the market has fallen and is still falling precipitously.  for example, power 
for tomorrow is trading for about $70/MWh on peak and $25/MWh off-peak.  
implementing price caps now would actually be harmful.  peaking units make no 
money.  we are likely to return to a more normal market, particularly after 
the summer, if we aren't there already.  with the forward curve crashing the 
way it is and price caps it makes no sense to build peakers.  what are the 
odds of a balance of the year price cap?

 -----Original Message-----
From:  Steffes, James  
Sent: Tuesday, May 29, 2001 8:49 AM
To: Belden, Tim; Comnes, Alan; Shapiro, Richard; Kaufman, Paul
Subject: Price Caps in the West

Tim --

What are your current thoughts on wholesale hard price caps for the entire 
West?  

First, the politics are clearly moving toward some compromise with the 
Democrat takeover in the Senate and the "at-risk" Republicans in the House 
(California delegation).  I think that the Administration is struggling for 
some "solution".

Second, given FERC's order, it appears that for many hours caps are already 
in place.

Third, with market prices moving lower, this may want be a non-event.

Finally, I would think that a region-wide solution is simple to understand 
and administer.

Please let me know your thoughts.  I don't know that Enron would ever 
publically endorse such a proposal, but we may signal that we aren't opposed?

Jim