This was too choice not to pass on.  Whadda guy.  Happy birthday, by the
way.  You ageing beauty, you.  I do want to catch up on lots of stuff but my
current schedule is extremely hectic.  Do you have schedule constraints?
Coffee some morning good for you?  G.
-----Original Message-----
From: Schmid, Elena <ESchmid@caiso.com>
To: 'gcoe@firstworld.net' <gcoe@firstworld.net>
Date: Friday, March 02, 2001 4:39 PM
Subject: FW: Fessler Fesses Up to What Went Wrong in California


>FYI
>
>> -----Original Message-----
>> From: Alaywan, Ziad
>> Sent: Thursday, March 01, 2001 6:45 PM
>> To: Winter, Terry; Schmid, Elena
>> Subject: FW: Fessler Fesses Up to What Went Wrong in California
>>
>>  fyi
>>
>> -----Original Message-----
>> From: Kasarjian, Vicken
>> Sent: Thursday, March 01, 2001 2:56 PM
>> To: Fluckiger, Kellan; Alaywan, Ziad; Detmers, Jim; Bibb, Tracy;
>> Carlson, Trent; McIntosh, Jim; Riley, Ed; Perez, Armando
>> Subject: Fessler Fesses Up to What Went Wrong in California
>>
>> Breaking a lengthy refusal to comment publicly on the California
>> electricity "Perfect Storm," Dan Fessler (chairman and a member of the
>> California Public Utilities Commission from 1991 to December 1996)
>> described to a recent conference in New York why things have gone so awry
>> in the state and what he thinks might now be done.
>> His explanation of why the crisis arose is fairly conventional: a
shortage
>> of generation capacity; grossly erroneous predictions of the timing and
>> strength of the economic recovery in the state; and a fatal decision to
>> separate the California Power Exchange from the California Independent
>> System Operator. That's a policy to which Fessler (now with the meaty
>> LeBouef, Lamb law firm) believes that the PUC should never have agreed.
>> "Little did I realize," he told the meeting, "that the market design to
>> which the commission and legislature had acceded would turn out to bear a
>> striking resemblance to the battle cruiser, that ill-fated darling of
>> virtually every naval power in the period 1910-1914. At Jutland, it was
>> belatedly discovered that these vessels-imbued with attributes of speed
>> and weaponry that made them so appealing on paper-could not take a punch.
>> Their armor was too thin: a fatal design flaw revealed only when they
were
>> tested in battle."
>> So what do we do now? Fessler suggests "a technique which I advocated in
>> 1996 and which remains available for deployment next week. If
successfully
>> implemented, my suggestion would directly assail the vehicle of high
>> prices by enlisting self-interested opportunistic behavior to make the
>> demand curve elastic for the first time in the power crisis.
>> "I propose that California pay large users to get off the system the
>> moment reserves approach Stage One conditions. Demand bidding would
>> replace interruptible tariffs for the simple reason that [the latter]
have
>> not worked."
>