FYI.

Jim
---------------------- Forwarded by James D Steffes/HOU/EES on 07/11/2000 
10:25 AM ---------------------------


Susan J Mara
07/11/2000 09:43 AM
To: Mark Palmer/Corp/Enron@ENRON, Richard Shapiro/HOU/EES@EES, Dennis 
Benevides/HOU/EES@EES, Tim Belden/HOU/ECT@ECT, Robert Badeer/HOU/ECT@ECT, 
Roger Yang/SFO/EES@EES, Sandra McCubbin/SFO/EES@EES, Mona L 
Petrochko/SFO/EES@EES, Jeff Dasovich/SFO/EES@EES, James D 
Steffes/HOU/EES@EES, Paul Kaufman/PDX/ECT@ECT, Bruno Gaillard/SFO/EES@EES, 
Elsa Piekielniak/Corp/Enron@Enron, Scott Vonderheide/Corp/Enron@ENRON, Mary 
Hain/HOU/ECT@ECT, Rob Bradley/Corp/Enron@ENRON
cc:  
Subject: Reuters -- Calif. ISO may vote again on power price cap cut

Oh, Lord!  We have to keep the pressure on -- particularly what a bad idea it 
is to lower price caps in times of resource shortage. Do we have a Jimmie 
Carter analogy we can use?
---------------------- Forwarded by Susan J Mara/SFO/EES on 07/11/2000 09:39 
AM ---------------------------


"Tracey Bradley" <tbradley@bracepatt.com> on 07/11/2000 07:49:39 AM
To: "Ronald Carroll" <rcarroll@bracepatt.com>, <smara@enron.com>
cc:  
Subject: Reuters -- Calif. ISO may vote again on power price cap cut


FYI

Calif. ISO may vote again on power price cap cut


     LOS ANGELES, July 10 (Reuters) - The California Independent System 
Operator (ISO) Board of Governors may try for a third time to pass a motion 
to cut a cap on power prices to $250 per megawatt hour (MWh) from its current 
$500 per MWh.

     "It wouldn't surprise me if in the next few days there is a request to 
add it to the August 1 agenda," a member of the ISO Board of Governors said 
on Monday.

     The California ISO operates most of the state's power grid.

     Last week its governing board voted by 12 votes to nine, with one 
abstention, in favor of lowering the cap but failed to secure the 13 votes 
necessary to pass under the motion under ISO rules.

     The previous week a vote to cut the cap to $250 per MWh failed to pass 
after a 12-12 vote but a new meeting was called after one member, Marcie 
Edwards of the Los Angeles Department of Water and Power, declared she had 
incorrectly cast her vote against the lower cap.

     Two members were absent overseas during last week's vote. One, John 
McGuire of Silicon Valley Power, had supported the cut to $250 at the June 28 
vote. He is due to return from vacation on July 26.

     The other absent member, Daniel Kirschner of the Environmental Defense 
Fund, is due to return from overseas during the next couple of days, sources 
said.

     It was not clear which way Kirschner is likely to vote as he was also 
absent from the June 28 vote. The board at 25 members on the June 28 vote, 
but one member resigned before the subsequent vote.

     Pressure to cut the cap has come from several sources including state 
Sen. Steve Peace, whose San Diego constituents have been angered by sharply 
higher electricity bills recently.

     Under rules governing the deregulation of the state's power industry 
customers of San Diego Gas and Electric are currently the only ones exposed 
to market prices.

     "He (Peace) is getting all kinds of hate mail and is really trying to do 
something," an industry source said.

     San Diego Gas and Electric is a unit of Sempra Energy .

     Rates for customers of California's other two investor owned utilities, 
Edison International's Southern California Edison and PG&E Corp.'s Pacific 
Gas and Electric, are currently frozen.

     Other proponents of cutting the cap including Loretta Lynch, president 
of the California Public Utilities Commission and a close aide to Governor 
Gray Davis.

     San Diego Gas and Electric has called an emergency summit of energy 
market participants -- including power generators, energy service providers 
and representatives of the California Independent System Operator and 
California Power Exchange - on Wednesday to explore solutions to the soaring 
prices.

     Supporters of cutting the cap believe the power market is not "workably 
competitive" and prices rose to excessive levels during a recent heatwave, 
putting an unfair burden on both ratepayers and shareholders of investor 
owned utilities.

     Opponents are led by independent power producers who have argued a lower 
cap could make it more difficult for the state to import power at times of 
shortage.