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	"Steven Kelly" <steven@iepa.com>
	10/20/2000 10:34 AM
	Please respond to "Steven Kelly"
		 
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		 cc: "Jan Smutny-Jones" <smutny@iepa.com>, "Katie Kaplan" <kaplan@iepa.com>
		 Subject: Fw: FERC & California markets

FYI>
 
----- Original Message ----- 
From: andy brown 
To: smutny@iepa.com ; steven@iepa.com ; kaplan@iepa.com ; dkk ; runwithmee ; 
Andy Brown ; Eric Janssen ; cte ; Gregory Maxim ; lmh@eslawfirm.com ; 
jdh@eslawfirm.com 
Sent: Friday, October 20, 2000 7:53 AM
Subject: FERC & California markets

Article noting that FERC will have special meeting on Nov 1 re California 
markets, also Article that Terry Winter is having a press conference today 
(Friday) about how the market will be fixed: 
FERC To Meet Nov 9 To Propose Remedies To Calif 
                    Pwr Mkt 
                    Friday, October 20, 2000 08:17 AM 
  
                    LOS ANGELES (Dow Jones)--In an unusual move, the Federal 
Energy Regulatory                     Commission said Thursday it will meet 
Nov. 1 to discuss remedies to California's                     troubled 
wholesale power market. 
                    Details of a probe into California's wholesale 
electricity market will also be released at                     the Nov. 1 
meeting. As reported, state and federal regulators launched the probe over    
                 the summer, saying the market wasn't workably competitive. 
                    FERC also said it expects to hold a public hearing Nov. 9 
to discuss possible                     solutions to California's power 
crisis. 
                    The place and time of both meetings haven't been decided 
yet. 
                    Regarding Thursday's announcement, FERC Commissioner Curt 
Hebert said "rather                     than waiting for Nov. 1 to release 
the findings of our staff's investigation, I urge the                     
chairman to release the completed report now...it can only help heal the raw 
emotions                     rampant in the state of California." 
                    FERC said it was rare that it would announce details of 
its procedures. The                     commission said its own rules don't 
allow it to normally announce its procedures. 
                    "Because of the need for expeditious action to address 
the serious issues affecting                     California electric power 
markets and California consumers...the commission is taking                   
  the unusual step of announcing in advance the procedures it expects to 
follow over the                     coming weeks to move forward in these 
proceedings," the FERC order said. 
                    The commission said it will give a three-week deadline 
for parties to intervene and to                     comment on the possible 
solutions presented by the commission. 
                    FERC said it anticipates issuing an order by the end of 
the year "adopting and                     directing remedies to promptly 
address to the extent possible the identified problems                     
adversely affecting competitive power markets in California." 
                    If necessary, FERC said it would hold additional meetings 
to develop solutions "to                     other identified problems." 
                    California's wholesale power prices soared this past 
summer. Customers of San                     Diego Gas & Electric Co., a unit 
of Sempra Energy Corp. (SRE, news, msgs), paid                     
market-based rates for power, which resulted in triple-digit utility bills 
for its customers.                     The state's three investor-owned 
utilities also racked up billions of dollars in debt due                     
to high wholesale costs. 
                    SDG&E customers are currently paying a fixed rate for 
their power, while customers of                     the state's other two 
utilities are still bound by a rate-freeze. 
                    Generators have been accused of gouging customers and 
manipulating the market,                     although no evidence has been 
offered up yet. However, the FERC investigation may                     
address that. 
                    -By Jason Leopold, Dow Jones Newswires; 323-658-3874; 
                    jason.leopold@dowjones.com 
Cal-ISO CEO To Announce Remedy To Lower Power 
                    Cost 
                    Friday, October 20, 2000 08:16 AM 
                    (This article was originally published Thursday) 
                    LOS ANGELES (Dow Jones)--California Independent System 
Operator Chairman and                     Chief Executive Terry Winter will 
hold a news conference Friday morning to announce                     a 
possible solution to reduce the state's electricity costs. 
                    An ISO spokesman wouldn't comment on the details of the 
news conference. 
                    According to a news release, Winter will speak about 
"potential vehicles for containing                     costs, while 
maintaining the ISO's high standards of reliability." 
                    The ISO controls about 75% of California's power grid and 
real-time market. As                     already reported, the grid operator 
has come under fire this summer for failing to                     
immediately reduce a price cap in its real-time market. 
                    Currently, state Sen. Steve Peace, D-Chula Vista, is 
drafting legislation to merge the                     ISO and the state's 
Power Exchange. 
                    -By Jason Leopold, Dow Jones Newswires; 323-658-3874; 
                    jason.leopold@dowjones.com 
                    Quote for referenced ticker symbols: EIX, PCG, SRE 
                    , 2000 Dow Jones & Company, Inc. All Rights Reserved.