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Enron Mail |
Can't thank you enough. Great report and I wish that I'd been there with you
to experience it. I'd like to stay in touch. It's a high priority of mine to come down there (as I've mentioned a few times). I'm going to try and do it before the month's out. I hope we can have lunch or something and compare notes about all this stuff. This won't be going away for quite some time. Thanks again for your help. Best, Jeff Dana Perino <dana@gablegroup.com< 11/14/2000 02:49 PM To: jdasovic@enron.com cc: Subject: Notes from FERC Meeting Hi, Jeff -- I'm so glad you called today and that I could run over to the FERC meeting. Always interesting! Here are my notes -- I apologize in advance if they are a little rough. Over the past few years I've become a much faster typist than when I write longhand. Gov. Gray Davis November 14, 2000 FERC Hearing in San Diego Serious flaws in the energy market in California. Rates are not reasonable nor just. Two points: 1. Given FERC's findings, you must order refunds. If you don't, then what was the point of the findings. Believes FERC has the authority to issue the refunds and called on them to order them sooner than later. 2. Impose hard price caps and big caps that will protest consumers from another anticipated crisis in summer 2001. Davis said he believes that deregulation can work eventually, if market is competitive and all parties act responsibly. But he believes it will take 4-5 years to get to a competitive market. Without the price caps, he believes there will be a lot of unwarranted pain inflicted on the consumers and businesses of CA. He said there is no justification for the huge profits the energy companies netted in the third quarter. He said he won't stand to allow CA companies to be brought to their knees. The market is dysfunctional. People in SD believe the marketplace is being manipulated for obscene profits. Wants to level off dereg for 4-5 years to allow market to work and for more power plants to come online. He said he believes in people making money and that dereg can work -- but only when it's competitive. Strong belief in wholesale price caps. Angry that FERC stripped CA ISO's ability to protect consumers against price spikes. He said FERC's plan is a reckless deregulation experiment and that the Commission's plan will only make things worse next summer. Davis asked FERC to modify its order. He said that FERC doesn't believe that CA can get the plants online. Doesn't blame them given the history of CA, but that he has taken measures to speed up from 1 year to 6 months to site new plants. He's allocated $50 million from the general fund and $500 million for demand reduction, renewables and conservation programs. He believes he can reduce demand and increase supply without public health risks or environmental degradation. He said he wants to have someone accountable/electable to the ISO and the Power Exchange Boards, that the state should have the right to include people from CA on those Boards. He talked about the negative effects the actions in CA will have on other states watching this "great deregulation experiment." He said FERC's proposed solution does nothing to lower prices. To the contrary, it's to bring businesses and consumers to their knees. And Davis predicted "a ratepayers revolt that will strip FERC of its authority and take matters into their own hands." He said he believes strongly that FERC has the remedies to protect consumers, give them rebates and prevent this from happening again. He said if FERC just focuses on getting more plants online, all hell is going to break loose. That FERC can't sit in Washington, 3,000 miles away and take action on CA -- that will only cause more problems. Dana speaking again -- If any of this doesn't make sense or you have additional questions, please let me know. I have a few things scribbled in the margins that may help piece it together better. Again, thanks for the opportunity to help. I look forward to talking to you again soon. Best, Dana Dana Perino dana@gablegroup.com 619-234-1300 ext. 238
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