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Enron Mail |
Leslie Lawner, Becky Cantrell and I met with Dan Larcamp at FERC yesterday = to discuss the marketing affiliate issue. He agreed with the latest press = reports that the upcoming rulemaking NOPR, expected to be voted out in Sept= ember, would not make major structural changes to the industry. The curren= t document is up to the Commission level and the Commissioners are clearly = considering the alternatives now. Larcamp said he expected a broadening of= the current market affiliate rules structure to include all corporate enti= ties. He did specifically mention that the Commission is not comfortable w= ith the link between financial and physical transactions and the possibilit= y for manipulation of market prices in one market (financial) to affect pri= ces in the other market (physical). He also expects the Commission to blen= d the gas and power rules, using the best practices of each. Any NOPR that= is issued will of course have comment dates to allow Enron and all industr= y participants to comment on any proposed rule changes. Larcamp indicated that he did not think there were pervasive afilliate disc= rimination issues in the industry, but said that the Commission needed to a= ct due to the political pressures they got from the Hill, etc. The El Paso= case is top on everyone's mind and is of special concern because it affect= s the California market, both gas and power.=20 Larcamp indicated that he is just now learning what a "Pat Wood" Commission= is going to want. He indicated that Wood has closer ties to the producer = community than either of the two former Chairmen. He therefore expects th= at the Commission will be responsive to that sector in taking a relook at t= he affiliate rules. However, Larcamp did mention that the only meeting tha= t he had previously had on the affiliate issue was with the INGAA group (Jo= e Hartsoe went with them). It is not clear whether the producer community = has lobbied this issue at the Commissioner level. We discussed strategy with Dan, how to let the Commission feel more comfort= able with the marketing affiliate issue. He suggested that he had gained a= lot by visiting the trading floors (including Enron's). He thought the Co= mmissioners and their immediate staffs would benefit from similar visits. = =20 We specifically raised the issue of market prices, and talked about tranpor= tation costs not equalling basis differentials. We stated that our markete= rs believed that the prices in the market were determined by market factors= in the specific areas of delivery rather than basin costs plus transport c= osts. Dan did indicate some agreement with this concept and thought that m= ore education at the Commissioner level would be very worthwhile. If you have any questions, call Leslie, Becky or me.
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