CA Power Plant Emissions

Steve - attached is a new chart that paints a clearer picture of the existing
generation emissions v. new generation emissions. Some of the units are
fairly inefficient ('though some of these units are currently in the process
of "repowering" to increase their efficiency) which increases their effective
emissions.

(see Chart 1)

In thinking more about the discrepancies in emissions b/w existing and new
generation, it really amounts to a fundamental flaw in the rules for
nonattainment areas in the Clean Air Act. These rules have no provisions for
growth and create a pretty strong competitive advantage for existing sources
of emissions. Basically, any new sources in nonattainment areas have to go
to existing sources and convince them to reduce their emissions. In CA's
case - since they have been nonattainment for so many years many of the
sources of emission reductions have already been tapped. In other
nonattainment areas like Houston and Atlanta - the nonattainment geographic
boundaries are so small that there are only a handful of significant
stationary sources of emissions.

I don't think CA is going to be able to effect a lot of change on their own.
It is going to take a Federal legislative fix.

Let me know what other information you need.

Mary Schoen
Environmental Strategies
Enron Corp
713-345-7422