|
|
Enron Mail |
As to whether long term contracting by Cal. is a good idea, the answer is
somewhat mixed. We were one of the early parties pointing out the problems with total reliance on the spot market and encouraging more forward contracting. Given the utilities' precarious financial position there were two options: 1) outsource the default provider obligation to the market (this is what we prefer but there was no political support for it), or 2) have the state put its credit behind the purchases. California is pursuing the latter, with CDWR prucahsing the utilities' requirements. In the short term, we have criticized the state's plan because it contemplates state takeover of the grid; state participation in power plant financing, construction, and ownership; and they have not made it clear that CDWR really has the money to pay for all the purchases. I am attaching text I have used as the base for a number of communications with policymakers. Mark Schroeder@ECT 03/11/2001 02:11 PM To: Richard Shapiro/NA/Enron@Enron, Steven J Kean/NA/Enron@Enron cc: Subject: news/updates In the press, I saw two news stories that I wondered if we (Enron) had any role/hand in, and what was the offical "spin" in both cases. 1) The FERC Order requiring something like 55-65 million dollars in refunds by generators (or did it include traders) for overcharging in California in December, if I recall my facts/news stories correctly, and 2) the reports of 40 companies entering into 10-year contracts with California (touted by Davis). Was Enron a contracting party? Do we think this is a good solution (I think I know the answer, but defer to your lead on this, so we stay on your message)? thanks mcs
|