Jim,

I am not too familiar with the ISO program.  I think they treat load 
curtailments as the equivalent of spinning reserve and pay as if it were 
spinning reserve?  I don't know how participation-friendly the program is for 
SCs.  I know that based on energy price signals we may at times try to agree 
with the customer to reduce the customers load so that we can resell the 
energy purchased for that customer.  However, I am not too sure whether we go 
through the hoops to bid and prove we deserve an ancillary reserve payment.  
You may want to check with Jubran and Neil on the commodity desk.

Roger




From: James D Steffes@ENRON on 10/12/2000 09:09 AM
To: Susan J Mara/SFO/EES@EES, Roger Yang/SFO/EES@EES, Jeff 
Dasovich/NA/Enron@Enron, Mona L Petrochko/SFO/EES@EES
cc:  
Subject: Re: Update on CA PUC Action on Interruptible Contracts  

Is there anything that Enron would like to see changed on the Cal ISO demand 
program for the Summer?  I know that we are not really worried about UDC 
Interruptible contracts, but maybe we can use this forum to change the way 
customers who volunteer get some benefits.

Jim





	Susan J Mara@EES
	10/11/2000 11:22 AM
		 
		 To: Roger Yang/SFO/EES@EES, Douglas Condon/SFO/EES@EES, Martin 
Wenzel/SFO/HOU/EES@EES, Edward Hamb/HOU/EES@EES, James M Wood/HOU/EES@EES, 
Greg Nikkel/HOU/EES@EES, Chris Hendrix/HOU/EES@EES, Malcolm 
Adkins/HOU/EES@EES, Mojgan Ahad/Western Region/The Bentley Company@Exchange, 
Dan Bergmann/SFO/EES@EES, Chauntel Cannon/Western Region/The Bentley 
Company@Exchange, Shawn Grant/Western Region/The Bentley Company@Exchange, 
Deborah O'Jones/Western Region/The Bentley Company@Exchange, Geoff 
Pollard/Western Region/The Bentley Company@Exchange, Stephan Rank/Western 
Region/The Bentley Company@Exchange, Scott Sullivan/Western Region/The 
Bentley Company@Exchange, Pat van Otterdyk/SFO/EES@EES, Steve 
Walker/SFO/EES@EES, Paul Smith/HOU/EES@EES, Dennis Benevides/HOU/EES@EES, 
Dirk vanUlden/Western Region/The Bentley Company@Exchange, Chris H 
Foster/HOU/ECT@ECT, John Malowney/HOU/ECT@ECT, Andrew Wu/HOU/EES@EES
		 cc: Mona L Petrochko/SFO/EES@EES, Sandra McCubbin/SFO/EES@EES, Jeff 
Dasovich/NA/Enron@Enron, Paul Kaufman/PDX/ECT@ECT, James D 
Steffes/NA/Enron@Enron, Harry Kingerski/NA/Enron@Enron
		 Subject: Update on CA PUC Action on Interruptible Contracts

SUMMARY OF CPUC ACTION:  The CPUC has instituted an investigation of current 
interruptible and demand side programs.  Our CA attorneys prepared a summary 
of the CPUC action, which is provided below.

ENRON ACTIONS:  Most of the calls we've received from EES have concerned the 
CPUC's proposed requirement that retail customers be forced to retain their 
interruptible contracts for their full five-year terms.  We have learned that 
Enron has customers or potential customers on both sides of this issue -- we 
have customers who want to get out of the contracts and customers who want to 
stay on the programs.  After discussion with Doug Condon and others, we have 
decided to stand on the sidelines and not take a position on that issue.  
Please feel free to call one of us with comments or questions. Sue Mara (415) 
782-7802, Jeff Dasovich -7822, Mona Petrochko -7821.

PREPARED SUMMARY:  Here is a preview of the Commission's latest actions
in response to the "crisis" in the California electric market.

In short, the Commission has instituted an Investigation into operation of
the interruptible load programs of the three UDCs, and the effect of these
programs on energy prices, other demand responsiveness programs, and the
reliability of the electric system.

The item which has gotten the most "press" from the OII so far is the
proposed temporary suspension of the tariff provisions of the three UDCs
that allow customers to opt out of their interruptible program contracts
during the 30 day window commencing November 1st.  The Commission is using
its authority under PUC Section 743 ( which gives the Commission specific
authority to amend interruptible contracts between the UDCs and qualified
heavy industrials) to propose such suspension.  Although parties are allowed
to comment on the suspension by this Thursday (the 12th), the Commission
does have the apparent authority to effect the change and it will most
likely  proceed with the suspension.

Apart from the enforced extension of the interruptible contracts, however,
the OII potentially could have broader ramifications.  The intent of the OII
is to examine all interruptible, curtailable, and demand responsiveness
programs being currently offered and/or  proposed in California, and to
determine how these programs can best be structured and/or reformulated to
serve the Commission's goal of ensuring reliable and reasonably priced
electric service within California (especially for the summer of 2001).  It
is hard to tell exactly what the Commission has in mind.  However, it is
possible that such reformulation of curtailable/demand responsiveness
programs could interfere with Enron's ability to make interruptible/ demand
responsive deals with customers.

Moreover, the OII is not merely looking at larger customers. It states as
one of the purposes of the rulemaking the identification of if and how
smaller customers can participate in curtailable programs.  Specifically,
the OII states that "we need to examine the ability of smaller customers to
participate; the development of rate design and incentive polices of such
participation; a cost/benefit analysis of such programs; and the marketing
of any such programs."