I have not yet seen this pleading, but it points out the need for us to file 
our White Paper ASAP, today or tomorrow at the latest.  If time permits, it 
may be helpful to briefly massage what has already been drafted for the White 
Paper to specifically respond to the core economic point(s) made in the 
SCE/PG&E/ISO/PX/TURN joint filing.

Finally, I strongly recommend that EPMI issue a press release and do as much 
as possible to publicize our filing concurrent with when we make it, 
emphasizing that the problems in California are caused by California's market 
structure, that the only solution is to fix that structure, and that price 
caps will only exacerbate the existing problem.  It would also be helpful if 
some of our erstwhile generator/marketer compatriots would file in support of 
the White Paper.  We need to neutralize the PR campaign that the UDCs and 
California officials have been waging on behalf of their view related to the 
need for lower and lower price caps.  Sue/Mary/Jeff: Can you arrange to have 
EPMI's PR apparatus in gear, and lobby with WPTF members etc. for support?

Nancy:  Please get me a copy of the filing and fax a copy to Mary, Sue/Carl, 
Jeff and Seabron ASAP.  (Jeff: Is your fax number the same as Sue's?)  Thanks.
Content-Transfer-Encoding: quoted-printable
Date: Tue, 17 Oct 2000 07:32:42 -0500
From: "Tracey Bradley" <tbradley@bracepatt.com>
To: "Deanna King" <dking@bracepatt.com>, "Paul Fox" <pfox@bracepatt.com>, 
"Ronald Carroll" <rcarroll@bracepatt.com>
Subject: Another California Utility Filing at FERC, Oct. 16, 2000
Mime-Version: 1.0
Content-Type: text/plain; charset=US-ASCII
Content-Disposition: inline

Monday October 16, 6:01 pm Eastern Time

Press Release

SOURCE: Southern California Edison

SCE Files Joint Petition Urging Federal Regulators to Act Swiftly in Response 
To Unjust and Unreasonable Rates

WASHINGTON, Oct. 16 /PRNewswire/ -- Southern California Edison (SCE) today 
filed a joint petition urging the Federal Energy Regulatory Commission (FERC) 
to take immediate action in response to unjust and unreasonable wholesale 
electricity prices by authorizing a $100/MWh cap in the markets run by the 
California Independent System Operator (Cal-ISO) and the California Power 
Exchange (PX). Pacific Gas and Electric Co. (PG&E) and The Utility Reform 
Network (TURN) joined SCE in filing the petition.

In addition to immediate relief, the filing asked for an expedited proceeding 
to provide the fact finding needed (a) to adopt comprehensive market-power 
mitigation measures that would replace the $100/MWh cap and (b) to determine 
refund responsibility.

``Even though the peak demands of the summer are behind us, electricity 
prices in the wholesale market remain unreasonably high,'' said SCE Senior 
Vice President for Regulatory Policy & Affairs John Fielder. For example, on 
Sunday, September 24, prices reached $150/MWh even though demand was 
relatively low (about two-thirds that seen during a peak summer day).

``Each day that passes, the consumers, utilities and economy of California 
are unfairly burdened with excessive electricity costs,'' Fielder said. ``We 
reiterate Governor Gray Davis' request that FERC act without delay to address 
the problems in the wholesale market.''

Specifically, SCE, PG&E and TURN asked FERC to make an immediate finding that 
California's electricity market is not workably competitive and that 
resulting prices are unjust and unreasonable.

``Numerous studies from independent analysts have provided ample 
documentation of the many problems that plague the California market,'' 
Fielder said. For example, in a report dated Sept. 6, 2000, Cal-ISO's Market 
Surveillance Committee found that prices in June of this year were nearly 
three times the level that would be experienced in a properly functioning 
competitive market.

SCE and the other petitioners asked FERC to provide immediate relief from 
these unjust and unreasonable rates by authorizing a $100/MWh cap in the 
day-ahead, hour-ahead, day-of and real-time markets run by Cal-ISO and PX (a 
$250/MWh cap currently is in effect only in the Cal-ISO markets). In the 
past, FERC has used a $100/MWh rate as a standard in cases where neither 
cost-based nor market-based rates apply, such as emergency service. The 
filing demonstrated that this price level was sufficient to cover costs for 
most plants, but also allowed generators and energy traders to seek a higher 
rate from FERC. This higher price would be paid only to the individual seller 
on a unit-specific basis; it would not set the market clearing price.

In addition to this immediate emergency relief, the filing also asked FERC 
for an expedited hearing on intermediate steps that can be taken until 
long-term changes to the California electricity market can be implemented.

The petitioners asked FERC to require sellers of electricity (other than 
``must-take'' units) to submit cost-of-service information to the Commission 
within 30 days.

The filing noted that FERC could use this information to replace the $100/MWh 
cap with market-power mitigation measures tailored to address the precise 
problems identified in the hearing process. These measures could include the 
temporary imposition of cost-of-service pricing; contracts through which 
generators would commit a percentage of their capacity to the ISO at 
cost-based rates; unit-specific bid caps; or market-wide caps that vary based 
on the operating cost of the unit expected to be on the margin at different 
load levels.

While the market-power mitigation measures will ensure just and reasonable 
rates in the future, the filing also asked FERC to investigate past pricing 
and determine whether refunds from electricity sellers are appropriate.


An Edison International company, Southern California Edison is one of the 
nation's largest electric utilities, serving more than 11 million people in a 
50,000-square-mile area within central, coastal and Southern California.

SOURCE: Southern California Edison