Leslie:  Looks good.  Just a couple of comments:

1. General
May want to point out that the roots of California's current gas woes are the 
same ones causing the electric problem---combined effect of California's 
"import-based" energy policy and the state's failure to invest in in-state 
infrastructure.  California imports about 25% of its electricity, but about 
80-90 percent of its gas supply.  California has failed to invest in the 
in-state infrastructure necessary to support increased gas demand over the 
last decade.  So we've got an interstate pipeline superhighway to the border 
and a dirt road of in-state transportation once you get into California.
The last bullet seems to suggest that manipulation may be taking place.  Can 
we support that suggestion, and is it one that we want to make necessarily?  
If we do suggest that manipulation may in part explain current prices, do we 
need to propose ways to eliminate it?  Otherwise, seems that we may be giving 
FERC ammunition to take action without trying to "steer" that action in the 
right direction.  Maybe I'm reading too much into the bullet.

2. Specific
Competition for gas coming to California has increased significantly.  The 
midwest (via Alliance) is competing away Canadian gas.  The Southwest 
(Nevada, Arizona) is competing away supply from the Southwest before it hits 
the California border.

	Mary Hain@ECT
	12/12/2000 11:58 AM
		 
		 To: Jeff Dasovich/NA/Enron@Enron
		 cc: 
		 Subject: Draft Talking points about California Gas market


---------------------- Forwarded by Mary Hain/HOU/ECT on 12/12/2000 10:07 AM 
---------------------------
To: Janet R Dietrich/HOU/ECT@ECT, Jeffrey T Hodge/HOU/ECT@ECT, Mary 
Hain/HOU/ECT@ECT, James D Steffes/NA/Enron@Enron, Richard 
Shapiro/NA/Enron@Enron, Steven J Kean/NA/Enron@Enron, Maureen 
McVicker/NA/Enron@Enron
cc:  
Subject: Draft Talking points about California Gas market

We thought it would be good to basically give Chair Hoecker talking points 
with any numbers that Enron provides.  We will visit on these later today 
when the numbers are ready (before 3:00).  Comments?
---------------------- Forwarded by Christi L Nicolay/HOU/ECT on 12/12/2000 
10:38 AM ---------------------------
From: Leslie Lawner@ENRON on 12/12/2000 11:56 AM
To: Christi L Nicolay/HOU/ECT@ECT, Joe Hartsoe/Corp/Enron@ENRON, Rebecca W 
Cantrell/HOU/ECT@ECT, Ruth Concannon/HOU/ECT@ECT, Stephanie 
Miller/Corp/Enron@ENRON, Phillip K Allen/HOU/ECT@ECT, Jane M 
Tholt/HOU/ECT@ECT, Richard Shapiro/NA/Enron@Enron
cc:  

Subject: Talking points about California Gas market

Here is my stab at the talking points  to be sent in to FERC along with the 
gas pricing info they requested for the California markets.  Let me or 
Christi know if you have any disagreements, additions, whatever.  I am 
supposed to be out of here at 2:15 today, so if you have stuff to add after 
that, get it to Christi.  Thanks.