Dow Jones Scoop of FERC report

FYI.

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Subject: Dow Jones Scoop of FERC report

---------------------- Forwarded by Gregory T Blue/HOU/Dynegy on 10/27/2000
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"Golden, Mark" <Mark.Golden@dowjones.com< on 10/27/2000 03:04:02 PM

To: "Pergher, Gunther" <Gunther.Pergher@dowjones.com<
cc:

Subject:

-- *DJ FERC Finds No Abuse Of Calif Elec Mkt Pwr -Commissioner --

-- *DJ FERC Won't Order Refunds By Generators - Commissioner --

-- DJ FERC/Calif -2: Report Blames Calif Market Structure --

LOS ANGELES (Dow Jones)--The Federal Energy Regulatory Commission
investigation into California's wholesale energy market has found no abuse
of
market power by generators this past summer and the agency won't order
generators to refund billions of dollars in excessive revenue to consumers
or
utilities, a FERC commissioner told Dow Jones Newswires.
The FERC commissioner said generators weren't solely to blame for
California's
summer of soaring power prices, but said constraints within the market
structure, such as "hedging" restrictions imposed by state regulators -
utilities' limited ability to purchase power in the forward market -
resulted in
higher prices.
The FERC commissioner said market power did occur but generators weren't
purposely manipulating the market in order to make more money so refunds
will
not be ordered.

DJ FERC/Calif -3: `Sweeping' Changes Planned For Cal-ISO,PX --

Market power is a term used to describe how generators can influence
power
prices by controlling electricity supply during tight demand periods.
As reported, FERC announced last week that it had received the results of
an
eagerly anticipated staff investigation of market conditions that sent
power
costs in California soaring over the summer.
The agency scheduled an extraordinary meeting for Nov. 1, at which it
plans to
vote on proposed remedies based on the report's findings.
California experienced a summer of soaring wholesale power prices that
led
to
landmark state Legislation to cap wholesale prices for retail customers in
San
Diego, where most of the price shocks were felt.
In addition, sweeping changes within the state's Power Exchange and
Independent System Operator will be proposed, the commissioner said, citing
the
report.
The FERC report also said it was a bad idea to force utilities to
purchase
power exclusively from one exchange with limited products, and various
price
cap
proposals that were passed by the ISO recently exacerbated the price
situation,
according to the commissioner.
A FERC spokeswoman contacted by Dow Jones Newswires Friday said the
agency
wouldn't comment on what or what's not in the report.
-By Jason Leopold; Dow Jones Newswires; 323-658-3874;
jason.leopold@dowjones.com

(END) Dow Jones Newswires 27-10-00
1953GMT(AP-DJ-10-27-00 1953GMT)