The Center for the Advancement of Energy Markets (CAEM) has just issued the
2nd edition of the Retail Energy Deregulation Index 2001 (RED Index).  Due
to the California Crisis, the RED Index has recently been featured on CNN,
Time Magazine, NPR, and USA Today.

The latest version of the RED Index, first issued in February 2000 by CAEM,
showed three states-Pennsylvania, New York and Maine-with scores of 60 or
more out of 100. The states had scores of 66, 64 and 62, respectively.

The report said six states and the District of Columbia made significant
progress by scoring increases of more than 25 points between Jan. 1, 2000
and Jan. 1, 2001: Maryland (49-point increase), the District of Columbia
(47), Illinois (34), Texas (33), Ohio (33), Michigan (26) and Virginia (26).

The RED Index report also showed that:
* From 1999 to 2000, the RED Index National Score, the average of the scores
of the 50 states plus the District of Columbia, increased from 11 to 17.
* The median score was 6 and the mode (the score achieved by the greatest
number of states) was zero, indicating that the high scores of a limited
number of states skewed the national average.
* Pennsylvania, the state with the best RED Index scores from 1997 to 2000,
also had a significant decrease in electricity cost (revenue per kilowatt
hour)-17 percent. California, despite recent developments, also had a
decrease of almost 24 percent for the three-year period.

The Center for the Advancement of Energy Markets (CAEM) is an independent,
nonprofit think tank specializing in the impact of competition and
technology on transforming energy markets.
.
The response to the 1st edition of the RED Index from both the public and
private sector has far exceeded our expectation for a first-time study by
the new kid on the block.  The Governor of Pennsylvania and the New York
Public Service Commission issued press releases touting its ranking in the
RED Index and the Vermont Department on Public Utilities requested
permission to distribute the RED Index in its retail competition docket
(Docket 6330) as a straw man of the key attributes for retail restructuring.
The Secretary of Revenue of Pennsylvania cited us in his report on the
impact of electric restructuring on Pennsylvania's economy. The Alabama
Attorney General asked CAEM to testify on his behalf before the Alabama PSC
using the RED Index methodology.  The World Bank called it "the most
sophisticated scorecard for measuring power sector reform."

The following are several of the companies that purchased last year's index:
BG&E, Duke, PSE&G Energy Services, Enron, Allegheny Power, Dynegy,
Pricewaterhouse Coopers, DLJ, Constellation, Deutsche Banc, ConEd, NRECA,
Excelergy, Green Mountain, FPL, GPU, Marubeni Power International, McKinsey,
Niagara Mohawk, PECO, PG&E, Shell, Anderson Consulting, and SoCal Edison, to
name a few of the more recognizable names.

CAEM provides the RED Index at no fee to 1,600 government policy
organizations, including public utility commissions and state legislatures,
and nonprofit, public-interest organizations. CAEM funds the study by
charging a modest fee to private sector organizations.

The report also lists the following CAEM awards, as well as others:
* The CAEM RED Carpet Award goes to the person, organization or event that
most furthers the cause of an effective transition from the monopoly model
to the choice model.  The CAEM RED Carpet Award for 2000 goes to the State
of Pennsylvania.
* The CAEM RED China Award goes to the person, organization or event that
expresses the least confidence in market forces. The CAEM RED China Award
goes to Governor Gray Davis of California.

RED Index 2001 is a 200-page study that measures the progress states have
made in moving from the monopoly model of public utility regulation to the
competitive model. A RED Index score of 0 represents the monopoly model and
a score of 100 represents complete and effective implementation of the
competitive model. The index focuses on retail competition and currently
only covers electric restructuring, and will be updated once a year in July.

CAEM developed the RED Index by identifying 22 key attributes that are the
foundation for an effective transition to competition. These attributes were
weighted and scores were assigned to the different options that states have
regarding that attribute. CAEM then conducted research to determine the
option chosen by each state on each of the 22 attributes.  Over 45 state
commissions assisted CAEM by commenting on our characterizations of their
policies. The index scores were then calculated based on the methodology and
research.

Changes from last year's report include
* A new methodology developed in conjunction with an 11 member advisory
committee representing all sectors interested in restructuring;
* Expansion to 22 attributes and refinement of many commission options;
* RED Index scores extended to 1997 and 1998 to develop a four year
perspective
* Includes State Profiles on customer and retail market demographics
* More analysis of key events and impact of energy restructuring-California
and business practices

A RED Index for electric restructuring in Canada will be issued in March, an
update for both the US and Canada will be issued in July, and a natural gas
version for both Canada and the US will be issued in July.  The Annual
Project Fee includes all reports.

Private sector organizations can order a copy from redindex@caem.org
<mailto:redindex@caem.org> through the CAEM website at www.caem.org.

If you have any questions please contact Nancy Etkin, Project Director of
the RED Index, at netkin@caem.org <mailto:netkin@caem.org> or by calling
703-532-6887.

If you do not wish to receive information from CAEM, please reply and put
"remove" in the subject line.


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