized and rioted against technological advances in the English 
textile industry.  The Luddites rioted in rejection of technology that was 
seen as threatening to their way of life and livelihood. 
Now, in California, we have regulatory Luddites. The few parties who fall in 
this old world camp once controlled the energy investments in California and 
now fear the advent of competition, bemoan its reduction (or elimination) of 
their previous regulatory overview and seek to smash restructuring as poor 
Ned smashed his machinery.  Their arguments are reactionary, their political 
tactics oppressive.  
By 1816, the English government put down the Luddites with hangings and 
transportation out of the region.  In the absence of such remedies today, 
WPTF simply urges the Commission to hold true to its course.  and on ... 



	James D Steffes
	11/22/2000 07:30 AM
		
		 To: Alan Comnes/PDX/ECT@ECT, bernadette Hawkins/Corp/Enron@Enron, 
gfergus@brobeck.com, Christopher F Calger/PDX/ECT@ECT, David 
Parquet/SF/ECT@ECT, Debra Davidson/PDX/ECT@ECT, Dennis Benevides/HOU/EES@EES, 
Ginger Dernehl/NA/Enron@Enron, Jeff Dasovich/NA/Enron@Enron, Jeff 
Richter/HOU/ECT@ECT, Joe Hartsoe/Corp/Enron@Enron, Joseph 
Alamo/NA/Enron@Enron, Jubran Whalan/HOU/EES@EES, kcurry@bracepatt.com, 
lanai.wolfe@enron.com, Marcia A Linton/NA/Enron@Enron, Mary Hain/HOU/ECT@ECT, 
Maureen McVicker/NA/Enron@Enron, Mona L Petrochko/NA/Enron@Enron, Neil 
Bresnan/HOU/EES@EES, Paul Kaufman/PDX/ECT@ECT, rcarroll@bracepatt.com, 
Richard Shapiro/NA/Enron@Enron, Robert Badeer/HOU/ECT@ECT, Sarah 
Novosel/Corp/Enron@Enron, Steven J Kean/NA/Enron@Enron, Susan J 
Mara/NA/Enron@Enron, Tim Belden/HOU/ECT@ECT, Richard Shapiro/NA/Enron@Enron
		 cc: 
		 Subject: Enron's Response Today - Key Point to Focus On

As I've been thinking about our response today, I would like Enron to focus 
on making sure that the California (WSCC) markets are as good a possible for 
business over the next 15 to 24 months.  Following that idea, I think that 
the key points are (1) clarifying/raising the soft cap and (2) reducing the 
burden/risk of the prospective refund period.

I know that we had discussed leading off with the debate over market power / 
retroactive refunds, but I think that (a) FERC is not inclined to do much 
more on this issue, (b) FERC wants to fix the market as much as it can given 
the current political realities, and (c) if retroactive refunds become an 
issue, we still have our full compliment of resources to later fight this 
fight.

I would recommend that the pleading and Alan's testimony be modified to bring 
these issues to the top of the ticket.   We should still include all of our 
other arguments.

Finally, I want to make sure that Enron is taking the right position by 
quietly supporting a $250/Mwh soft cap with safe harbor fixes?  Sue Mara, can 
you please try and find out what EPSA, IEPCA, and WPTF are going to file?  I 
want to make sure that we are in the ball park on this issue but not getting 
too soft.

Jim