Re: retail competition in electricity

Folks:

My apologies in advance if I vent somewhat.

Briefly, some of you know that I attended Berkeley's Policy School. I have
been very closely involved with the conference Severin describes in his note
to Littlechild. I have been working to try to establish a joint venture
between the policy and business schools at Berkeley to hold an "energy
summit," where national and international energy leaders would converge on
California (under the auspices of UC Berkeley) to talk energy policy. Jim
Steffes has helped a lot in brainstorming the idea. In short,, our goal was
to have a group of prominent folks squarely refute the extremely retrograde
notions of "turn the clock back" that the Governor of California's two most
recent appointees have been articulating at every opportunity over the past
several months, and re-seize the agenda in California. The "energy heads of
state" at the summit would come up with solutions for going forward.

The concept (and invitees) that Severin describes is loosely based on
proposals I have made to the "steering committee." However, for reasons I
won't bore you with in this note, the effort has frankly turned into a
fiasco. I notified the group this week that Enron would not be
participating, that they should go forward with the conference without us,
and that I would help somewhat (contacts, etc.) when (and if) they ever came
to agreement on the agenda and particpants. From my perspective, the effort
turned out to be a rather big disappointment. I urge us not to get involved
or contribute $$s. At this juncture I would recommend against having Ken Lay
participate. Depending on how the thing shapes up, we may or may not want
to have someone at a substantially lower level participate, but I'm
pessimistic at this point. If anyone would like to discuss my reasons in
more detail, I'd be happy to discuss.

I still think the idea of an energy summit is very promising. But the forum
that these folks are creating ain't the right one.

Best,
Jeff

Mark Schroeder@ECT
09/08/2000 04:09 AM
To: Steven J Kean/NA/Enron@Enron, Richard Shapiro/HOU/EES@EES, Susan J
Mara/SFO/EES@EES, Jeff Dasovich/SFO/EES@EES
cc: Kyran Hanks/LON/ECT@ECT
Subject: retail competition in electricity

Please see Professor Littlechild's note to our former Deputy Chairman for
Enron Europe, Ralph Hodge. Ralph is no longer with us. Let me know if you
would like to support ($$) Littlechild coming to California. He was a
somewhat passive regulator (too academic), but is a credible authority,
having written what is regarded as one of the seminal works on incentive
regulation, which is the model in use in the UK. He likes Enron, and has
been trying to get us to pay him for some work for some time. No need for it
here in the UK, but I would use him in emerging markets given the
opportunity. Let me have your thoughts at your earliest convenience.
thanks mcs
---------------------- Forwarded by Mark Schroeder/LON/ECT on 08/09/2000
10:08 ---------------------------

Enron Capital & Trade Resources Corp.

From: "Stephen Littlechild" <littlechild@tanworth.mercianet.co.uk<
08/09/2000 10:00

To: "Ralph Hodge" <ralph.hodge@enron.com<
cc: "Mark Schroeder" <mark.schroeder@enron.com<, "Kyran Hanks"
<Kyran.Hanks@enron.com<

Subject: retail competition in electricity

Dear Ralph
?
I have just written a?paper on retail competition in electricity, arguing
that Joskow, Hogan and Ruff, and California, have got it all wrong, both in
theory and in practice.? It is forthcoming shortly in the DAE and Judge
Institute working paper series at Cambridge, but I thought you might like to
see a copy now (attached).
?
This is obviously a hot issue in California at present, and this morning I
received an invitation to participate?in a debate there in November (copy
forwarded separately). It seems that Enron is also to be invited. I have no
other commitments in the US at that time.? Is is something that Enron might
be interested in supporting, or for that matter developing further?
?
We spoke some time ago about the Common Carriage Consultative Working Group
at Ofwat. I did in fact aprticipate in that, along with Kyran Hanks. It was
a real eye-opener, to see how little awareness there was of the basic
conditions conducive to competition, like separate businesses and accounts.?
I'm not sure whether Enron is pursuing this now or not. No doubt lots of
other things going on.
?
I should be interested to hear from you on retail competition.? I am copying
this to Mark Schroeder and Kyran.
?
With regards
?
Stephen
- Summary 22Aug2000.doc
- Why we need electricity retailers 22Aug00.doc