FYI - other market participant comments.

---------------------- Forwarded by Jean Ryall/NA/Enron on 02/14/2001 06:15 
PM ---------------------------


"Knox, Jeffrey" <jknox@sel.com> on 02/14/2001 05:20:50 PM
To: "'vpriestley@newenergy.com'" <vpriestley@newenergy.com>, 
sbertin@newpower.com, rkittel@enron.com, lorraine.bucci@exeloncorp.com, 
pkeene@enron.com, mcarroll@texas.net, kmagrude@newpower.com, 
gillan.taddune@greenmountain.com, "Weller, Andrea" <AWeller@sel.com>, 
jean.ryall@enron.com, "Knox, Jeffrey" <jknox@sel.com>, 
stevedavisconsulting@austin.rr.com
cc: Ron.McNamara@enron.com 

Subject: RE: Enron's View on the ERCOT Structure


Vanus,

I sent an email to Marianne that I thought I'd Cc'd to everyone (evidently
not).  I am (that is "we" are, at the mighty Strategic Energy) in agreement
with Enron as well.  The ability to "cover" in the hour-ahead or "spot"
market is not only desirable, but an important option when managing a
portfolio like most of us will.  A good spot market helps to set the numbers
for the rest of the short term trading (dailies, bal. week, bal. mo), and
lets each participant decide on, and be accountable for, their own plan of
action.  And frankly, the more flexibility we can have as far as covering
load or even wholesale transactions the better.  I'd like to be able to
decide if I want to go long, short or flat next hour rather than HOPE for a
good Balancing Market clearing price.
Options good, take what you get..bad.
Sorry Marianne you had to hear it twice.

Go ARM!
Jeff       
-----Original Message-----
From: vpriestley@newenergy.com [mailto:vpriestley@newenergy.com]
Sent: Wednesday, February 14, 2001 5:08 PM
To: sbertin@newpower.com; rkittel@enron.com;
lorraine.bucci@exeloncorp.com; pkeene@enron.com; mcarroll@texas.net;
kmagrude@newpower.com; gillan.taddune@greenmountain.com;
aweller@sel.com; jean.ryall@enron.com; jknox@sel.com;
stevedavisconsulting@austin.rr.com
Cc: Ron.McNamara@enron.com
Subject: Enron's View on the ERCOT Structure
Importance: High


I've thought it over some and I have to agree with Enron and their view on
the Spot market.  Their may be a devil in the details, but having a liquid
transparent spot market can only help us in a number of different ways:

1.   It will give us leverage (or at least information) when negotiating
bilateral    contracts,
2.   It will reduce the prices for ancillary services and load following
3.   It will allow us to use scheduling more effectively to control our
costs,    and 
3.   It will give us another option in purchasing generation.

Enron's fear is that the imbalance and ancillary service market will be
shallow and illiquid.  I believe that fear is reasonable.  A healthy
robust spot market can mitigate any damage that a short ancillaries market
can do.  It will also provide information and induce transparency which
does not exist in a market that is solely bilateral.  

Conceptually, NewEnergy supports Enron in trying to develop a spot market.
 I would like to hear whether we all can support Enron in this endeavor.

VP