Ray's take on this is consistent with the EPSA write up on the hearing.   



	Ray Alvarez
	05/07/2001 03:49 PM
		
		 To: "Ronald Carroll" <rcarroll@bracepatt.com>
		 cc: <mmilner@coral-energy.com>, <rreilley@coral-energy.com>, 
<ray.alvarez@ei.enron.com>, <acomnes@enron.com>, <cyoder@enron.com>, 
<dfulton@enron.com>, <jdasovic@enron.com>, <jsteffe@enron.com>, 
<linda.robertson@enron.com>, <rshapiro@enron.com>, <smara@enron.com>, 
<snovose@enron.com>, <steve.c.hall@enron.com>, <gackerman@wptf.org>
		 Subject: Re: Fwd: Murkowski Challenges Capitalists To Cap Runaway Power 
Prices In CA

I attended the Senate hearing, and Murkowski strongly supported FERC's 
decision and was anti- price cap throughout the hearing.  In my opinion, the 
author of this article misinterpreted what was going on at the end of the 
hearing.  Commissioner Massey was trying to offer up a letter supporting 
price caps, to be placed into the record.  My take is that Murkowski didn't 
want the letter and, being totally skeptical of the financeability of 
infrastructure under price caps, challenged Massey to come back with support 
from the financial community for price caps.




"Ronald Carroll" <rcarroll@bracepatt.com> on 05/07/2001 01:16:37 PM
To: <mmilner@coral-energy.com>, <rreilley@coral-energy.com>, 
<ray.alvarez@ei.enron.com>, <acomnes@enron.com>, <cyoder@enron.com>, 
<dfulton@enron.com>, <jdasovic@enron.com>, <jsteffe@enron.com>, 
<linda.robertson@enron.com>, <rshapiro@enron.com>, <smara@enron.com>, 
<snovose@enron.com>, <steve.c.hall@enron.com>, <gackerman@wptf.org>
cc:  

Subject: Fwd: Murkowski Challenges Capitalists To Cap Runaway Power Prices In 
CA


----- Message from "Tracey Bradley" <tbradley@bracepatt.com> on Mon, 07 May 
2001 10:49:32 -0500 -----
To:	"Justin Long" <jlong@bracepatt.com>
cc:	"Aryeh Fishman" <afishman@bracepatt.com>, "Andrea Settanni" 
<asettanni@bracepatt.com>, "Charles Ingebretson" 
<cingebretson@bracepatt.com>, "Charles Shoneman" <cshoneman@bracepatt.com>, 
"Deanna King" <dking@bracepatt.com>, "Dan Watkiss" <dwatkiss@bracepatt.com>, 
"Gene Godley" <ggodley@bracepatt.com>, "Kimberly Curry" 
<kcurry@bracepatt.com>, "Michael Pate" <mpate@bracepatt.com>, "Paul Fox" 
<pfox@bracepatt.com>, "Ronald Carroll" <rcarroll@bracepatt.com>
Subject:	Murkowski Challenges Capitalists To Cap Runaway Power Prices In CA
FYI

Murkowski Challenges Capitalists To Cap Runaway Power Prices In CA

In what some observers believe could be a watershed change in rhetoric, 
Senate energy policy leader Frank Murkowski (R-AK) is berating the capital 
community for not coming forward and detailing what kind of ceiling on 
wholesale power prices it would take to insure adequate generation -- but 
head off continued economic damage to the state of California.

 The criticism signals that the chairman of the Senate Energy and Natural 
Resources Committee has grown impatient with the hail of philosophical 
charges and counter-charges that have followed FERC's April 26 order on the 
California market and is turning elsewhere than FERC for a solution. Sources 
also say it may be a signal that there is a majority on his committee that 
would support some kind of legislative control on the wholesale power market 
in the West.

"I am issuing an admonition to the financial community," Murkowski said at 
the conclusion of a hearing on the recent FERC order. "If the financial 
community will come in and say what terms and conditions they will need to 
bring new generation into the state, we can cut through this chatter."

Among other provisions, the FERC order institutes a plan for price controls 
during Stage 1 and higher power emergencies. Lawmakers at the hearing, 
especially from California and the West, criticized the action as 
insufficient to prevent price gouging.

FERC Chairman Curt Hebert said the limited nature of the price controls will 
continue to provide the power industry with incentives to build power plants 
in California.

Murkowski called on financial interests attending the hearing to settle the 
debate.

"Tells us what you will or will not do under a price cap," said Murkowski. 

Murkowski indicated that the answer to his question should come directly from 
top figures in the financial community. 

Murkowski also signaled that Congress may step in and take legislative action 
on the California crisis. 

"We have to question the adequacy of the order and introduce legislation to 
address problems if necessary," Murkowski said.

The sentiment was echoed by other members of the Committee. 

"We cannot allow our government to sit idly by and allow a tragically flawed 
and easily manipulated power market wreak havoc on our economy," Sen. Maria 
Cantwell told Hebert. "If you're not going to take action, Congress is going 
to act."

All three FERC commissioners testified at the hearing but it was Chairman 
Curt Hebert who was on the receiving end of most of the criticism.

"FERC has done a wonderful imitation of a potted plant," Sen. Byron Dorgan 
(D-ND) told Hebert. "Regulation is not a four letter word. The market system 
sometimes gets out of wack.

Commissioner William Massey also criticized FERC's order, and acted as 
counterpoint to Hebert throughout the hearing. Commissioner Linda Breathitt 
defended her support of the April 26 order.

"One thing is clear, you all don't get along very well," observed Dorgan.

"I'm amazed at what's been done," said Murkowski in defending FERC's action 
over the past several weeks. "It's better than nothing."

"I've been disappointed," replied Dorgan. "I hope FERC decides it's a 
regulatory body and steps up and takes some action."

Sen. Feinstein suggested to Hebert that FERC take a closer look at the impact 
of skyrocketing natural gas prices on the exorbitant increase in electricity 
prices in California.

In response, Hebert announced that FERC was holding a technical conference 
May 24 on current and projected natural gas pipelines into California.

"I agree that this is a natural gas situation and we intend to look into this 
as well," Hebert said.


Source: EnergyWashington.com
Date: May 4, 2001 
, Inside Washington Publishers