Message-ID: <10736276.1075848245767.JavaMail.evans@thyme> Date: Mon, 29 Jan 2001 06:32:00 -0800 (PST) From: linda.robertson@enron.com To: steven.kean@enron.com, richard.shapiro@enron.com, james.steffes@enron.com, joe.hartsoe@enron.com Subject: Possible Hearing Themes Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Linda Robertson X-To: Steven J Kean, Richard Shapiro, James D Steffes, Joe Hartsoe X-cc: X-bcc: X-Folder: \Steven_Kean_June2001_5\Notes Folders\Senate testimony re california X-Origin: KEAN-S X-FileName: skean.nsf I have always found it useful in preparing for congressional hearings to have "Hearing Themes." The themes represent both the points we want to make in our written testimony and the points we should try to emphasize in our oral answers to Member questions. Please feel free to edit. Here is a first cut: I. The energy problems in California are of its own making and ultimately will require action by the State government. The State did not deregulate in 1996, it misregulated. II. In the short-term, California must provide support to the Utilities to maintain reliability as they are doing with the California Department of Water Resources purchases and the Utilities' financial problems resulting from their inability to recover power costs should be addressed immediately by the State. III. For the long-term, California should: --Increase supply and reduce demand --Bring retail rates in line with the cost of a reasonable portfolio of electricity supply --Allow customers to benefit stable long-term contracts --Not abandon its commitment to foster retail competition. (Here we should explain what we mean by each point and suggest solutions. Our explanation should not assume deep knowledge of the problem or the solutions.) IV. The California "experience" does not mean deregulation leads to higher prices for consumers and a lack of reliable supply. --The California crisis illustrates that true deregulation is the answer, misregulation is not. --There are ample illustrations of "good" state deregulation efforts. --Current Federal efforts to increase supply and decrease demand should be pursued. --Federal efforts to increase incentives for power generation should include regulatory policies designed to extend open access to all uses of the bulk power transmission grid so that power can move freely to meet demand and new generation facilities may be brought on-line. V. Enron has been a positive presence in California. --Enron is neither a net generator nor a net user of energy in California. --We are in the business of making markets and making them work better. --From the outset, Enron has been working with all parties to find constructive, workable, and well-tested solutions to California's problems. --While we strongly disagree with the DOE supply orders, we have fully cooperated with them in California VI. Time is running out. California must act soon, just as our Federal efforts to put in place a national energy policy should be soon.