---------------------- Forwarded by Carla Hoffman/PDX/ECT on 12/12/2000 12:26 
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	Enron Capital & Trade Resources Corp.
	
	From:  "Pergher, Gunther" <Gunther.Pergher@dowjones.com>                      
     12/12/2000 10:51 AM
	

To: undisclosed-recipients:;
cc:  
Subject: DJ US Southwest Pwr Mkt Rises On Unit Outage, CalPX Chaos


17:13 GMT 12 December 2000 DJ US Southwest Pwr Mkt Rises On Unit Outage,
CalPX Chaos
NEW YORK (Dow Jones)--Prices for prescheduled power in the southwestern U.S.
rose Tuesday due to a unit outage and uncertainty about the market rules of
the California Power Exchange, traders said.
The 498-megawatt San Juan coal-fired unit 4 in New Mexico tripped off the
grid Monday due to a tube leak, but it is expected back on line Tuesday
night.
Traders also said total uncertainty about the market rules in California
have thrown the market into chaos. On Sunday, the California Power Exchange
cleared power sales at prices above $250/MWh because the Federal Energy
Regulatory Commission approved an emergency request from the California
Independent System Operator to move to a new "soft" price cap.
The ISO asked to be able to purchase power for more than $250 a
megawatt-hour, so long as any seller agrees to provide documentation on
costs to justify the high price. In time, the FERC could reduce prices for
any sales above $250/MWh if the FERC deems the price unreasonable, according
to the "soft" cap rules originally proposed by FERC.
The CalPX says that its day-ahead market has also moved to the soft price
cap, but the ISO on Sunday constrained almost all CalPX prices for Monday
down to $250/MWh, from an average of $611.53/MWh. The ISO staff and middle
managers apparently don't believe the new soft-cap applies to the CalPX
market, though late Monday the ISO constrained some prices for Tuesday down
to $250-$500/MWh but left the CalPX clearing prices for nine hours unchanged
at $926.34-$1,020.99/MWh.
Traders said Tuesday that no ISO constrained pricing formula comes up with
even figures as $280/MWh and $500/MWh, and that somebody at the ISO is just
making up prices arbitrarily.
With all the uncertainty about what final prices will be, suppliers avoided
the CalPX market Monday and Tuesday. With fewer sell offers and steady
demand, the CalPX has risen sharply higher than the bilateral market. The
much-higher CalPX clearing prices Monday, in turn, pushed the southwest
bilateral market higher early Tuesday, traders said

               On-Peak/MWh          1 Day Previous
Palo Verde    $  400.00-$  520.00  $  300.00-$  375.00
Mid-Columbia     650.00-   850.00     750.00- 1,000.00
COB              600.00-   800.00     700.00-   900.00

After the bilateral market completed most of its trading, the CalPX posted
Wednesday on-peak clearing prices that averaged $1,406.76/MWh, up $417. How
the ISO may change those prices later Tuesday is unknown. The CalPX made an
emergency filing late Monday with the FERC to include its market in the new
"soft" cap rules.
-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com

(END) Dow Jones Newswires 12-12-00
1713GMT Copyright (c) 2000, Dow Jones & Company Inc


G_nther A. Pergher
Senior Analyst
Dow Jones & Company Inc.
Tel.  609.520.7067
Fax. 609.452.3531

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