---------------------- Forwarded by Mary Hain/HOU/ECT on 02/01/2001 10:16 AM 
---------------------------


Cynthia Sandherr@ENRON
01/30/2001 11:21 AM
To: joshua_sheinkman@wyden.senate.gov
cc: gpeters@epsa.org, Allison Navin/Corp/Enron@ENRON, Steven J 
Kean/NA/Enron@Enron (bcc: Mary Hain/HOU/ECT)
Subject: Questions you requested

Joshua:  

I found the Enron staff who have had the conversations with the Oregon PUC so 
believe the attached Q&A meet your request.  If you need additional 
materials, just let me know.



In addition, EPSA sent some questions they would like the Senator to ask of 
any of the EPSA witnesses (Reliant, Calpine, Williams, or Enron) dealing with 
the Impact of the Recent changes in the Management of the California 
Independent System Operator:

Background:  The Cal ISO acts as the "air traffic controller" for the 
interstate electric power grid in California.  The ISO determines who gets 
access to the grid and under what terms and conditions.  It is the ISO that 
helps ensure that access to the grid is truly open and non-discriminatory.  
When the ISO was initially constituted several years ago, a "stakeholder" 
management board was created that represented a wide range of market 
interests---power sellers, generators, consumers, political leaders, etc.  
After the power emergencies began last summer, this board was criticized as 
too splintered and indecisive.  In a response to this perception and in an 
effort to impose greater control over the ISO, the California state 
legislature replaced the stakeholder board with a five-person board that 
serves at the request of the California Governor.

QUESTION:  The Cal ISO has recently seen its management board changed from 
one with broad stakeholder representation to one appointed by the California 
Governor.  Given that California is a critical part of a larger western 
regional power market, how can we ensure that regional power needs are 
reflected in the decisions of the new state appointed Board?

ANSWER:  We really can't.  Most of the time, the Board has a limited role.  
However, the "traffic controller" role becomes crucial when the power crunch 
comes.  Every market participant needs to be worried that, during times of 
real power emergencies, the Cal ISO Board will be too willing to shoot first 
and ask questions later.  Companies with firm transactions involving 
out-of-state entities may find their needs and commercial interests 
sacrificed to prevent local political problems.  Instead of robust, 
competitive regional markets, politicizing transmission decisions practically 
guarantees an increasingly balkanized market.