The FERC order appears to be putting a significant crimp on the  real time 
(R/T) desk of Enron and other marketers whenever market prices are at or near 
the cap.  The initial west wide cap is approx $108 an we hit that today in 
R/T. Briefly:

Marketers cannot sell above the cap.  So when prices reach the cap, 
generators are on their own to find buyers. (Generators can sell above the 
cap; if the generator is thermal they simply make a end-of-month cost 
filing.)  Marketers which provide an important function of making the market 
and providing transmission are simply shut out.

Even if a marketer makes a deal below the cap, the deal could be cut due to 
transmission problems.  Should the cost of replacement power exceed the cap 
(which can easily happen), the marketer may be left holding the bag because, 
again, the marketer cannot sell above the cap. 

When CAISO declares an emergency, the cap will change hourly.  R/T deals are 
usually done several hours out.   A marketer will essentially have no idea 
what the relevant cap will be when it is making its deal.

Cash markets can also face all these same problems.  However, the cash desks 
may be able to sell more than 24 hours out. 

Because these impacts are disproportionate on marketers, we should consider 
an appeal of this order separate from EPSA.

Alan Comnes