FYI.  Just so you know what we're saying in California.

The attached draft answers the California Municipal Utilities Association 
complaint that California markets are not workably competitive and therefore 
FERC should establish cost-based rates.  In its complaint, CMUA argued that 
the market isn't workably competitive because the prices were higher this 
summer than in previous years even in hours where demand was no higher.  
Seabron's paper shows that high prices have resulted from a number of 
unrelated structural and market design factors and increasing attempts at 
regulatory intervention.  He also debunks the assertions that cost-based 
rates will fix the problem in California and will be easily administered by 
FERC.  Our answer is due at FERC tomorrow so please get me your comments ASAP.
---------------------- Forwarded by Mary Hain/HOU/ECT on 10/25/2000 10:19 AM 
---------------------------
   
	Enron Capital & Trade Resources Corp.
	
	From:  "Sabine Schnittger" <Sabine.Schnittger@frontier-economics.com>         
                  10/25/2000 08:23 AM
	

To: "Mary C Hain" <mary.hain@enron.com>
cc:  
Subject: Draft response to CMUA paper



Mary:

Please find attached a first draft of Enron's response to the CMUA, please
let us know your comments.

Seabron can be contacted on his cell-phone (617 513 5904) this morning, but
will be in the office at noon. Alternatively, you could pass on comments to
me.

Are you or is one of our staff able to assist us with a reference to the
claim that hydro water levels were low in California this year?

Best wishes,

Sabine.




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Sabine Schnittger
Managing Consultant
Frontier Economics
Two Brattle Square
Cambridge, MA 02138
Office tel:    (617) 354-0060
Office fax:   (617) 354-0640
Mobile:        (617) 480-5992
Email:   sabine.schnittger@frontier-economics.com
http://www.frontier-economics.com

 - 00-10-26-SA-SS draft.doc