I am curious about the formula used in the last sentence of your first 
paragraph.  Is FERC trying to find a "cost based" price, above which is 
"unjust and unreasonable"?  Aren't these companies entitled to charge 
market-based rates, which may be above cost in the event of scarcity?  
thanks  mcs

My team:  FYI, below.   mcs

Beverley - please print the attachments for my review upon my return.   
thansk  mcs


From: Steven J Kean@ENRON on 12/03/2001 08:52 CST
To: Mark Schroeder/LON/ECT@ECT
cc: Jeff Dasovich/NA/Enron@Enron 

Subject: Re: news/updates  

I am attaching the FERC order and staff recommendations.  The order provides 
for $69 million in "potential" refunds (either pay up or provide cost 
justification).  Enron was not named as one of the 13 overcharging parties, 
but PGE was ($3.18 million).  It's not over yet, though.  The order deals 
only with Jan 01 and promises further orders regarding Dec 00 and benchmark 
prices through April 01.  The prices used to determine refunds were fairly 
high ($273/mwh based on gas prices, emissions costs and an assumed heat rate 
of over 16000).

With respect to sales to California, we have concluded at least one short 
term sale and have talked with Cal Dept of Water Resources about longer term 
deals, but we were still struggling with credit issues, last I heard.  I'm 
copying Jeff Dasovich because I'm sure he has more up to date information.






	Mark Schroeder@ECT
	03/11/2001 02:11 PM
		 
		 To: Richard Shapiro/NA/Enron@Enron, Steven J Kean/NA/Enron@Enron
		 cc: 
		 Subject: news/updates

In the press, I saw two news stories that I wondered if we (Enron) had any 
role/hand in, and what was the offical "spin" in both cases.  1)  The FERC 
Order requiring something like 55-65 million dollars in refunds by generators 
(or did it include traders) for overcharging in California in December, if I 
recall my facts/news stories correctly, and 2) the reports of 40 companies 
entering into 10-year contracts with California (touted by Davis).  Was Enron 
a contracting party?  Do we think this is a good solution (I think I know the 
answer, but defer to your lead on this, so we stay on your message)?  thanks  
mcs