Greetings:
The CEC issued a report today that says that unless the ISO experiences
"extraordinarily high" temperatures next year there is no supply problem.
IEP is reviewing this document and will provide further correspondence as we
prepare a response.

If you have any questions please feel free to give me a call.
Thanks,
Katie Kaplan
Manager of State Policy Affairs
Independent Energy Producers Association
(916) 448-9499



The report can be found at:
http://www.energy.ca.gov/reports/2000-11-20_300-00-006.PDF

The Press Release:
California Energy Commission Report Released

Summer of 2001 Electricity Supplies Better Than
Expected



Sacramento -- California should have enough power to meet its
electricity demand next summer, unless the State experiences extraordinarily
hot
Weather, according to a study released today by the Energy Commission.

"With new resources coming on-line and new conservation measures taking
effect, next summer looks better than expected, if we manage our
resources properly," said Steve Larson, Energy Commission Executive
Director.

The study, prepared as part of a response to legislation enacted in
September, quantified the amount of electricity demand and supply expected
in the
summer of 2001. "We produced this analysis from the ground up,"
commented Larson. "We looked at every power plant and source of electricity
available to the State to give us a realistic appraisal of where we
stand for next summer. Energy Commission staff projected expected peak
electricity
demand using three temperature scenarios."

The analysis indicated that under the "most likely" temperature
conditions, next year's electricity peak demand will be 47,266 megawatts,
which reflects
a reduction of 220 megawatts of demand because of new utility and state
energy conservation initiatives. Operating reserve requirements add an
additional 2,200 to 3,000 megawatts demand in order to provide a 7
percent margin, raising the generation needed to a minimum of 50,303
megawatts.

If California experiences a warmer than normal summer, the electricity
system will require 48,845 megawatts plus operating reserve requirements,
which raises the total to 51,882 megawatts. Under this scenario, total
expected resources are 52,550 megawatts. Should the State experience
extremely hot temperatures, which has a 1-in-10 year likelihood of
occurring, 53,104 megawatts will be needed (50,068 megawatts of demand plus
operating reserve requirements), with expected resources of 52,190
megawatts.

An additional 1,888 - 3,087 megawatts of potential generation is
currently under development and may be available for part or all of the
summer.

The Energy Commission's demand forecast takes into consideration
expected economic conditions and household growth in the State. These two
factors influence demand for air conditioning which drives summer peak
demand for electricity. The Energy Commission's staff supply outlook
includes
existing in-state and out-of-state generation; new power plants
expected to be on-line and generating electricity by August 1, 2000; and
electricity
imports and exports. The supply outlook also includes new renewable
energy projects and energy efficiency measures and initiatives made possible
by
funding under AB 970, which was approved by the Governor in September,
2000.

California's electricity demand is growing at 2 percent per year. To
ensure that there are adequate supplies of electricity to meet future
demand, it will
be important to add new, efficient generation as well as to implement
energy efficiency and demand reduction strategies.

Since restructuring occurred in March 1998, the Energy Commission has
approved six major power plant projects with a combined generation
capacity of 4,708 megawatts. In addition another 15 electricity
generating projects totaling over 7,000 megawatts and an estimated capital
investment
of more than $4 billion are being considered for licensing by the
Commission.

The report, Summer of 2001 Forecasted Electricity Demand and Supplies,
is available on the Energy Commission's Web Site at: