The Friday Burrito 

" To succeed in politics, it is often necessary to rise above your 
principles" 

This is the last Burrito for the Year 2000.? I, like you, need some time off, 
although I doubt that will happen.? Just take a quick look at the events of 
the last three weeks.? Can you believe what we have been through?? From FERC 
Orders, to emergency filings, to on-again, suspended, and then on-again rate 
stabilization filings, data subpoenas, credit crunch, and don't forget some 
wickedly high price spikes. 

I have been unhappy with the public image our industry portrays.? I feel 
there needs to be a stronger, more effective group public relations media 
blitz that has yet to materialize.? I asked one journalist with whom I have 
had several interviews, "When you write a column, who is your audience?"? She 
said she writes as if she was explaining the matter to her mother.? It's an 
old journalist's trick. 

Amazed at the answer, I decided to call my mother, and ask her what she 
thought about the whole electric situation.? After all, she qualifies as a 
typical fixed-income California resident living in a retirement community in 
Laguna Hills.? "Mom," I asked, "what do you make of the whole situation?"? 
"Oh, I am disgusted," she chirped, "with that Supreme Court ruling.? That's 
no democracy."? "No, not that situation, Mom," I said to calm her down, "but 
the electricity restructuring thing." "Well," she sighed, "everyone is 
worried about their electric bills.? How much are they going up? And, why 
haven't you called me more often?? I could have died, and my children would 
be the last to know?"? Every tag line has a message. 

So there it is.? If you want a simple view that people understand, then there 
it is.? People are worried about their electric bill.? The reasons for the 
increase are of less concern, than how much their bills may go up.? All the 
blather about forward contracts, alleged gouging, Stage 3 emergencies, 
governance, jurisdiction, and FERC Orders is not on the minds of ordinary 
California citizens.? They want to know how much more they are going to have 
to pay.? And they are worried. 

Focus, then, on how we, as an industry, will help.? We want to hold down 
consumer electric bills in three different ways: by adding new generation, by 
giving people more choice as to their energy provider, and by assuring there 
is always a provider of last resort to keep the lights on.? From these three 
simple principles, all else flows.? Give me some feedback, and let's see if 
we can simply the message even more.? Less is more. 

This week's holiday grab bag should be big enough to feed any appetite. 

Things in the People's Republic of California 
?@@@ Fellow Travelers on the Peace Train 
?@@@ SCE's Bryson Rattles the Restructuring Cage 
?@@@ Rate Relief Reviewed, Again 

Things FERC and Federal 
?@@@ Secretary Richardson Serves Smashed Salmon Pate 
?@@@ WPTF Supports PX Emergency Filing 

Mailbag 

Odds and Ends (_!_) 
?@@@ WPTF General Meeting Set for February 8 and 9 in Scottsdale, Az. 
?@@@ Have a Smile 
?@@@ The Toughest Interview Ever 
==================================== 
Things in the People's Republic of California 
?@@@ Fellow Travelers on the Peace Train 

I want you folks throughout the Western Region to know that you have a 
protector. Someone is watching out for your interests, and concerns.? His 
name, amigos, is Senator Steve Peace.? Our Herr Peace wrote to FERC 
Commissioner Hoecker on December 11 a letter that is suitable for plastic 
covered place mats at your dining table,? You can guess why.? He heard about 
the $5,000/MWH prices quoted for Mid-C on Monday.? He wrote: 
? "Today, the LA Time reported that Kaiser Aluminum Corp., the second-largest 
US aluminum maker, said it will shut its smelter in Mead, Wash., for about 10 
months and lay off about 400 employees.? Kaiser said it had resold the 
electricity it was to received this month from the BPA, netting proceeds of 
$52 million, or nearly nine times the $5.9 million that the company has 
earned so far this year."


I read this passage to the WPTF Board at our meeting in Phoenix.? Kent 
Wheatland said, "That's the finest example of demand response I have ever 
heard."? Indeed, Kent hit the nail on the head.? Why is the Peace-meister 
decrying the very thing that we have been begging for?? The so-called 
inelastic demand curve for electricity just got less steep.? But, never mind 
that, read the next paragraph of Peace's letter. 
? "It is clear that neither the prospect of post-October refunds ordered 
under Section 206 ( will be adequate to discipline marketers' behavior.? 
Marketers know full well that FERC simply doesn't have the resources to 
police this wholesale market and that the odds are that they can act with 
impunity.? Moreover, they know they have a fellow traveler in your colleague 
Commissioner Hebert who sees the prospect of the lights going out in 
California as a "vindication" of his positions on price caps rather than as 
the public disaster such an event would be."Fellow traveler!?!? I didn't know 
they let commies on the FERC.? All aboard on the Peace train.? I explained to 
the WPTF Board that every passenger on the Peace Train would receive a 
complimentary fellow-traveler luggage set with matching red-herring leather.? 
In the luggage will be free gifts, essential for any fellow traveler such as 
a "price cap" with earflaps, nose guard, and blinders to cover the eyes.? The 
hear no evil, smell no evil, see no evil price cap is excellent for 
California regulators who repeatedly request these odious price caps as the 
blunt instrument of choice.? Caps come in a choice of hard metal, or soft 
wool. 

Another item in the fellow traveler goodie bag will be Peace's latest best 
selling book, "How to win friends and influence policy makers," Devil Press, 
348 pgs.? Along with the book and the cap, fellow travelers will find trading 
beads suitable for exchange with natives of the Pacific Northwest. Give these 
beads to power marketers as wampum for power imports into California.? What 
fun, and they won't know the difference.? The full faith and credit of the 
ISO control room college-bowl football pool back bead trading values.? This 
year's pot is at an all-time high of $36. 

Finally, the other freebee items in the travel kit include a signed copy of 
Adam Smith's Communist Manifesto, a water-proof electric razor (I'm 
especially keen for that), and the AB1890 Restructuring Map showing by color 
code the jurisdictional boundaries of the different regulatory agencies.? 
Yellow is reserved for the State of California, and it covers the entire 
lower 48, the Province of British Columbia, and Cleveland, Ohio. 

Things in the People's Republic of California 
?@@@ SCE's Bryson Rattles the Restructuring Cage 

Not to be outdone by Herr Peace, SCE (Sufferin' Chutzpah Edison) issued a 
press release by its CEO, John Bryson, calling for dramatic reform of the 
California electricity market.? I know this will shock you, but, now that SCE 
has recovered most, but not all, of its stranded costs, they want to reverse 
the engine of progress, and "re-regulate California's electric system."? 
Guess how?? By allowing utilities to "once again be charged with the 
responsibility to plan for, acquire and assure sufficient power to meet the 
state's needs without the threat of interruption."? By charging cost-based 
rates.? By protecting customers.? Hallelujah. 

Let's talk about a few things, here.? First, let's discuss the credit issue 
that is plaguing the Pacific Northwest power producers who are increasingly 
unwilling to sell supplemental energy into California.? The last I checked, 
most PNW producers paid their counterparties on a 30-day basis, but receive 
the cash from ISO about 100 days after the trade day.? The PNW producers must 
cover their "owed" position by borrowing funds, and at the prices posted in 
the last two weeks, the credit limit has been reached.? Where is the security 
for the payment?? It lies not with the ISO, but with the utilities who are 
the major customers.? Therefore, if the utilities undercollect because frozen 
rates are below wholesale prices, then the utilities accumulate a debt.? If 
the debt continues unabated, then the credit rating companies downgrade the 
UDC ratings.? That has occurred several times in the last few months.? If the 
utilities claim bankruptcy, or refuse to pay the PX, then the PX can't pay 
the ISO, the ISO can't pay the sellers, and the PNW sellers are kaput. 

This is my long-winded way of saying that two entities still hold all the 
cards, at least for now, in the region: SCE, and me-too PG&E.? They have the 
leverage to bring the whole system to its knees.? Hark, recall that WPTF has 
continually called for a breakup of the UDCs' default customer base for this 
very reason.? We argued that two dominant buyers could extract monopsony 
rents from sellers.? And here it is, big time. 

What does Bryson have to lose by rattling the cage?? Nothing.? In fact, it is 
so delicious to watch, for the umpteenth time, SCE exercise brute force when 
they have an advantage.? You must respect that.? The golden rule aptly 
applies.? Those who have the gold, make the rules. 

Another aspect of Bryson's gambit is that he is playing a trump card on his 
buddy, the Governor, who as of last week, through the PUC, suspended the 
requests of Edison and PG&E for rate increases starting next January.? Davis 
has painted himself into a corner, and is no match for the cunning of the 
Sufferin' Chutzpah gang.? I predicted that Davis would stumble and fall on 
electricity matters.? I didn't expect it to happen so soon. 

Do you think the public will buy Bryson's argument?? To tell you the truth, 
I'm not sure. 

Things in the People's Republic of California 
?@@@ Rate Relief Reviewed, Again 

Well, in a complete reversal, the CPUC put back on the docket list the rate 
stabilization plans for PG&E and Edison.? Last week, President Lynch 
suspended both companies' applications, denying them the right to raise rates 
subject to refund.? Now, this week, Lynch allowed for the rate stabilization 
applications to be re-opened, and duly considered. 

Next Tuesday I will be on the local San Francisco station, KQED (88.5 FM) to 
debate the merits of electric competition with the likes of Lynch, and TURN's 
Netie Hogue.? I did this last September on the same one-hour call-in show 
that begins at 9 a.m..? I didn't know it was a call-in show until the callers 
started firing crazy questions at the panelists.? If you are in the area, 
then listen in, and better yet, call in.? Ask Ms. Lynch a few questions, will 
you? 

I listened to a taped interview Ms. Lynch did on another local station, KCBS 
that aired last Sunday.? Here are some of her more memorable quotes: 
? "There is plenty of power in California.? There is no shortage.? It is just 
not being managed properly on a day to day basis. There are power plants that 
should be available right now, but are not running." 

"The State of California has 41,000 MW of power available at any hour." 

"Plant unavailability is an artificial issue.? There is plenty [of power] if 
they [power plants] run." 

"The PUC is trying to figure out what is wrong.? The plant owners only give 
the ISO one-word explanations such as 'boiler', or 'fire'.? We are sending 
our inspection team in to better understand the problems." 

"I won't speculate [as to price manipulation] but last summer we saw very 
suspicious bids and offers." 

"More power plants have been approved during the first two years of the Davis 
administration than in all the years of the Wilson administration." 

"This week the State stepped in to save the system by turning off lights and 
computers." 

"The ISO is governed by a board made up of individuals from the utilities and 
the power sellers.? There is one consumer representative, and one 
environmental representative." 

"The San Diego economy couldn't stand the price volatility of last summer." 

"The [former Governor Pete] Wilson administration created the wholesale power 
market." 

"The market design of the PX is counterintuitive.? It takes the highest price 
bid and pays it to everyone.? So if you offer $50/MWH for a 100 MW, and 
another person offers $100 for a 100 MW, then both parties get $100."


Things FERC and Federal 
?@@@ Secretary Richardson Serves Smashed Salmon Pate 

Mr. Richardson is the U.S. Secretary of Energy.? Most people don't know him, 
nor have ever heard of him.? Last Wednesday, with only four weeks left in his 
job, he decided to take a bold step.? He did something.? Richardson invoked a 
rarely used authority in the Federal Power Act to require out-of-state 
generators and marketers to sell into California upon demand.? The Section of 
the statute cited had not been invoked since World War II.? If it was good 
enough then, then it is good enough now. 

Richardson also ordered BPA and WAPA to ship as much power to California as 
possible. 

In a way, the Order worked.? Because of credit issues, out-of-state parties 
have been loath to violate their credit policies just to sell to California.? 
Hence, the imports into California became scarce, and the ISO was teetering 
on another Stage 3 Alert yesterday morning.? Because of the Order, BPA 
started drafting from its hydro reserves, somewhere in the neighborhood of 
1500 MW, and PowerEx delivered another 400 MW.? From where did this power 
emanate? 

Clearly, in the case of BPA, they are selling to California at the risk of 
being unable to meet their own requirements later this year and next.? No 
rain and cold weather could put BPA in a world of hurt.? Further, the 
increased hydro spill may effect salmon. 

I sent by e-mail to Mr. Richardson that included some wonderful recipes for 
the damaged salmon. I mean, what do you do with tons of smashed salmon that 
you would otherwise love to eat.? Pates, souffl,s, patties, chilled, ground 
winter run, smashed spring run primavera, roasted, mashed fall run.? You name 
it.? We can whip up a mess of smashed salmon for just about any occasion.? 
And, the added benefit is that California gets to continue the holiday season 
festively, with lights on, without interruption. 

I was reminded of a letter written to the Burrito last year.? It was a phony 
announcement that, in retrospect, wasn't far off.? Do you remember it? 
? Exclusive: Christmas Lights Cause Crisis

Due to increased evening ramps caused by heavy Christmas light loads, the 
California Independent System Operator (ISO) will begin running a series of 
Public Service Announcements (PSAs) this week designed to lessen electricity 
reliability concerns.? Because homeowners? tend to turn their Christmas 
lights on at dusk, there is a surge of? electricity demand that can create 
havoc on the balancing act between? generators and users of power. The ads 
will request that homes with odd numbered addresses turn on their Holiday 
lights between 5:00-5:30 pm and? even numbered homes between 5:30-6:00 pm.? 
According to Kellan Flukiger, ISO Vice President of Operations, the rationing 
is required to avert an electricity crisis: "We're seeing extreme ramps that 
are causing demands on the grid, we'll use this voluntary process for now to 
try and manage the problem." 

The Author has learned, however, that the ISO intends to turn to a more 
direct approach to control the problem after December 15th.? Tariff Amendment 
73g, a little known document that to date has been? internal to the 
California ISO, could have a major impact on the Holiday plans of 
Californians.? The memo calls for some combination of a two-pronged attack to 
keep Californians from all turning on their Christmas lights at the same time.


The biggest question, outside of the deliveries of BPA and PowerEx, is what 
price is being paid for the power ordered by the California ISO. The Order 
states that power will be sold to the ISO at a level that would ensure 
generators receive a fair return.? What's that?? I know that some of the 
Northwest power producers are sleeving their sales through credit-worthy 
third parties.? But, other than that, I am not sure of the details. 

Things FERC and Federal 
?@@@ WPTF Supports PX Emergency Filing 

The Power Exchange filed an emergency motion on Monday to keep alive its 
energy markets in light of the emergency changes made by the ISO the previous 
Friday.? The PX requested an emergency order from FERC removing the "hard 
cap" on Adjustment Bids and replacing it with an energy price equivalent that 
allows forward buyers and sellers to transact ahead of the ISO real-time 
market.? Currently, the ISO hard caps the Adjustment Bids at $250/MWH, which 
becomes the zonal price if congestion is present.? The mix of hard and soft 
caps pushes more people into the real-time market, and wipes out much of the 
supply that would otherwise show up in the forward markets. 

The WPTF Board filed comments with FERC on Wednesday supporting the PX's 
motion.? The ISO filed against the PX motion, and the ISO offered a plan of 
their own.? Copies of our filing can be found, along with all our other FERC 
and PUC filings on our web page.? If you don't have a password for our 
website (wptf.org), then e-mail? charlotte@wptf.org and request such.? She 
will be glad to assist you. 

Mailbag 

I received so many great e-mails, that I don't know where to begin.? It's 
like opening presents. 

Julie Blunden of Greenmountain Energy wrote to me in response to the "old 
boys" club inherent in the utility industry. She said, "Gary, not only is 
power no longer a boys' club, but as I continue to meet all of our new folks 
in Austin, I think it's hysterical that I meet so many of them in the 
women's' room.? What a difference 15 years makes.? We're all reading the 
burrito voraciously these days - these are historic, and painful times." 

Julie, I would like to meet as you do some of your colleagues in Austin.? 
Julie's fellow traveler (careful), Rich Counihan, also wrote to me.? He said, 
"I think your point, and Commissioner Hebert's on the importance of P.R. is 
crucial.? As a result, the energy retailers have changed their name from 
Alliance for Retail Markets (ARM) to Competitive Retail Energy for Consumers? 
(CREC) and hired a P.R. firm in Sacramento to help get the message of 
consumer choice out there." 

Our best wishes to CREC, Rick.? We need your success.? Also writing to me 
regarding the importance of PR was Tom Allen, VP of External Affairs at 
Southern Energy.? Tom wrote, "Gary: I am new to this issue as an employee in 
External Affairs, Southern Energy- West Region.? I am in transition to 
California, and have been on the job about 2-3 weeks.? I could not agree with 
you more regarding "where" this battle will be won or lost. Generators cannot 
and will not be able to separate themselves from the consumer pain that was 
felt in San Diego this past summer.? Consumers elect the Gov et al and their 
"pulse" will dictate final direction in the political arena.? While we all 
prepare for the legislative and regulatory battles, let's not forget that the 
idea here was to provide consumer value over time. 

"I think a "blanket" attack on consumer messaging is very possible.? The key 
will be how coalitions (formal or informal) decide to come together to fund 
such an initiative. 

"Being a transplant to the issue and somewhat of an outsider, here are some 
messages that must articulated clearly with some sort of definitive 
documentation (beyond our opinion.... meaning we need to pay for it 
somewhere) : 

"1 - The "value" of competition to the consumer.? Why go forward?? What's in 
it for me? 

"2 - The true effects / cost (negative value) for going back to cost-based 
approach.? Let's live in lifelong subsidy. 

"3 - The issue is bigger than energy.? The investment world is watching.? Is 
California a good place for business to do business? 

"I agree with the P/R blitz.? I think there needs to be back-up when 
challenged.? What California institution could provide such in a very short 
time frame?" 

Thank you, Tom, for sharing your thoughts, and welcome to the club.? Finally, 
from new GM at the City of Anaheim and formerly of LADWP, Marcie Edwards 
wrote, "Gary;? Well, Monday is my last day at LA.? I have learned a lot from 
the Burritos; we'll see if the company can learn to appreciate its rather 
piquant flavor without me here to say, "Hey, it tastes just like Chicken!" 

Best of luck to you, Marcie.? Thank God Almighty, you are free at last, free 
at last. 

Odds and Ends (_!_) 
?@@@ WPTF General Meeting Set for February 8 and 9 in Scottsdale, Az. 

It is not too soon to start planning for our February event.? The next WPTF 
General Meeting will be held on February 8 and 9 at the Marriott Resort in 
Old Town Scottsdale, Arizona. Their phone number is 1-800-835-6205 or 
480-945-1550. 

We have blocked 26 rooms for February 8, and the price is $229.00 per suite.? 
All these rooms are on a first-come basis and seeing that the area is so 
popular at this time of year, we cannot secure any more rooms at this 
location. The Hotel wants all reservations made ON OR BEFORE January 9, 
2001.? Please remember this area is extremely hard to locate space at this 
time of year for a reasonable rate. 

Air transportation into Phoenix is available from all major airlines and the 
Hotel is located only 15 minutes from the Sky Harbor International Airport.? 
Transportation costs $10. -$20., utilizing SuperShuttle or taxis. 

On Thursday, February 8, WPTF members will congregate for a members-only 
meeting.? That will begin at 3:30 p.m. and conclude at 5:00 p.m.? A no-host 
dinner reception ($45/person) will be held from 7 p.m. to 9 p.m.? Reservation 
for the dinner must be made with our event coordinator, Barb Ennis, at e-mail 
address baennis@earthlink.net. 

On Friday, our General Meeting will begin at 9:00 a.m. and end at noon. Our 
guests speakers will include John Underhill of Salt River Project who will 
brief us on Desert STAR and AISA matters; Scott Miller of FERC who co-lead 
the FERC study on California,s power markets, and Kennedy School lecturer 
Philip Sharp (invited) who will discuss likely national energy policies.? 
Lunch will be provided by WPTF 

Odds and Ends (_!_) 
?@@@ Have a Smile 

In olden times, it could be decades before major events were cast in verse. 
But The Great 2000 Election Controversy is so big that a bunch of all-star 
poets have come out of retirement to quickly set the story to rhyme. 

?For starters, history buff Henry Wadsworth Longfellow: 

Listen, my children, don't dare ignore, 
The midnight actions of Bush and Gore 
In early November, the year ought-ought, 
Hard to believe the mess they wrought. 
Two billion bucks of campaign bounty 
All came down to Palm Beach County. 
What result could have been horrider 
Than the situation we found in Florider? 

Edgar Allen Poe is his usual gloomy self: 

Once upon a campaign dreary, 
one which left us weak and weary 
O'er many a quaint and curious promise of political lore 
While we nodded, nearly napping, 
suddenly there came a yapping, 
As of some votes overlapping, energy-zapping to the core 

'Tis a mess here," we all muttered, 
as the network anchors stuttered, 
Stuttered over Bush and Gore. 
Could there be another election with such a case of misdirection, 
One with such a weak selection, 
yet fraught with tension to the core? 

Quoth the ravers, "Nevermore." 

Britain's Edward Lear's limerick is lighter: 

There once was a U.S. election 
That called for some expert detection - 
How thousands of pollers 
Could become two-holers 
Like outhouses of recollection. 

Ditto Ogden Nash: 

I regret to admit that all my knowledge is What I learned at Electoral 
Colleges, 
So tell me please, though! I hate to troubya, 
Will the winner be Al, or will it be Dubya? 

Joyce Kilmer's a media analyst: 
I thought that I would never see 
The networks all so up a tree. 

Walt Whitman is lyrical, as always: 

Oh Captain! My Captain! 
our fearful trip's not done 
The ship has weather'd every rock, but 
nobody knows who's won. 

Alfred Noyes rhythmically rumbles: 

And still of an autumn night they say, 
with the White House on the line, 
When the campaign's a ghostly galleon 
and both candidates cry, "'Tis mine!" 

When the road is a ribbon of ballots, all within easy reach, 
A highwayman comes riding, 
Riding, 
Riding, 
A highwayman comes riding, and punches two holes in each. 

Dr. Seuss takes a look at election officials: 

I cannot count them in a box 
I cannot count them with a fox 
I cannot count them by computer 
I will not with a Roto-Rooter 
I cannot count them card-by-card 
I will not 'cause it's way too hard 

I cannot count them on my fingers 
I will not while suspicion lingers. 
I'll leave the country in a jam - 
I can't count ballots, Sam-I-Am. 

Clement Moore adopts a holiday theme: 
'Twas the month before Christmas, when all through the courts, 
All the plaintiffs made stirring bad ballot reports. 

Which leaves the problem: 
Perhaps the best way to stop complaints raucous 
Is to start over again, with the Iowa caucuses. 

??? Odds and Ends (_!_) 
?@@@ The Toughest Interview Ever 

The nights I drive my son to hockey practice, especially in winter, are 
silent.? It's dark, the weather is cold, and we each drift into our own 
thoughts.? He listens to the rock station of his choice on the way to 
practice.? I get my choice of station, usually jazz or classical,? on the way 
home.? We both have agreed to set the volume in either travel direction at a 
tolerable level, four ticks on the analogue scale.? Last night the silence 
was suddenly broken. 

"Okay," he said as we started the thirty-minute ride to his practice, "this 
is boring. We're going to have a conversation."? "What do you want to talk 
about," I asked somewhat startled?? He said he would ask me some questions.? 
"Gary," he asked, always addressing me in the familiar, "what was your 
favorite thing to do when you were a kid."? I was struck dumb.? I didn't know 
how to answer the question because I was afraid that whatever I selected, he 
would say, "BORING."? So, I drifted a bit in my answer.? I was very 
tentative.? I started with my high school years, and what I liked, and who I 
hung around with.? I then spoke about younger days when I was my son's age, 
13, and then continued into my elementary school experiences.? He listened to 
every word, and asked more questions.? What were my brothers like, which one 
of my brothers was I close to, why did I look forward to going to high 
school, what instrument did I play in the band, and on and on.? We didn't 
stop until we reached the ice rink. 

I had butterflies in my stomach.? Picture this.? I have suddenly found my 
professional life awash with newspaper interviews, TV interviews, microphones 
stuck in my face, and audiences asking me dozens of tough questions.? The 
more of that I do, the more comfortable it becomes.? Compare that with my 
fear of answering these simple questions posed to me by my son about my 
life.? Would I be judged harshly?? Would my answers disappoint him?? Every 
Dad wants to be a superstar to his son. 

I guess I passed, and I am thankful for the experience.? I'll probably 
treasure that conversation for a lifetime, not knowing why.? When you think 
about, I received the most precious gift a son can give a father. 

Well, on that note, I will wish each and every one of you a happy holiday 
season, whether you celebrate Chanukah or Christmas, or both, as we do.? It 
has been a privilege to write these Burritos for you.? I cherish your kind 
comments to me about our weekly get togethers.? I look forward to serving you 
next year in good health, and with less stress.? I'm looking for a quite 
time, maybe in April or May, when we can look back at the last few weeks, and 
wonder how did we ever get through it all? 

Have a great holiday. 

gba 
?