Mark's synopsis pretty well says it all.  Once again, the CPUC is in a panic 
and is attempting to change the rules in the middle of the game.  I'm not 
sure I can make as clear a connection as Mark has between the actions of 
interstate pipelines, particularly Transwestern, who, basically, are allowed 
to charge just a tariff rate for upstream transport, and the huge dislocation 
of basis spread between producing area and California border.  Therefore, I 
don't necessarily see us being sullied by the El Paso issue.  I think our 
biggest PR problem is probably our affiliation with Enron Online.

We'll continue to monitor this situation.  One thing is clear... fireworks 
will certainly be forthcoming when the QF's are being paid on a formula 
weighted predominantly with basin pricing, rather than border prices.  Not to 
be be too esoteric here, but remember, there are a number of factors at 
play.  QF's by contract are obligated to produce electricity when called on. 
They are paid capacity payments by the utilities for that purpose.  It will 
be interesting to see how many of the QF's tell Edison, PG&E, SDG&E, et al. 
to go "fly a kite" when they know that if they produce a MW of electricity, 
their commodity payments will put them under water.


---------------------- Forwarded by Jeffery Fawcett/ET&S/Enron on 12/05/2000 
09:11 AM ---------------------------


mbaldwin@igservice.com on 12/04/2000 05:48:56 PM
To: "Jeff Fawcett" <jfawcet@enron.com>, "Susan Scott" <sscott3@enron.com>
cc: "Michael McGowan" <michael.mcgowan@enron.com> 

Subject: FW: R.99-11-022 - ALJ Cooke's Draft Decision, Ruling, All-Party 
Notice - Section 390



Team,  thought you would find this somewhat interesting  
and?explanatory?of?California's  near? term panic . Our  California 
Commission? is predisposed to do almost anything to stem the  tide of higher 
energy prices. Their latest manifestation of complete melt-down  comes in the 
form of attempting to modify electric QF payments by abandoning the  current 
gas index methodology utilized by all three utilities. Essentially, the  
proposed decision would?immediately (effective 12/1) abandon the old  
California border gas indexes in favor of adopting a "proxy gas price".?  
This new proxy gas price would apply to all three utilities, PG&E, SCE and  
SDG&E. On a temporary basis, the gas index used for eventual electric QF  
payments will be an gas index consisting of? ( i ) 10 % of the simple  
average of three border indices at Topock ( Btu Daily, NGI, Natural Gas 
Week)  and? (ii ) 90% of the SoCal Gas Core Wacog published monthly in 
Schedule  G-CS or (in the case of PG&E) 90 % of their core published WACOG .? 
The  resultant reduction in electric QF payments is several hundreds of 
Millions of  dollars just for? December alone.
?
So  what if anything does this mean to TW ?? Clearly, TW's short term desk  
maybe be affected. If Cal border numbers run 14 - 20 dollars and power 
payments  are based upon PG&E Wacog of $7.50 gas demand for electric 
generation  will? moderate. Next, the heat level on the cause of why basin to 
border  price spreads are over $10 is not longer just a Commission vs.. EPNG 
issue. The  entire California QF population becomes a huge stakeholder. The 
never ending  search for a "bad Guy" escalates. TW needs to be careful?from 
becoming  painted with a broad brush. TW is not one of the Southwest bad 
Guys. TW's pipe  is not oversold, is point to point firm, widely held, useful 
to California's  utilities etc.
?
If any  of this is useful and you want to further explore to potential 
ramifications,  please call .? Mark, IGS
?
-----Original Message-----
From: Gwen Soong  [mailto:igsinc@ix.netcom.com] 
Sent: Monday, December 04, 2000 8:23  AM
To: Mark Baldwin
Subject: FW: R.99-11-022 - ALJ Cooke's  Draft Decision, Ruling, All-Party 
Notice - Section 390

?
-----Original Message-----
From: Gallardo, Teresita C.  [mailto:tcg@cpuc.ca.gov] 
Sent: Friday, December 01, 2000 2:58  PM
To: 'jweisgall@aol.com'; 'rcsstl@cdmnet.com'; 'dnorris@sppc.com';  
'mcmannes@aol.com'; 'lgurick@calpx.com'; 'woodrujb@sce.com';  
'gbarnes@sempra.com'; 'bfinkelstein@turn.org'; Ramos, Julio J.;  
'dgrueneich@gralegal.com'; 'ktilton@gralegal.com'; 'alr4@pge.com';  
'bcragg@gmssr.com'; 'eke@aelaw.com'; 'jsqueri@gmssr.com';  
'bloomje@la.whitecase.com'; 'jkarp@whitecase.com'; 'lys@aelaw.com';  
'edoneill@dwt.com'; 'lindseyhowdowning@dwt.com'; 'ssmyers@hooked.net';  
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'blaising@braunlegal.com'; 'abb@eslawfirm.com'; 'etiedemann@kmtg.com';  
'steve_ponder@fpl.com'; 'dbranchcomb@hesinet.com'; Stevens, Maria E.; Quan,  
Edwin; Wilson, Gregory A.; Loewen, James; Cooke, Michelle; Sabino, Pearlie 
Z.;  'jhoffsis@energy.state.ca.us'; 'jmathis@edisonmission.com';  
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'dhmaynor@worldnet.att.net'; 'furutanj@efawest.navfac.navy.mil';  
'mflorio@turn.org'; Scarff, James E.; 'imoosen@gralegal.com';  
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'david@mbvlaw.com'; 'jsqueri@gmssr.com'; 'bloomje@la.whitecase.com';  
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'gtbl@dynegy.com'; 'wbooth@booth-law.com'; 'rbw@mrwassoc.com';  
'difellman@energy-law-group.com'; 'askaff@energy-law-group.com';  
'tomb@crossborderenergy.com'; 'brbarkovich@earthlink.net'; 
'rmccann@cal.net';  'cmkehrein@ems-ca.com'; 'bob@sierracc.com'; 
'lwhouse@el-dorado.ca.us';  'bradylaw@pacbell.net'; 'abb@eslawfirm.com'; 
'abb@eslawfirm.com';  'pstohr@dbsr.com'; 'njohnson@ciwmb.ca.gov'; 
'dbranchcomb@hesinet.com';  'scohn@smud.org'; 'malcantar@aandellp.com'; 
'wgibson@nwppc.org';  'dws@keywaycorp.com'; 'mbrubaker@consultbai.com'; 
'rboyd@enron.com';  'foothill@lmi.net'; 'fosterbc@sce.com'; 'frl3@pge.com'; 
'wbyrne@forenergy.com.';  'jmeith@minasianlaw.com'; Stevens, Maria E.; 
Minkin, Angela K.; Schumacher,  Brian D.; Danforth, Christopher; Lafrenz, 
Donald J.; Ghazzagh, Farzad; Walker,  Glen; Econome, Janet A.; Ajello, Julian 
E.; Halligan, Julie; Tan, Lee-Whei;  Ziering, Mark; Cooke, Michelle; 
Kinosian, Robert; Sarvate, Sarita; Linsey,  Steve; Thompson, Thomas W.; 
Meyer, William;  'kgriffin@energy.state.ca.us'
Cc: Gallardo, Teresita  C.
Subject: R.99-11-022 - ALJ Cooke's Draft Decision, Ruling,  All-Party Notice 
- Section 390

<<CPUC01-#84763-v1-I8907004_R9911022_Cooke_Ruling.DOC>>  
<<CPUC01-#84823-v1-R9911022_Cooke__All-Party_Notice.DOC>>  
<<CPUC01-#84805-v1-R9911022_Cooke_Comment_Dec_.DOC>>  

 - CPUC01-#84763-v1-I8907004_R9911022_Cooke_Ruling.DOC
 - CPUC01-#84823-v1-R9911022_Cooke__All-Party_Notice.DOC
 - CPUC01-#84805-v1-R9911022_Cooke_Comment_Dec_.DOC