Red Herring Article ,
 Hap -- could you provide a response and get it to Meredith.  I'd like to 
correct this.
----- Forwarded by Steven J Kean/NA/Enron on 03/18/2001 07:54 PM -----

	Joannie Williamson
	03/16/2001 09:20 AM
		 
		 To: Steven J Kean/NA/Enron@Enron
		 cc: 
		 Subject: Red Herring Article

Thought you would like to see.

Joannie

---------------------- Forwarded by Joannie Williamson/Corp/Enron on 
03/16/2001 09:18 AM ---------------------------
From: Chris Hilgert@ECT on 03/16/2001 08:43 AM
To: Jeff Skilling/Corp/Enron@ENRON
cc:  

Subject: Red Herring Article


Jeff,

I was recently skimming the Enron news articles on Yahoo Finance and saw this 
one published in Red Herring about the sad demise of the renewable energy 
business in California:

http://www.redherring.com/index.asp?layout=story&doc_id=1040018104&channel=100
00001

I thought the article was reasonable until I got to a certain part about the 
impact that recent high prices have had on these companies and Enron was 
mentioned in a rather improper light, in my opinion.  Below is a short 
excerpt from the article with a particular sentence highlighted concerning 
Enron:

"Proponents of renewable power viewed California's deregulation as flawed 
from the onset three years ago. Still, they anticipated that with adequate 
publicity millions of consumers could be persuaded to switch from the 
traditional power supply, which comes mainly from the more polluting fossil 
fuels and nuclear power, and that the demand would spur supply. The number of 
producers and retailers getting into the green market would then only grow -- 
as long as the big utilities didn't interfere.

That's what almost happened. Over the last three years, retailers like Green 
Mountain Energy and Utility.com bought green power already available in 
California and started to invest in building their own renewable energy 
generators, like windmill farms and large solar-panel assemblies. Still, for 
all the optimism and effort, only about 200,000 customers -- less than 1 
percent of the 8.5 million households that had the option of switching 
providers -- chose to support them. Many of those were swayed by a 
deregulation-mandated credit of 1.5 cents per kilowatt hour for consumers who 
switched. When natural gas prices were high, the credit actually represented 
a real savings. Historically, environmentally conscious consumers have paid a 
penny or two more per kilowatt hour for renewable energy, along with an 
average monthly surcharge of $5.

Then, last fall, the fledgling industry started to crumble. Energy 
wholesalers like Enron (NYSE: ENE) and Calpine (NYSE: CPN) responded to a 
rising demand for energy by raising their prices from 6 cents per kilowatt 
hour to as much as $1.50. Green retailers had trouble getting credit to buy 
power. Many chose to drop out of the market rather than have to charge a 
price that was less than their cost. When the energy crisis hit, many green 
consumers' bills more than doubled."

In light of the recent e-mail that was sent out, I thought that I would bring 
this to your attention as it may warrant a response to bring clarity that 
Enron does not raise prices, it transacts in a market where prices are set by 
supply and demand.  The average person reading this could very easily come to 
the conclusion that Calpine and Enron broke the back of the renewable energy 
companies, which is clearly not the case.  Nonetheless, thought you might 
find this of interest.

Chris Hilgert
Enron Americas
Enron Compression Services
hap.boyd@enron.com, karen.denne@enron.com, meredith.philipp@enron.com