Enron President: Summer Power Market Woes To Widen Dereg Gulf 
By James Covert 
Of DOW JONES NEWSWIRES 
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09/06/2000 
Dow Jones Energy Service 



(Copyright (c) 2000, Dow Jones & Company, Inc.) 
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NEW YORK -(Dow Jones)- The disasters that have hit states with deregulated 
retail power markets this summer are likely to widen a regulatory gulf 
between those states and the rest of the country, said Jeffrey Skilling, 
president of Houston-based Enron Corp. (ENE). 
Wholesale power price spikes this summer sent bills for retail customers of 
Sempra Energy (SRE) unit San Diego Gas & Electric Co. soaring to two to three 
times their previous levels, as deregulated market prices were passed on to 
them. In New York, bills for customers of Consolidated Edison Co. (ED) of New 
York jumped by more than 40% under a similar arrangement, although the summer 
was by some accounts the mildest in more than a hundred years. 
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These developments haven't done much for the reputation of electric 
deregulation in states that have thus far sat on the sidelines, Skilling 
said. 
But the states that have already set the ball rolling - including deregulated 
and disaster-ridden California - will probably step up their efforts to 
develop and repair their flawed markets, Skilling told an energy conference 
on Wednesday. 
"If a state hasn't already deregulated, they're going to be more hesitant to 
do so at this point," Skilling said. "But if they've already started, there's 
no going back. They've got to deal with the problem." 
Skilling puts about 40% of the U.S. retail markets in the former category, 
predicting that their skittishness will necessitate federal prodding if those 
markets are to become deregulated in the next few years. 
In the meantime, Skilling said he sees a nunmber of "quick fixes" on the 
regulatory side that could do much to improve wholesale market conditions for 
the other 60% that have started down the rocky road of deregulation. And with 
political pressure mounting, regulators at both the state and federal levels 
are becoming quicker about pushing these through, he said. 
These include the streamlining of power plant siting processes, and the 
elimination of monopolized power transmission systems through the creation of 
independent transmission companies and operators. 
That will improve the access of generators to power-starved markets in 
California and elsewhere, and ultimately help reduce prices, Skilling said. 
"California has added 5,000 or 6,000 megawatts of demand over the past four 
years," Skilling said. "We've got 11,000 megawatts of generation that's been 
proposed, and we're going to need to step up the process for getting that 
cited." 
Another important part of developing young retail markets is to introduce 
customers to real-time pricing, so that they can track the fluctuations of 
the volatile wholesale power market on a real-time basis, and better manage 
their risk, Skilling said. 
"Real-time pricing is essential for the the development of any retail 
market," Skilling said. "That's when we're going to start to see the peak 
(power demand) shaving and customer savings." 

By James Covert, Dow Jones Newswires; 201-938-2061; james.covert@dowjones.com