Subject: Articles for FERC
From: [email-masked]
Cc: [email-masked]
Date: Thu, 24 Aug 2000 10:47:00 -0700 (PDT)

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
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The root cause of California's electricity crisis is regulation, not 
deregulation. 

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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.

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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."

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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." 

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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