Traders et al:

Recently you've seen and will continue to see news in the press about FERC inquiries into natural gas prices at the California border and the West:

1. On Thursday, 24 May 01, FERC will be holding a technical conference in Washington DC on natural gas transportation infrastructure.  Enron will be making comments at that conference emphasizing that only increased supply or decreased demand will bring prices down.

2. Yesterday, FERC released an inquiry into whether it should re-impose the as-billed cap on short-term (less than 1 year) releases of transportation capacity.  FERC is considering re-imposing the cap in the entire WSCC, not just California.  Enron's view (which it will present in formal comments due in 20 days) is that re-imposing the cap will do nothing to affect the California border price as it is driven by supply-demand fundamentals.  However, you will likely see claims that reimposing the cap will bring rate relief to gas customers, including EG customers.  Attached is a copy of this latest FERC inquiry.

If you have any question, please contact me.

Alan Comnes 




:	FERC Gas Orders Issued 5/22

MEMORANDUM

TO: Regulatory Affairs Committee
       Power Marketers Working Group

FROM: Jim Steffes, Regulatory Affairs Committee Chair
            Bob Reilley, Power Marketers Working Group Chair
            Julie Simon, Vice President of Policy
            Mark Bennett, Senior Manager of Policy
            Erin Perrigo, Manager of Policy

DATE: May 23, 2001

RE: FERC Gas Orders Issued 5/22

Late yesterday FERC issued two gas orders, which are attached. In the San Diego Gas and Electric/LADWP Order the Commission requests comments on whether it should reimpose the maximum rate ceiling on short term capacity release transactions into California.  The second is a more detailed notice of the schedule for tomorrow's staff technical conference on California Natural Gas Transportation Infrastructure.  We will discuss possible EPSA responses to the request for comments on our weekly conference call and the Gas Issues Working Group on June 7th.  If you have any questions, please call Julie Simon at EPSA (202-628-8200 or jsimon@epsa.org).

Attachment

 - pl01-4.00a.doc 
 - rp01-180.00z.doc