I'm not sure the RECs provide an example of an auction supply process.  In 
the first few years after privatisation, many RECs signed long-term PPAs and 
took equity in Independent Power Producers.   They were allowed to pass the 
associated purchase costs through to consumers.  Apart from that I believe 
their purchasing was via a mix of longer-term and shorter term purchases 
mainly off the major generators.  The RECs individual purchasing decisions 
were at their discretion and I'm not aware of any centralised, public auction 
that has been used in the form anticipated in California.  The only example I 
can think of an "auction" was in the other direction: Nuclear Electric used 
to sell off its power via an auction style route while in public ownership.

I also can't think of any international examples which fit the Californian 
idea, but I'll rack my brains further.

Paul





Peter Styles
01/10/2000 17:31
To: Paul Dawson/Govt. Affairs/LON/ECT@ECT, Paul Hennemeyer/LON/ECT@ECT, 
Alfredo Huertas/LON/ECT@ECT
cc: Nailia Dindarova/LON/ECT@ECT, Bruno Gaillard/EU/Enron@Enron, Steven J 
Kean/NA/Enron@Enron, Mark Schroeder/LON/ECT@ECT 

Subject: RUSH RUSH: Examples of power supply auction processes [that worked]

See note from Steve Kean below. Examples might occur to the three of you, 
even from your NERA days. 

Alfredo: The statutory obligation for ENEL to sell off generating capacity to 
independent third parties is more or less the opposite of the process 
suggested to Governor Davis, but might be worth describing anyway. 

Paul D.: You are a direct recipient of the note. Also worth describing the 
previous longer term contracting practices of the E&W RECs?

Bruno: EFET has suggested to the Paris Bourse that the only way to kick start 
a traded power market in France would be for EdF to auction packages of 
generation output to new entrants; again this is really the opposite of the 
California situation, but may be of interest. Get details from Nailia (in 
London tomorrow.)

In view of tight deadline please e-mail or call Steve  (cc Mark , and let me 
know beforehand)  on Monday by  noon  Houston time (currently only 5 hours 
behind, thus 5pm London time) with any relevant descriptions. I am in London 
all day.

---------------------- Forwarded by Peter Styles/LON/ECT on 01/10/2000 17:15 
---------------------------
From: Steven J Kean@ENRON on 29/09/2000 15:47 CDT
Sent by: Steven J Kean@ENRON
To: Mark Schroeder/LON/ECT@ECT, Tom Briggs/NA/Enron@Enron, Robert 
Hemstock/CAL/ECT@ECT, Peter Styles/LON/ECT@ECT, Daniel 
Allegretti/HOU/EES@EES, Steve Montovano/DUB/EES@EES, Janine 
Migden/DUB/EES@EES, Aleck Dadson/TOR/ECT@ECT, Paul Dawson/Govt. 
Affairs/LON/ECT@ECT
cc:  

Subject: examples of auction processes that worked

Jeff Skilling proposed a solution to Gov Davis to solve the supply and 
pricing problems in the California market.  In summary, the proposal would 
have a neutral party conduct an auction wherein the utilities would seek bids 
for 5-10 year packages of power from suppliers.  The gov asked if anyone had 
successfully conducted such an auction in the industry already.

I need your help to identify and describe any such examples (European or 
North American) by mid day Monday. Jeff and I will have a follow up call with 
the governor on Monday.

Thanks