Rick, Linda and I met with Dan Larcamp (Director of FERC's Office of Markets, 
Tariffs and Rates) yesterday.  He made several comments of interest:

Enron's Position on Market Structure

Dan says he's heard from the Enron traders that they like "PJM."  Dan would 
like us to have one of our traders come up to Washington to meet with his 
staff to talk about what attributes of PJM we really like.  For example:  

 - what brings liquidity
 - what benefits does liquidity bring -- to both Enron and utilities with end 
use customers -- how does    liquidity benefit consumers?
 - why do we support PJM over New York and New England
 - what facilitates trades, reduces transaction costs, gives the right 
signals to generators of where to site 


Gas Pipeline Issues

Dan also talked about his concerns with affiliate issues on the gas side.  He 
said INGAA has not been particularly helpful in the debate -- they disagree 
that changes are needed and do not provide much to the discussion.  Dan said 
he prefers structural changes over Code of Conduct fixes -- he doesn't want 
to have to look under rocks for violators.  He also questioned whether, if 
pipeline executives' compensation is based on the company's profits (through 
options and salary) which are derived in part from trading, whether this 
provides those executives with incentives to favor their affiliates.  

Regulatory Gap

Dan is concerned that there is a regulatory gap between FERC, the CFTC and 
the SEC.  He believes there is a large block of transactions -- primarily 
bookout transactions -- that are not being regulated by FERC or the CFTC.  We 
discussed that there is a physical component to bookouts, but he is still 
concerned that no one is overseeing these transactions.

He also compared FERC to the SEC and said they do not have the expertise or 
staff to provide market monitoring the way the SEC does.  I think FERC has 
been compared to the SEC recently and Dan's comments may have been somewhat 
defensive in response to those comparisons.

Open Access

Dan is a supporter of open access and hopes that the new Commission make up 
will lead the Commission to addressing and fixing the structural problems in 
the industry.  They have been frustrated by the amount of time and attention 
California has taken, and he is hopeful that they will be able to get 
California behind them and focus on transmission issues.  He believes FERC 
needs to have jurisdiction over native load and intimated that he would not 
be unhappy if FERC lost the Supreme Court case.

EPSA 

Dan said EPSA needs to be more focused.  We need to decide what issues are 
most important to the group and focus on those issues.  He also expressed 
concern that EPSA is always negative and does not give FERC enough credit for 
the progress it has made.  He also said EPSA needs to get the word out on the 
Hill that FERC's actions, right or wrong, are having the desired result 
(lower prices).

Overall, it was a good meeting.  Dan was happy to meet with us and said he 
and his office would like to hear from us about issues whenever we would like 
to visit with them.

Please let me know if you have any questions or comments concerning the 
foregoing.

Sarah