---------------------- Forwarded by Robert Badeer/HOU/ECT on 06/14/2000 02:14 
PM ---------------------------
From: Greg Wolfe on 06/08/2000 03:48 PM
To: Chris H Foster/HOU/ECT@ECT, Tim Belden/HOU/ECT@ECT, Robert 
Badeer/HOU/ECT@ECT, Jeff Richter/HOU/ECT@ECT
cc:  
Subject: *DJ Calif. PUC Approves Utilities Buying Pwr Out Of CalPX


---------------------- Forwarded by Greg Wolfe/HOU/ECT on 06/08/2000 05:52 PM 
---------------------------
   
	Enron Capital & Trade Resources Corp.
	
	From:  "Pergher, Gunther" <Gunther.Pergher@dowjones.com>                      
     06/08/2000 01:10 PM
	

To: "Pergher, Gunther" <Gunther.Pergher@dowjones.com>
cc:  (bcc: Greg Wolfe/HOU/ECT)
Subject: *DJ Calif. PUC Approves Utilities Buying Pwr Out Of CalPX 



17:46 GMT  8 June 2000
 *DJ Calif. PUC Approves Utilities Buying Pwr Out Of CalPX

 Mandatory Buy Requirement Ends For Utilities

 LOS ANGELES (Dow Jones)--The California Public Utilities Commission
approved a controversial plan Thursday morning that
 will allow the state's three investor-owned utilities to buy power outside
the Caliifornia Power Exchange market structure.

 The commission voted 3 to 2 in favor of the measure. Commissioners Henry
Duque, Richard A. Bilas and Josiah Neeper voted
 in favor of the draft order.

 The decision relieves the three investor-owned utilities, Sempra Energy
unit San Diego Gas & Electric (SRE), Pacific Gas &
 Electric (PCG) and Edison International unit Southern California Edison
(EIX), from their mandatory buy requirement that
 became effective in March 1998 when the state moved to a deregulated
competitive market. Originally the mandatory buy
 requirement was set to end in 2002, when all three utilities recovered
their stranded costs.

 "This decision is not as earth shattering as it sounds," Commissioner
Bilas, one of the author's of the draft order, said at
 Thursday's meeting. "I am not criticizing the power exchange. But this will
result in lower prices patched through to bundled
 customers."

 Trading platforms likw Automated Power Exchange and the New York Mercantile
Exchange can now compete directly with the
 CalPX, which currently controls 85% of the state's wholesale power market.
The utilities can buy power from other "qualified
 exchanges" through an advice letter process.

 Utilities Can Trade With Other Exchanges Now

 California's big three utilities can buy power outside the CalPX market
structure immediately, through an advice letter process,
 which means the utilities have to notify the commission of their intent to
trade power with qualified exchanges such as APX,
 Nymex or Bloomberg.

 The commission said the exchanges have to offer the same services as the
CalPX - forward, daily and monthly trading, and
 anonymity to prevent self dealing between the buy side and sell side - in
order to meet the criteria for a qualified exchange.

 Exchanges would also have to be independently owned from the utilities.
Enron Online would not meet the criteria for a
 qualified exchange, commissioners said.

 The advice letter only needs to be filed once and s merely a formality that
would not need to be approved by a majority of the
 commission.

 Mark Huffman, PG&E senior attorney for regulatory affairs, told Dow Jones
Newswires that his company "will quickly start
 looking at other exchanges and see what's out there. We're going to start
the advice letter process."

 SoCal Edison and SDG&E said they will do the same.

 Ed Cazalet, chairman and founder of APX, said Thursday's controversial
three-to-two vote in favor of the draft order "creates a
 tremendous opportunity for APX."

 "It allows us to bring the benefits of Silicon Valley technology to
California," Cazalet said. "This is really about bringing
 e-commerce to the market."

 E. Jesus Arredondo, however, disagreed, saying "selling into our market
doesn't cost anything and selling into the APX market
 costs 20 cents per megawatt-hour."

 Commissioner said having other exchanges will not only result in lower
electricity prices, but it will allow the buyer and seller
 the chance to see prices before making the purchase.

 CalPX's block forward prices are not immediately published, Commissioner
Bilas said.

 Reacting to the ruling, CalPX Chief Executive Officer George Sladoje said
"Today's split vote by the CPUC in favor of
 accelerating the introduction of other qualified exchanges is not
well-reasoned and it may in the end prove counterproductive."

 -By Jason Leopold; Dow Jones Newswires (323) 658-3874;
jason.leopold@dowjones.com Copyright (c) 2000, Dow Jones &
 Company Inc

G_nther A. Pergher
Senior Analyst
Dow Jones & Company Inc.
Tel.  609.520.7067
Fax. 609.452.3531

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