Message-ID: <21274428.1075851006348.JavaMail.evans@thyme> Date: Thu, 24 Aug 2000 10:47:00 -0700 (PDT) From: gavin.dillingham@enron.com Subject: Articles for FERC Cc: steven.kean@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: steven.kean@enron.com X-From: Gavin Dillingham X-To: Joe Hartsoe@ENRON X-cc: Steven J Kean X-bcc: X-Folder: \Steven_Kean_Oct2001_2\Notes Folders\Attachments X-Origin: KEAN-S X-FileName: skean.nsf Joe, Below are articles that state that deregulation is better for everyone in the long run and though the California issue is bad, currently, it is not because of deregulation, but because of transmission and generation issues. ''A deregulated world is the right market for electricity,'' said Ron Walter, senior vice president at Calpine, an independent power producer in San Jose that is building three plants. New York Times Article ------------------------------------------------------------------------------ -------------------------------------------------- The root cause of California's electricity crisis is regulation, not deregulation. ------------------------------------------------------------------------------ ------------------------------------------------------ Other States are learning from CA deregulation and believe that there deregulation will be more successful. Electric utility deregulation is sending up sparks in California, but that's not short-circuiting other states' plans. At least for now, many are pledging to learn from California's mistakes and forge ahead by opening their own markets. Texas, Ohio and Michigan are among 25 that have passed deregulation laws but not yet put them into effect. The three heavy industrial electricity users have big plans for competition. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ------------------- Enron is mentioned in this article along with Boeing stating that..."We've certainly been exposed to the higher prices, and it's uncomfortable in the short term," said Keith Warner, the energy manager at Boeing, which spends about $200 million on power in the U.S. annually. "But in the long term, deregulation and open access (to transmission from other electric companies) is where we want to be. In every deregulation we've gone through in this country, competition has lowered prices." ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ----------------- This shows a more even view of deregulation stating its faults and its advantages. "The lack of supply has to do with deregulation and the uncertainty of a financial return on new investment of generation," Borenstein said. "But we still would have a supply problem under regulation and prices would still be high." ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ---- Mercury News article states it is not time to re-regulate the markets and provides the following solutions to solve the crisis. Article Below. Matters will improve when California has: -> More sources of power. -> A more sophisticated electricity market. -> Smarter consumers -- that is, consumers with the information they need to be thrifty. Also the article talks of the Power Exchange (PX) and the Independent System Operators (ISO) and how these two groups are making the prices higher; i.e market imperfections that result from the uniqueness of electricity as a commodity and the immaturity of the new exchanges are enabling producers to obtain higher prices than the underlying conditions dictate. Article concludes by saying the deregulated market is just beginning and with a few adjustments will work out fine