Message-ID: <17036395.1075851967079.JavaMail.evans@thyme>
Date: Fri, 8 Jun 2001 11:57:00 -0700 (PDT)
From: peter.styles@enron.com
To: steven.kean@enron.com, maureen.mcvicker@enron.com
Subject: FW: Bullets re California in the NL?
Cc: nailia.dindarova@enron.com, richard.shapiro@enron.com
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I would add to what Teun says below a good lesson from California for the 
Dutch: Disconnect the functioning of the retail and wholesale markets at your 
peril. If bad regulatory/ political  intervention gets in the way of 
participation by new and old players in both on a level playing field, 
fingers will get burnt. In the Netherlands the incumbent generators and 
vertically integrated distributors have been given unfair advantages in a 
non-transparent manner in the wholesale market, whilst enjoying more or less 
guaranteed prices in the retail market. New entrants/ importers got squeezed 
and most consumers have not yet enjoyed the full benefits of liberalisation. 
Incidentally, in both California and the Netherlands there was excessive 
political trumpeting of the benefits and of the enlightenment of policymakers 
in advance, followed by a mess in practice. 

---------------------- Forwarded by Peter Styles/LON/ECT on 08/06/2001 18:50 
---------------------------
From: Teun van Biert/Enron@EUEnronXGate on 06/06/2001 10:05
To: Nailia Dindarova/LON/ECT@ECT, Peter Styles/LON/ECT@ECT
cc:  

Subject: FW: Bullets re California in the NL?

Email below was sent to both of you on Monday evening. 

 -----Original Message-----
From:  Van Biert, Teun  
Sent: maandag 4 juni 2001 21:08
To: peter.styles@enron.com; nailia.dindarova@enron.com
Subject: Bullets re California in the NL?

Peter, Nailia,

Today Dutch bank holiday, heard nevertheless your voicemail, please find 
below initial thoughts in bullet format:



Why California cannot happen in the Dutch market:

? Plenty installed capacity available 
Available import capacity about 30% of total demand
Price cap for distco's based on real quarterly purchase portfolio and 
industry average index 


Why California nevertheless -in the longer run- can happen:

? CHP plants are closed down and large generators are shutting down plants
Lack of grid system transparency with regards to importcapacity, operational 
aspects of the grid, balancing market etc. Biased signals to the market.  
Market structure with limited number of players therefore lack of 
competition. Prices do not reflect underlying market supply and demand ratio. 
Therefore new entrants are hesitating to add new assets to the market.
Environmental and spatial permits are time consuming processes. (e.g. 
National Government faces large resistance of local authorities against the 
siting of windmills). Governmental Policy aims at state of the art technology 
of new additions to the powerplantmix. Environmental Impact Report often 
necessary. 


Teun