UPDATED Dow Jones Index information ,
 let's talk about these notes prior to your drafting.  please give me a call.  
----- Forwarded by Jeff Dasovich/NA/Enron on 01/24/2001 11:26 AM -----

	Tamara Johnson@EES
	01/24/2001 11:11 AM
		 
		 To: Harry Kingerski/NA/Enron@Enron, Jeff Dasovich/NA/Enron@Enron, JMB 
<JBennett@GMSSR.com> @ ENRON
		 cc: Neil Bresnan/HOU/EES@EES, Jubran Whalan/HOU/EES@EES, Marc 
Ulrich/HOU/EES@EES
		 Subject: UPDATED Dow Jones Index information


---------------------- Forwarded by Tamara Johnson/HOU/EES on 01/24/2001 
11:02 AM ---------------------------


Tamara Johnson
01/24/2001 11:10 AM
To: Harry Kingerski/NA/Enron@Enron, Jeff Dasovich/NA/Enron@Enron, JMB 
<JBennett@GMSSR.com> @ ENRON
cc: Neil Bresnan/HOU/EES@EES, Jubran Whalan/HOU/EES@EES, Marc 
Ulrich/HOU/EES@EES 
Subject: Dow Jones Index information

Additions from Jubran...

Proposed pricing mechanism:

Dow Jones Electricity Indexes, specifically their NP15/SP15 indexes.
- the indexes are based on weighted average prices and total volumes
- they measure "bilateral one-day prescheduled, financially firm transactions"
=> therefore the Dow Jones Index more accurately reflects market pricing
- Dow Jones has the right to randomly audit the data providers

why not the ex-post ISO?
- generators are not selling to California's ISO because of the $150/MWh 
price cap,
=> therefore prices coming out of the ISO do not reflect real market prices
- there are purchases above the $150 soft cap, but the pricing of the out of 
market transactions is explained to FERC only, this information is not in the 
public domain
- if generators are not selling into the market, there is no liquidity, 
therefore prices are not reflective of the prices that buyers must pay
- and generators may not be selling into the market due to the credit exposure

why not use the ex-post ISO price on an interim basis?
- because putting a false cap on the market price will result in price 
increases to DA customers, contrary to AB1890, without due process
- Decision 99-06-058 set the foundation for the PX credit to reflect real 
market prices, PG&E's proposal does not adhere to this.
mday@gmssr.com, jbennett@gmssr.com