---------------------- Forwarded by Mary Hain/HOU/ECT on 01/30/2001 03:56 PM 
---------------------------


Mary Hain
01/30/2001 03:45 PM
To: Paul Kaufman/PDX/ECT@ECT
cc:  
Subject: RE: Questions you requested  

The available transmision capacity (ATC) "derate" did occur and has occured 
everydaysince about the 24th.  This fact was verified to me by our ISO 
customer contact on Friday.  Although we do not have the E-mails anymore, the 
ISO sends our traders E-mails everyday about the ATC on the ties, so this 
information is verifiable with the ISO.  Our customer contact didn't know 
exactly what day it had started and I have not wanted to pursue this more 
with the ISO, not knowing whether we wanted our identity divulged.  The 
reason for the zero rating is that the ISO is in a Stage 3 emergency.  The 
line was again rated at zero today.  I have been pursuing the following 
approaches to getting this issue investigated and resolved.  I've talked to 
Scott Miller at FERC and to Eric Thode in Houston.  Eric believes he can get 
the press to investigate and divulge this information for us in the trade 
press.  So check the trade press tomorrow. 



Paul Kaufman
01/30/2001 02:41 PM
To: Cynthia.Sandherr@enron.com, CraigGannett@DWT.COM, 
linda.robertson@enron.com, Mary Hain/HOU/ECT@ECT
cc:  
Subject: RE: Questions you requested

I agree with Craig ... we need to be really, really careful about the earth 
orbit issues identified below.   We shouldn't talk about the derating issue 
unless we can:   (1) confirm the derating occurred and document it; (2) tie 
the derating directly to action by the new board (i.e., determine that it 
wasn't due to maintenance or some other physical occurence); (3) show a 
direct impact on PNW prices that can't be easily explained in another way; 
and (4) show a continuing pattern (in contrast to an isolated event).


---------------------- Forwarded by Paul Kaufman/PDX/ECT on 01/30/2001 02:40 
PM ---------------------------
   
	Enron Capital & Trade Resources Corp.
	
	From:  "Gannett, Craig" <CraigGannett@DWT.COM>                           
01/30/2001 01:30 PM
	

To: "'Cynthia.Sandherr@enron.com'" <Cynthia.Sandherr@enron.com>
cc: "'Hain, Mary'" <mary.hain@enron.com>, "'Robertson, Linda'"  
<linda.robertson@enron.com>, "'Kaufman, Paul'" <paul.kaufman@enron.com> 
Subject: RE: Questions you requested



 This excellent material, and very important, but it's pretty
esoteric.  If you want to really kick the ISO and Davis in the shins, use
Mary's stuff about the ISO derating the transmission line at COB.   Assuming
it's true that the ISO has effectively shut down the northbound transmission
route at the Oregon border in order to hoard power, and that this raised the
market price in the NW by about $50-75 per megawatt-hour, and that this is
costing the NW $2-5 million per day (at least for the period that Mary
looked at), that will send the NW Senators into low earth orbit.  If we can
establish that this derating ruse was a change adopted by Davis's handpicked
ISO board, the NW Senators will escape Earth's gravitational pull.  For that
very reason, we have to be able to back up anything we say, and we need to
anticipate any defenses the ISO may have.  But if you want NW elected
officials to quit being so polite toward Davis, that will do it.

 Craig

-----Original Message-----
From: Cynthia.Sandherr@enron.com [mailto:Cynthia.Sandherr@enron.com]
Sent: Tuesday, January 30, 2001 11:21 AM
To: joshua_sheinkman@wyden.senate.gov
Cc: gpeters@epsa.org; Allison.Navin@enron.com; Steven.J.Kean@enron.com
Subject: Questions you requested


Joshua:

I found the Enron staff who have had the conversations with the Oregon PUC
so believe the attached Q&A meet your request.  If you need additional
materials, just let me know.
(See attached file: Ron Wyden Qs for Steve Kean.doc)


In addition, EPSA sent some questions they would like the Senator to ask of
any of the EPSA witnesses (Reliant, Calpine, Williams, or Enron) dealing
with the Impact of the Recent changes in the Management of the California
Independent System Operator:

Background:  The Cal ISO acts as the "air traffic controller" for the
interstate electric power grid in California.  The ISO determines who gets
access to the grid and under what terms and conditions.  It is the ISO that
helps ensure that access to the grid is truly open and non-discriminatory.
When the ISO was initially constituted several years ago, a "stakeholder"
management board was created that represented a wide range of market
interests---power sellers, generators, consumers, political leaders, etc.
After the power emergencies began last summer, this board was criticized as
too splintered and indecisive.  In a response to this perception and in an
effort to impose greater control over the ISO, the California state
legislature replaced the stakeholder board with a five-person board that
serves at the request of the California Governor.

QUESTION:  The Cal ISO has recently seen its management board changed from
one with broad stakeholder representation to one appointed by the
California Governor.  Given that California is a critical part of a larger
western regional power market, how can we ensure that regional power needs
are reflected in the decisions of the new state appointed Board?

ANSWER:  We really can't.  Most of the time, the Board has a limited role.
However, the "traffic controller" role becomes crucial when the power
crunch comes.  Every market participant needs to be worried that, during
times of real power emergencies, the Cal ISO Board will be too willing to
shoot first and ask questions later.  Companies with firm transactions
involving out-of-state entities may find their needs and commercial
interests sacrificed to prevent local political problems.  Instead of
robust, competitive regional markets, politicizing transmission decisions
practically guarantees an increasingly balkanized market.