Traders et al.

Here is information from John Shelk of our  D.C. office on the liklihood of price caps.  The "news" about the market curves falling (which makes caps pointless) is starting to filter out.  However, in the mean time, the basic buzz is that increased power from the Dems in D.C. will likely lead to a vote for price caps and, if nothing else, increased pressure on FERC to "do more" than what it has already adopted on April 26.  "Doing more" could mean WSCC wide caps, caps on all hours (not just emergencies), or both.

More to come as we know more ...

GAC

 -----Original Message-----
From: 	John.Shelk@enron.com@ENRON [mailto:IMCEANOTES-John+2EShelk+40enron+2Ecom+40ENRON@ENRON.com] 
Sent:	Tuesday, June 05, 2001 4:05 PM
To:	Belden, Tim; acomnes@enron.com
Cc:	Robertson, Linda; Briggs, Tom; Nersesian, Carin; Shortridge, Pat; Novosel, Sarah
Subject:	Status Report On Price Caps

This e-mail summarizes our conversation earlier today about the current,
albeit fluid, situation on price caps and related issues in Washington.
The short answer is: increasing likelihood of legislative action in favor
of some type of price caps or price mitigation, although still unlikely to
be enacted into law; growing pressure from a variety of sources for FERC to
"do more" -- all while we understand that market prices are coming down as
fundamentals change.

In the House, the Energy and Commerce Committee is scheduled to resume
consideration tomorrow of the Barton California emergency bill.  As of this
writing, there is no bipartisan agreement on some pricing limit mechanism
-- which is of course good news since some rather bad ideas had been
floating around.  The mark up will only occur if Republican Members elect
to go forward following a closed meeting tonight.  Democrats will offer the
cost-of-service-based rate amendment offered in subcommittee.  Republicans
may counter with an alternative that would extend the FERC price mitigation
rule to the entire West and for all hours.

In the Senate, the change in control to Democrats is widely read as
increasing the chances of a committee vote or floor vote on price caps --
depending on market and political developments.  However, incoming Sen.
Majority Leader Tom Daschle has said he doubts price caps would be enacted
into law, largely because of Republican opposition.  Incoming Senate Energy
Chairman Bingaman is seen as wanting to lean on FERC to act rather than
have Congress enact a price cap -- although he has cosponsored the
Feinstein-Smith price cap, he wants to give the new FERC commissioners a
chance to act.