----- Forwarded by Jeff Dasovich/NA/Enron on 01/05/2001 04:12 PM -----

	Cynthia Sandherr
	01/05/2001 04:10 PM
		 
		 To: Steven J Kean/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, Linda 
Robertson/NA/Enron@ENRON, Tom Briggs/NA/Enron@Enron, Joe 
Hartsoe/Corp/Enron@ENRON, Sarah Novosel/Corp/Enron@ENRON, Donna 
Fulton/Corp/Enron@ENRON, Susan J Mara/NA/Enron@ENRON, Jeff 
Dasovich/NA/Enron@Enron, Sandra McCubbin/NA/Enron@Enron, Paul 
Kaufman/PDX/ECT@ECT
		 cc: 
		 Subject: Barton Statement on CA Electricity Situation, 01/05/01



> Contact: Samantha Jordan
>                (202) 225-2002
> Date:      Friday, January 5, 2001
>
> Statement RE: Electricity Price Concerns in California
>
>  "Electricity restructuring, in principle, did not cause the problems
> California is experiencing -- it just exposed them more obviously to
> consumers there.  California did not deregulate properly, nor did it
> ensure a sufficient power supply.
>
>  The state framework in place in California created a situation
> allowing for almost zero growth in generation and almost zero growth in
> transmission at a time when the service region's population was growing
> substantially.  The strict process to obtain permits or new licenses
> limits interest in constructing new power plants and transmission lines.
> California's stringent environmental standards, the most rigid in the
> nation, restrict the interest of new providers wishing to enter the
> market.  The California legislation was therefore enacted in an
> environment in which consumers were not encouraged to limit usage, demand
> continued to increase and the power reserves began to deplete.  The
> surrounding states, strapped by their own growth, have been unable to
> provide additional power supplies to California at a reasonable cost.
>
>  Unfortunately, the Clinton Administration and the California
> government had an opportunity as early as last summer to foresee this
> oversight and make changes that would have helped stave off this
> situation, however they chose not to make the fundamental changes
> necessary.  The problems in the state's market were obvious months ago and
> earlier action could have avoided a crisis.  The actions now necessary did
> not need to be this painful.
>
>  Governor Davis should be looking for a practical, California-based
> solution rather than name-calling, threatening and playing politics with
> the pocketbooks of his consumers and stockholders.  It is very important
> to keep independent generators of power interested in selling to
> California -- these crucial participants should not be scared away when
> California needs power the most.
>
>  When the 107th Congress convenes for business, it is my intention to
> hold a series of hearings, focusing not only on the California situation,
> but the overall energy situation in the United States.  I have also
> requested a meeting with Bush officials to discuss these issues, and
> develop a plan of action to deal with them, as soon as the Administration
> is formally in place."
>
>
> -U.S. Representative Joe Barton (R-TX)
>
> As Chairman of the House Commerce Subcommittee on Energy & Power, Barton
> was responsible for the first comprehensive electricity deregulation
> package to pass a House Subcommittee.  He is expected to be re-appointed
> to this chairmanship in the 107th Congress, where he will have House
> jurisdiction over all energy matters.