Message-ID: <31930394.1075844239008.JavaMail.evans@thyme> Date: Thu, 10 May 2001 10:33:00 -0700 (PDT) From: john.shelk@enron.com To: steven.kean@enron.com, richard.shapiro@enron.com, james.steffes@enron.com, christi.nicolay@enron.com, shelley.corman@enron.com, harry.kingerski@enron.com, tim.belden@enron.com, paul.kaufman@enron.com, alan.comnes@enron.com, janel.guerrero@enron.com, linda.robertson@enron.com, tom.briggs@enron.com, joe.hartsoe@enron.com, sarah.novosel@enron.com, carin.nersesian@enron.com Subject: Barton Subcommittee Approves California Bill; Price Caps Defeated Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: John Shelk X-To: Steven J Kean, Richard Shapiro, James D Steffes, Christi L Nicolay, Shelley Corman, Harry Kingerski, Tim Belden, Paul Kaufman, Alan Comnes, Janel Guerrero, Linda Robertson, Tom Briggs, Joe Hartsoe, Sarah Novosel, Carin Nersesian X-cc: X-bcc: X-Folder: \Richard_Shapiro_June2001\Notes Folders\Discussion threads X-Origin: SHAPIRO-R X-FileName: rshapiro.nsf The Energy and Air Quality Subcommittee meet for almost six hours today and approved an amended version of H.R. 1647, Chairman Barton's emergency legislation to aid California, by a 17-13 party line vote. The full Energy and Commerce Committee may take it up as early as next week (probably Thursday, May 17th). The Subcommittee DEFEATED an amendment by Rep. Waxman (D-CA) to impose wholesale price caps for 18 months. The amendment was defeated 12-20 with all Republicans voting against, including the three from California and Rep. Greg Walden (R-OR), who while seen as the last to decide to oppose the price cap amendment, was the most forceful and articulate in opposition to the amendment. Also voting "NO" were Democratic Reps. Ralph Hall (D-TX) and Chris John (D-TX), with which we had met in recent days. The final vote tracked our whip count going into the meeting. Rep. Albert Wynn (D-MD) offered and withdrew an amendment to delete the "negawatts" provision. There was bipartisan criticism that while the concept made sense, there were potential problems in terms of possible games playing, including end users being able to sell power while not actualy reducing their normal power levels. Another member said that electric coops that are required to sell at cost could have customers then go out and resell that power and make a lot of money. Several Members said businesses could shut down, put workers out of work and become energy marketers and make more money. Chairman Barton made a forceful defense of negawatts. While the amendment to strike was deleted, we will need to respond to these criticisms and shore this up before full committee next week. There will be another attempt to delete at full committee unless these concerns are addressed in an amended version. Ranking Democrat Rick Boucher (D-VA) offered and withdrew an amendment to reinstate FERC maximum prices for the secondary transmission market, thus reversing the Feb. 2000 FERC order. This woudl last for 18 months. Chairman Barton said he agreed with Boucher that there is a problem with what appear to be high gas transmission rates to California, but he disagrees with the proposed remedy. He pledged to work with Boucher before Full Committee mark-up. We are obtaining a copy of this amendment and should analyze it ASAP for its potential impact on Enron operations. Rep. Ed Markey (D-MA) offered and withdrew an amendment to impose a series of new tests to be administered by FERC all with the goal of discouraging spot market transactions, or at least what he would define as excessive use of the spot market, and at the same time encourage "deep bilateral mechanisms." The mechanisms included a "market balance test" that would say only sellers with a commitment to the long term market could sell in the spot market at unregulated rates and "spot market circuit breakers" that would be triggered when reserves are low in a given market. Chairman Barton said he likes the concept of a spot market circuit breaker, but felt that the amendment was too complicated to be evaluated today. We will also pursue an analysis of this amendment since it will likely be offered again in some form. Mr. Markey also offered and withdrew a "net metering" proposal that would establish federal interconnection standards for individual consumers who would want to use fuel cells and other renewable technology to put power onto the system. It was interesting that those who opposed negawatts spoke favorably of net metering even though they are complementary. The subcommittee by voice vote adopted a Walden Amendment to strike the section of the bill that would have required an RTO if 10 of the western governors approved it. The debate was pro-RTO but the rationale for deleting the provision is that one is already being formed and Members from those states did not want to upset the work already under way. A series of other amendments on other matters were offered and withdrawn, none of which relate to our activities.