---------------------- Forwarded by Steven J Kean/NA/Enron on 05/01/2001 
07:35 AM ---------------------------


John Sherriff@ECT
05/01/2001 02:15 AM
To: Jackie Gentle/LON/ECT, Steven J Kean/NA/Enron, Richard 
Shapiro/NA/Enron@Enron, Fiona Grant/LON/ECT@ECT
cc: Lauren Urquhart/LON/ECT 

Subject: Entry tax to dergulating markets



The Forbes April 30, 2001 editorial piece "Slow Starters" on page 24 discusses
the "entry tax" which is the capital burden for starting a new business.  It 
states that rich countries
on average have relatively low entry costs while poor countries have 
stagering entry costs caused
by corruption, endless beuacracy, and cost of delays.  These "entry hurdles" 
and asscoiated costs
do not produce any tangible benefits for consumers, workers or the 
environment.

We might want to make the analogy of "entry tax" for new deregulated gas & 
power markets.  Things like
negotiated third-party access (rather than regulated TPA) substantially slow 
the speed of new entrants and hence deter competition.
Negotiated TPA creates uncertainty for new entrants (they never know what 
they are going to get) and clearly slows
the new comers down.

I will send you a copy of the Forbes piece.

John