The Energy and Air Quality Subcommittee meet for almost six hours today and 
approved an amended version of H.R. 1647, Chairman Barton's emergency 
legislation to aid California, by a 17-13 party line vote.  The full Energy 
and Commerce Committee may take it up as early as next week (probably 
Thursday, May 17th).

The Subcommittee DEFEATED an amendment by Rep. Waxman (D-CA) to impose 
wholesale price caps for 18 months.  The amendment was defeated 12-20 with 
all Republicans voting against, including the three from California and Rep. 
Greg Walden (R-OR), who while seen as the last to decide to oppose the price 
cap amendment, was the most forceful and articulate in opposition to the 
amendment.  Also voting "NO" were Democratic Reps. Ralph Hall (D-TX) and 
Chris John (D-TX), with which we had met in recent days.  The final vote 
tracked our whip count going into the meeting.

Rep. Albert Wynn (D-MD) offered and withdrew an amendment to delete the 
"negawatts" provision.  There was bipartisan criticism that while the concept 
made sense, there were potential problems in terms of possible games playing, 
including end users being able to sell power while not actualy reducing their 
normal power levels.  Another member said that electric coops that are 
required to sell at cost could have customers then go out and resell that 
power and make a lot of money.  Several Members said businesses could shut 
down, put workers out of work and become energy marketers and make more 
money.  Chairman Barton made a forceful defense of negawatts.  While the 
amendment to strike was deleted, we will need to respond to these criticisms 
and shore this up before full committee next week.  There will be another 
attempt to delete at full committee unless these concerns are addressed in an 
amended version.

Ranking Democrat Rick Boucher (D-VA) offered and withdrew an amendment to 
reinstate FERC maximum prices for the secondary transmission market, thus 
reversing the Feb. 2000 FERC order.  This woudl last for 18 months.  
Chairman  Barton said he agreed with Boucher that there is a problem with 
what appear to be high gas transmission rates to California, but he disagrees 
with the proposed remedy.  He pledged to work with Boucher before Full 
Committee mark-up. We are obtaining a copy of this amendment and should 
analyze it ASAP for its potential impact on Enron operations.

Rep. Ed Markey (D-MA) offered and withdrew an amendment to impose a series of 
new tests to be administered by FERC all with the goal of discouraging spot 
market transactions, or at least what he would define as excessive use of the 
spot market, and at the same time encourage "deep bilateral mechanisms."  The 
mechanisms included a "market balance test" that would say only sellers with 
a commitment to the long term market could sell in the spot market at 
unregulated rates and "spot market circuit breakers" that would be triggered 
when reserves are low in a given market.  Chairman Barton said he likes the 
concept of a spot market circuit breaker, but felt that the amendment was too 
complicated to be evaluated today.  We will also pursue an analysis of this 
amendment since it will likely be offered again in some form.

Mr. Markey also offered and withdrew a "net metering" proposal that would 
establish federal interconnection standards for individual consumers who 
would want to use fuel cells and other renewable technology to put power onto 
the system.  It was interesting that those who opposed negawatts spoke 
favorably of net metering even though they are complementary.

The subcommittee by voice vote adopted a Walden Amendment to strike the 
section of the bill that would have required an RTO if 10 of the western 
governors approved it.  The debate was pro-RTO but the rationale for deleting 
the provision is that one is already being formed and Members from those 
states did not want to upset the work already under way.

A series of other amendments on other matters were offered and withdrawn, 
none of which relate to our activities.