Re: Analysis by Academics----Why De-regulation is the right policy ,
 Great points.  Teece---and the lion's share of the folks on the participants 
list---are advocates of a minimalist role for government, particularly where 
markets are a clear and preferably option, as in the case of electricity.  

That said, I think we're going to have to make a fundamental decision about 
what the goal of this "study" would be, which will determine, to a large 
degree, whether we choose to pursue it.  

I'll throw out for comment the notion that the study should be designed to 
serve one purpose:  to influence the policy decision currently under debate 
"To de-regulate or not."  As such, I wouldn't see issues like "PJM or APX" or 
"competitive default supplier or not," or "divest generation with vesting 
contracts or retain the assets" being the focus.  

That debate over critically important implementation details, would seem to 
come in "Round 2," once the initial debate over "deregulate or not" is won.  
To try to do both, i.e., resolve in the broad policy issue AND make the case 
for the specific, "right" implementation plan, would arguably bog the study 
down, perhaps interminably.  And it seems that time is of the essence in the 
current environment.  In addition, unless the fundamental policy issue is 
won--and won rather quickly--debating  implementation may be moot.  Of 
course, it will be impossible to avoid some level of dicussion on "how to do 
it," but that would not be the emphasis.

In sum, I'd suggest for comment that it only makes sense to 
proceed---particularly since time is of the essence---if we focus on the high 
level policy level question of "to deregulate or not," and address 
implementation in a second, or follow up, study.  I think we should try to 
make a call on this swiftly, since the "go/no go" decision would seem to flow 
from resolution of this issue.

Best,
Jeff



	James D Steffes
	03/16/2001 08:22 AM
		
		 To: Jeff Dasovich/NA/Enron@Enron
		 cc: Jeff Dasovich/NA/Enron@Enron, Joe Hartsoe/Corp/Enron@Enron, Linda 
Robertson/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, skean@enron.com
		 Subject: Re: Analysis by Academics----Why De-regulation is the right policy 
choice  

Jeff --

It would be helpful to get some feedback prior to starting to deal with the 
fundamental question related to direct access for smaller customers.  I would 
like to know Teece's perspective on the role of government in this 
marketplace.  In addition, I think that the paper must deal with the 
drawbacks of having mixed roles - utility default supply and competitive 
markets.

Jim




	Jeff Dasovich
	Sent by: Jeff Dasovich
	03/15/2001 03:11 PM
		 
		 To: Richard Shapiro/NA/Enron@Enron, skean@enron.com, James D 
Steffes/NA/Enron@Enron, Joe Hartsoe/Corp/Enron@ENRON, Linda 
Robertson/NA/Enron@ENRON
		 cc: 
		 Subject: Analysis by Academics----Why De-regulation is the right policy 
choice  

Greetings:

As I've mentioned, I've been discussing with a group of academics 
(principally from UC Berkeley) the possibility of producing an analysis of 
why it makes sense to move forward toward de-regulation, and makes no sense 
to turn back to command-and-control regulation.  Clearly, we're at a fork in 
the policy road---move forward, or go back.  

I've (finally) gotten a proposal from the group.  It's attached.  Please take 
a look.  I'd like to distribute more widely internally for comment, but 
wanted to run it through a preliminary screen to guage whether folks think it 
would be useful before cluttering up folks' in-boxes with more emails to 
read.  Few points worth mentioning:

The majority of the academics that would do the report are affiliated with 
LECG, Inc., the consulting group that I worked with prior to joing Enron.  
List also includes Dan McFadden, UC Berkeley nobel prize winner who wrote the 
recent op-ed piece in the WSJ.
The list also includes Hogan and Joskow  and Borenstein.  We could certainly 
exclude these folks should we choose to go forward with the analysis.  
However, the goal is to produce a high level analysis, i.e., "de-regulation 
is good and can work; command and control regulation is bad and we know that 
it does not work."  Once the study is released (if it is pursued), the 
"authors" could tour the country, testifying before federal and state bodies 
to advocate the virtues of de-regulation and the pitfalls of reversing 
course.  The analysis would not be a debate over "To Poolco, or not to 
Poolco, PJM, etc."  In this way, including folks like Joskow and Hogan could 
offer the added benefit of creating a "Nixon goes to China" scenario.  Please 
take a look at the list of participants.  Again, we can add to and subtract 
from the list.
Laura Tyson would be one of the two project leaders. (The other would be 
David Teece, Chairman of LECG.)
None of the folks on the list occupies either extreme of the political 
spectrum.  It's a mix of D's and R's who are arguably centrist economist and 
strong believers in markets (I won't vouch for Joskow and Hogan).
The idea would be to get a wide array of industry participants from across 
the country to support the project.  This is for two reasons:  1) the more 
diverse the group supporting the effort, the greater the credibility, and 2) 
they are asking for about $1 million to do the study.
If you think it would be useful to pursue the study as part of our national 
campaign to minimize the damage created by California, I would like to start 
immediately to approach trade associations, companies, customers, etc. 
nationwide to garner support for the project.

Let me know if you think the effort would be worthwhile.  Appreciate your 
comments.

Best,
Jeff
----- Forwarded by Jeff Dasovich/NA/Enron on 03/15/2001 02:43 PM -----

 - REAFFIRMING THE CASE FOR ELECTRICITY DEREGULATION.doc
james.steffes@enron.com