Geez, don't delete it this time.....thought it might be helpful.  It's
entertaining to see all those who were once behind de-regulation at the
utilities and Commission run for the exits and switch religions.  The
conversions seem to be overwhelming.  At least Enron believes what it
believes despite its reputation as the anti-Christ of the energy
industry.....

>  -----Original Message-----
> From:  Cherry, Brian
> Sent: Tuesday, December 19, 2000 8:21 AM
> To: 'Dasovich, Jeff'
> Subject: FW: SDG&E Price Cap Reqst: Parties' Comments
>
> FYI
>
> I hope this summary is helpful in giving you a sense of the FERC
> proceedings as of now.
>
>
>
>  CPUC: The CPUC strongly supports SDG&E's Emergency Request.  The
> CPUC says "It is critical that the FERC act immediately to address this
> natural gas crisis, before California consumers are subjected to further
> unjust and unreasonable natural gas rates."  (CPUC Intervention, p. 3.)
> The CPUC notes the "snowballing effect [of high gas prices] on electricity
> prices in California," and also asks FERC to take action against the El
> Paso Merchant Energy capacity deal, referring to the CPUC's related
> complaint in FERC Docket No. RP00-241-000.  The CPUC asks FERC to act
> immediately on SDG&E's Emergency Request, before the coming winter heating
> season.
>
>  SoCalGas:  SoCalGas supports SDG&E's Emergency Request.  According
> to SoCalGas, market developments occurring since SDG&E's Request was filed
> last week "document a worsening of the already severe conditions cited by
> SDG&E."  (SoCalGas Intervention, p. 3.)
>
>  Leprino Foods:  Leprino, a large dairy processor (cheese maker)
> located in PG&E's northern California service area, supports SDG&E's
> Emergency Request.  Like the CPUC comments (above), the Leprino
> intervention asks FERC to act soon on the pending CPUC complaint regarding
> the El Paso Merchant Energy transaction.
>
>  Enron:  Enron asks FERC to deny SDG&E's request, claiming that "the
> alleged connection between recent high prices for delivered gas and
> secondary market prices for released capacity is demonstrably false."
> (Enron Intervention, p. 1.)  Enron argues that there has been a low level
> of activity in capacity release markets lately, and that prices for
> releases have been at or below the pipelines' as-billed rates.   (Id. at
> 1-2.)  Enron accuses SDG&E of attempting to "deflect blame that rightfully
> attaches to SDG&E's own supply acquisition strategy."  (Id. at 2.)  Enron
> accuses SDG&E of failing to take advantage of storage opportunities and
> hedging instruments, and says that SDG&E -- as on the electric side -- has
> been guilty of "reckless reliance on the spot market, too little hedging
> through forward contracting, and inadequate development of
> price-responsive demand."  (Id. at 2.)  Enron challenges SDG&E's
> conclusion that markets are not workably competitive.  (Id., pp. 5-6.)
> "Enron submits that the best remedy is to let the markets work."  (Id., p.
> 6.)  Finally, Enron says the remedy SDG&E has proposed won't work in any
> event.  "One of two things will occur if SDG&E prevails.  The commodity
> will go to other markets that place a higher value on gas or the
> California markets will find ways to circumvent the new caps, which is
> easily accomplished."  (Id., p. 6.)  "Price caps simply do not work."
> (Id., p. 7.)  Enron also questions whether FERC has legal authority to
> impose price caps.  (Id., pp. 7-8.)
>
>  Duke Energy Trading:  DETM asks FERC to postpone any action on price
> caps for capacity release, at least until after the current winter heating
> season.  DETM asserts there is a lack of evidentiary support for SDG&E's
> position regarding market disfunction.  According to DETM, "high prices do
> not necessarily equate with market disfunction."  (DETM Intervention, p.
> 5.)  DETM also suggests that if price caps are imposed on the pipelines
> serving California, marketers will simply sell their gas in other markets
> where price caps do not exist, which could lead to gas shortages in
> California.
>
>  Dynegy:  Although expressing some sympathy for SDG&E's position,
> Dynegy opposes the Emergency Request.  According to Dynegy, "Contrary to
> the rhetoric that continues to swirl around these markets, this is not a
> situation where marketers are simply getting rich gouging customers."
> (Dynegy Intervention, p. 3.)  Dynegy contends that "Changing market rules
> again and again has not solved the problem in power [in the Western
> markets], and will not solve the problem with respect to gas."  (Id., p.
> 4.)  "Squeezing balloons does not work."  (Id., p. 5.)  Dynegy encourages
> a slow approach, and asks FERC not to engage in "a rush to judgment" in
> response to SDG&E's Emergency Request.  (Id., p. 6.)
>
>  NYMEX:  Like the marketers whose comments are summarized above,
> NYMEX opposes SDG&E's Emergency Request, and argues that FERC should allow
> the market to work freely.  NYMEX says that "nowhere does SDG&E attempt to
> produce any any empirical or anecdotal evidence of anticompetitive actions
> on the part of any market participant."  (NYMEX Intervention, p. 3.)
> NYMEX urges that, "[b]efore starting down the road of reregulation of the
> natural gas market, the Commission should consider carefully the dangers
> that lay ahead, as evidenced by the California electric experience."
> (Id.)  According to NYMEX, if FERC were to grant SDG&E's Emergency
> Request, it would "drastically and dramatically reverse [FERC's] long
> standing commitment to competition as the determinant of prices for
> natural gas on a commodity basis."  (Id., p. 4.)
>
>  Indicated Producers (Exxon, Texaco, et al.):  Producers oppose
> SDG&E's Emergency Petition.  They protest the filing, arguing that "The
> Commission should resist calls for hasty, politically expedient actions
> 'to do something' about the energy problem in California and instead
> embark on a course to adopt fair and effective solutions to the real
> problems that exist regarding pipeline capacity serving California."
> (Producers Comments, p. 2.)
>
>  Reliant Gas Marketing:  Like the other marketers, Reliant Marketing
> protests SDG&E's Request, and asks FERC to reject it.  According to
> Reliant, "Prevailing natural gas prices in California and for SDG&E at
> this time appear to be a function of market dynamics --- inadequate supply
> for a growing demand."  (Reliant Protest, p. 4.  Reliant cites the "lack
> of infrastructure" to serve California gas demand, and faults the
> California gas utilities for opposing FERC interstate pipeline projects to
> the State.  (Id., p. 5.)  Reliant urges FERC not to "abandon" its decision
> in Order 637 to remove price caps on short-term capacity releases.  (Id.,
> pp. 5-6.)
>
>
>
>  <<cpuc_interven_2110047.pdf>>  <<SoCalGas Intervention.doc>>
>  <<enron_comments_2110112.pdf>>  <<duke_interven_2110191.pdf>>
> <<dynegy_interven_2110188.pdf>>  <<nymex_interven_2110199.pdf>>
> <<reliant_interven_2110232.pdf>>

 - cpuc_interven_2110047.pdf
 - SoCalGas Intervention.doc
 - enron_comments_2110112.pdf
 - duke_interven_2110191.pdf
 - dynegy_interven_2110188.pdf
 - nymex_interven_2110199.pdf
 - reliant_interven_2110232.pdf