Alan and Mary  --

Below are my comments and attached documents for the Conference on Market 
Monitoring in California at the FERC.  I will call later to discuss further.  
I suggest filing comments and would propose something along the lines of 
PJM's market monitoring program for Enron's Proposal.  Please forward to 
anyone else you think appropriate.

Comments and documents --

Attached are the four proposals discussed at the conference.  Comments are 
due February 6.  Staff intends to issue its report/recommendations to the 
Commission March 1.  We can comment on the Staff recommendations in March and 
Commission action is anticipated around May 1. 

Conference  --

Scott Miller chaired this informal Staff conference.   The morning was spent 
discussing principles and the afternoon on specific proposals.  This included 
the explanations of the attached plans, as well as a discussion of the PJM 
Market Monitoring Program. 

The conference can be summarized as follows --
 
 screens can be developed to determine if market power exists and is being 
exercised. 

 an appropriate role of the market monitor is to suggest structural reforms.

 Independence is necessary, but undefined.

 due process is necessary for any person under scrutiny.

 the debate on mitigation continues -- if mitigation, by whom and when are 
the hot topics.

 one key is to get the market structure right -- mitigation becomes 
unnecessary.

 California is different -- too much dependence on spot market/limited long 
term contracts; and insufficient demand response.
 
 
The good news is that --

 Staff does not consider the ISO proposal as a starting point, but as a 
vehicle to generate discussions
 (Staff succeeded  -- Duke and Dynegy went to great lengths to critize it).
 
 Staff has an open mind on the appropriate approach to market monitoring and 
are soliciting written proposals  and comparisons to existing programs.

 Staff is not trying to fix the structure of the California market here -- 
ISO should do so under the December 15  order.

 Regional scope and access to information are legitimate questions for 
comment.