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Date: Fri, 20 Apr 2001 08:04:34 -0500
From: "Tracey Bradley" <tbradley@bracepatt.com>
To: "Justin Long" <jlong@bracepatt.com>, "Paul Fox" <pfox@bracepatt.com>
Cc: "Ronald Carroll" <rcarroll@bracepatt.com>
Subject: EPSA Press Release re Comments on New CA ISO Board and MSP
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Thursday April 19, 4:26 pm Eastern Time

Press Release

Electric Power Supply Association Tells FERC That New California ISO Board 
and Its Flawed Market Plan Must Go

WASHINGTON--(BUSINESS WIRE)--April 19, 2001--The Electric Power Supply 
Association (EPSA) told federal regulators today that a lack of political and 
market independence in the governance of the California Independent System 
Operator (CAISO) is the first of several fatal flaws in the grid operator's 
proposed market stabilization plan.

``EPSA believes that the time has come for the commission to enforce its Dec. 
15 order mandating a truly independent CAISO,'' the association said in a 
filing with the Federal Energy Regulatory Commission (FERC). ``The first step 
in such enforcement is to replace the incumbent CAISO board with an 
independent board.''

According to the comments, the CAISO continues to be transformed from an 
``independent operator'' of interstate transmission resources to a partisan 
advocate for the state, now the dominant marketplace buyer through its 
Department of Water Resources (DWR).

``Because of the conflicts inherent in the politicization of the CAISO, there 
exists a more urgent need for the commission to remedy the situation than was 
the case in November 2000,'' said EPSA, citing the lack of an independent ISO 
board as the source of a series of other fatal flaws in the market plan.

``Rather than presenting a well thought out, comprehensive 
market-stabilization plan, developed with meaningful stakeholder input, the 
CAISO has proposed a half-baked radical restructuring of the California 
market, recycling calls for counterproductive price controls and suggesting 
the implementation of bits and pieces of eastern ISO markets.''

Because of the regional nature of the wholesale power markets in the West, 
the association also said it is vitally important that FERC ensure that all 
market participants are treated fairly and comparably.

``The consequences of the political power being exercised over the CAISO are 
palpable. The CAISO has taken positions before the commission, unrelated to 
the reliability of the transmission system, which were unashamedly intended 
to favor the interests of the State of California and DWR over other market 
participants in negotiations for the sale of energy.''

``While it may be politically expedient to blame high prices on 'market 
power,' market stabilization and repair must focus on the critical issues of 
poorly designed markets, inadequate generation resources and deficient 
infrastructure,'' according to EPSA's filing. ``A continued witch hunt for 
evidence of market power, together with continuing credit problems, now pose 
the greatest obstacle to the promise and potential of robust competitive 
markets and the enhanced reliability they will provide.''

``Equally important, establishment of an independent CAISO is vital to the 
long-term resolution of California's energy problems and the stability of the 
entire western region,'' EPSA said.

EPSA is the national trade association representing competitive power 
suppliers, including independent power producers, merchant generators and 
power marketers. EPSA members provide reliable, competitively priced 
electricity from environmentally responsible facilities in U.S. and global 
power markets. EPSA seeks to bring the benefits of competition to all power 
customers.
N
ote to Editors: A complete copy of EPSA's filing will soon be available on 
the EPSA Web site at www.epsa.org, or by contacting Simone Byrd at 
202/628-8200, sbyrd@epsa.org.


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Contact:

Electric Power Supply Association, Washington
Mark Stultz, 202/628-8200