Message-ID: <30940505.1075856160728.JavaMail.evans@thyme>
Date: Mon, 11 Dec 2000 08:48:00 -0800 (PST)
From: rebecca.cantrell@enron.com
To: tori.kuykendall@enron.com
Subject: California Market
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Tori -- please let me know if I did not correctly capture the essence of our 
conversation this afternoon about what is going on in California.  I would 
also like to have you take a look at the draft of the filing when I get it to 
make sure our facts are okay.

Thanks. 
---------------------- Forwarded by Rebecca W Cantrell/HOU/ECT on 12/11/2000 
04:46 PM ---------------------------
   
	Enron North America Corp.
	
	From:  Rebecca W Cantrell                           12/11/2000 04:40 PM
	

To: rrich@bracepatt.com
cc: Leslie Lawner/NA/Enron@Enron 
Subject: Leslie's summary of conversation w/Steve Kean

Leslie was not sure she had your e-mail address right, so I told her I'd 
forward it just in case.

Would you go ahead and take a stab at writing up a response?  I will have 
Melinda send in a plain intervention in hard copy so you can file the 
comments electronically if we need more time.

I also talked to our West Desk trader about out California business.  She 
trades El Paso and TW.  ENA has about 80 MM of released capacity -- 60 MM at 
Topock and 20 MM at Ehrenberg.  We are nominating our max volume, but because 
of allocations, it doesn't flow 100% due to cuts.  About half of the gas is 
spot and half is base load (base load being 30 day deals done at 
first-of-month index pricing, which is about $14).  The base load markets are 
mostly PG&E and other utility core customers.  The biggest spot markets are 
the power generators.  Our spot gas is trading on Enron OnLine.  We put a bid 
and an offer price on each deal, and the prices are generally close.  The 
trader says that as soon as she puts an offer on the screen it gets hit.

Hope this helps.  Call and leave me a message if you need anything else 
tomorrow morning.  I will be at the doctor's office probably most of the 
morning, but I will check in occasionally.

Thanks.
---------------------- Forwarded by Rebecca W Cantrell/HOU/ECT on 12/11/2000 
04:20 PM ---------------------------
From: Leslie Lawner@ENRON on 12/11/2000 04:14 PM
To: Rebecca W Cantrell/HOU/ECT@ECT, randysrich@bracepatt.com
cc:  
Subject: 

Talked to Steve Kean.  Here is what he wants to argue:

Price caps don't work.  Look at the Cal ISO experience.  If prices are kept 
down, there won't be supply available.  

Best thing is to let the market see the price increases REAL TIME, so that 
they can act on those prices.  In California, very few customers are seeing 
the results of  $40 gas right now.  There is no conservation due to price 
movement, and so demand stays high, prices keep going up, and customers will 
die of shock next month.

Also,. rather than blaming marketing affiliates for the situation, look to 
what the California utilities are doing.  Are they taking gas out of storage 
(steve thinks not much)?  Are they reselling the gas?  El Paso Marketing does 
not control a signfiicant portion of the market even with their 1.2 Bcf.  The 
real issue is to have consumers receive real time pricing signals so that 
demand can react to the prices.

I would also add the arguments that the proposed caps and re-regulation would 
not take care of the problems.