Jeff -- 

Can you try and call Seabron today to discuss.  See if his understanding 
helps with California issues.

Jim


----- Forwarded by James D Steffes/NA/Enron on 10/02/2000 02:49 PM -----

	"Seabron Adamson" <seabron.adamson@frontier-economics.com>
	10/02/2000 09:43 AM
		 
		 To: <James.D.Steffes@enron.com>
		 cc: 
		 Subject: RE: Auction of Default Supplier Obligation



Jim:


>Have you ever seen a model for a bid process like this?  Any auctions (in
>any commodity) that would work?  We are trying to get back to key policy
>makers mid-day on Monday.


Yes, there are numerous default service auction models in operation or
proposed, both in electricity and other utilities. The government of New
South Wales in Australia is implementing a model similar to this. In
Georgia, I think they recently had an auction to serve customers served by a
gas retailer that went bust. Similar mechanisms have been used for years in
the telecoms business for serving specific client bases, such as rural
customers. Examples have been in Chile, and even in the U.S. (auctions for
"universal service obligations").

We proposed a model for "third-party" default service standard supply for
Ontario (working for Aleck Dadson of Enron Canada). This allowed the
standard supply provider to meet its obligation by competitive means,
including holding an auction. The idea was to provide customers hedging in a
framework that allowed for competition in default service.

Let me know if you want a briefing or futher info. I'll be in the office
until 4:00 or so (I'm then heading to the airport for Portland). My office
number is (617) 354-0060, or (617) 513-5904 (mobile).


Seab


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