MEMORANDUM

TO: Regulatory Affairs Committee
       Power Marketers Working Group

FROM: Joe Hartsoe, Regulatory Affairs Committee Chair
            Bob Reilley, Power Marketing Working Group Chair
            Julie Simon, Vice President of Policy

DATE: March 19, 2001

RE: EPSA Draft Comments on Staff's Proposed Market
      Monitoring and Mitigation Report
      ? Filing Due March 22nd
      ? Conference Call on Wednesday, March 21st, 2:00 p.m.
        (EST)

Attached are draft EPSA comments in response to the Commission Staff's 
recommendations on market monitoring and mitigation in California.  As 
explained in an earlier memo, these proposals are designed to replace to $150 
price break set out in the Commission's December 15th order, which is 
scheduled to run only until April 30th.  While supporting certain aspects of 
the Staff's recommendations, including the extremely limited application and 
the use of a single price auction, EPSA's comments focus on the failure of 
the Commission's cost-based approach to capture the full costs of capacity, 
scarcity, opportunity cost, risk and operating costs and the problem of using 
a cost-based approach during periods of scarcity.

Comments for rehearing are due at FERC on Thursday, March 22nd.  We will 
discuss this draft on our regular Wednesday afternoon conference call on 
March 21st at 2:00 p.m. (EST).  To access the call, dial 1-800-937-6563.  Ask 
for the Julie Simon/EPSA Call.  If you have any questions or concerns, or any 
comments on the draft, please contact Julie at 202-628-8200 or 
jsimon@epsa.org.


Attachment

 - CA Mkt. Monitoring Recommendation Filing.doc