We're in the process of developing a strategy to take us through the next few 
months.  But while the (otherwise perishable) thoughts are still fresh in my 
mind from the hearings on Monday and Tuesday, I wanted to throw out some 
observations for discussion in the days/weeks ahead.

OBSERVATION--The pressure to finger somebody for "price gouging" is 
increasing.

The administration is hell bent on finding a "fall guy."  The price spikes 
pose real political risks for Davis and he and his folks need and want an 
easy way out.   His press release following the hearing renewed the call for 
"refunds."  On my panel, Loretta Lynch asked Reliant and Duke to supply her 
with the details of the contracts they cut to sell their power forward to 
marketers.  And Carl Wood's remarks were extreme.
At the Barton hearing, a liberal democrat (Filner) and a conservative 
Republican (Hunter) locked arms in calling for refunds. Bilbray joined the 
"gouging" band wagon.
The utilities repeatedly called on FERC to do a "real" investigation, with 
hearings, testimony, data discovery---the works. 
On the positive side, the FERC commissioners lauded Wolak, his analysis, and 
his remarks on the panel.  Wolak said somewhat emphatically that the nature 
of California's market structure makes it impossible to single out a single 
participant as the culprit.  He also stated that just everyone's just acting 
in their own self-interest, responding to the screwed incentives embedded in 
the structure.

IMPLICATION--It seems prudent for Enron to understand better its risks of 
getting fingered.

In the best case, the clamoring for a "refund" subsides.  In which case, the 
only cost to Enron is the internal cost incurred to understand better the 
risks of getting fingered.
In the medium case, investigations find that Enron (like others) "played by 
the rules," but the rules stunk, and Enron profited at the expense of 
California consumers.