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Enron Mail |
Given the emphasis from all quarters on the need for retail competition to
make California work, would seem useful to strike a balance between the degree to which the comments emphasize wholesale and retail reforms. And for the record, Sue, no I don't talk like that. Best, Jeff Susan J Mara 11/02/2000 03:50 PM To: Mary Hain/HOU/ECT@ECT cc: Alan Comnes/PDX/ECT@ECT, carrrn@bracepatt.com, Christopher F Calger/PDX/ECT@ECT, Dave Parquet@ECT, Donna Fulton/Corp/Enron@Enron, James D Steffes/NA/Enron@Enron, Jeff Dasovich/NA/Enron@Enron, Joe Hartsoe@Enron, Mona L Petrochko/NA/Enron@Enron, Sarah Novosel/Corp/Enron@Enron, Tim Belden/HOU/ECT@ECT Subject: Re: November 9 FERC Comments Gang, I didn't get Jim's e-mail but ..... Here are my comments This looks good as a bottomline message, but I'd like to dress it up and take it out on a date first (doesn't dasovich talk like this?) I'm afraid we'll look greedy unless we focus strongly on the RETAIL affect of the low price cap and how raising it would ultimately allow retail customers to save money and wholesale markets to work more efficiently. there is some stuff we can quote in the iso's market surveillance com report. we also have some real world experience to draw upon (i'm told that FERC occasionally really likes to hear about the real world) -- we had a number of customers on demand responsiveness plans in the east and we sent them checks for BIG BUCKS this summer. To the contrary, in the west, we were working with some customers (a few hundred MWs) to participate in the ISO's program -- after the Board voted to lower the cap to $250 -- the customers all said sayonara -- could no longer justify the expense and the interference in their operations. These are powerful examples of how price caps influence retail demand response. This only goes so far, however... The FERC could easily eliminate the problem by exempting demand side bids from the price caps. SO, we need more... I think we should focus on the practical effects of a "soft" cap (not simple and not certain) -- and how stable markets need stable price caps -- "soft" caps are not a stable price and do not send a stable signal for investment in new generation (the market may never know the real price since it doesn't set the MCP). The staff report provides some good evidence on why the caps are too low and we could also use the ISO's calculation of prices for short-term peaking capacity. Then mention the issues Mary discussed below (information; cap mechanism bad for power marketers in particular) Sue Mary Hain@ECT 11/02/2000 01:03 PM To: Susan J Mara/NA/Enron@Enron, Mona L Petrochko/NA/Enron@Enron, Jeff Dasovich/NA/Enron@Enron, Alan Comnes/PDX/ECT@ECT, Tim Belden/HOU/ECT@ECT, Dave Parquet, Christopher F Calger/PDX/ECT@ECT cc: James D Steffes/NA/Enron@Enron, Joe Hartsoe@Enron, Sarah Novosel/Corp/Enron@ENRON, carrrn@bracepatt.com, Donna Fulton/Corp/Enron@ENRON Subject: November 9 FERC Comments In response to Jim's E-mail - here's is my proposed list of issues for Enron's November 9 comments. We have to send our issue list to FERC tomorrow so please comment on this ASAP. We should discuss price signals including: price caps and market information Here's my rationale. Since we'll only have five to ten minutes to talk, our comments should focus on the most important commercial issues to us: removing or improving price caps and improving market transparency by providing market information to market participants. We could summarize the positions we took in the white paper about why the Commission shouldn't allow a price cap at all and why we need information. In addition, we should assume that they will adopt price caps anyway and may reaffirm their own proposal, so we should also tell them how the $150 cap will be too low to incent investment in new generation, how the reporting requirement will create special problems for power marketers (we don't have marginal costs and the Commission has yet to determine what opportunity costs are), and how they still have not addressed the problems created by OOM. In addition, although I don't think we need to tell FERC this, our comments could briefly congratulate the Commission for removing the buy/sell requirement, addressing underscheduling of load, creating independent governance and directing the ISO to file generation interconnection procedures. Although our written comments will probably want to discuss any clarifications of this measures as well as the long term measures the Commission discussed (reserve requirements, alternate auction mechanisms, balanced schedules, enhanced market mitigation, congestion management redesign, demand response programs, RTO development and compliance) our oral comment time is too precious to use on these issues. In addition, our written comments will want to beef up the legal support for the Staff's conclusion about refunds and perhaps request rehearing of the Commission's decision to move the refund effective date. I'm sure we'll find more issues as we go.
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