RE: Draft comments on FERC's proposal to reimpose price caps on ,
 Leslie et al.

Joe Hartsoe asked me to review this.  Please include me on future  
distributions re: CA gas issues.

My suggestion is to weave in some "facts" on why prices are where they are. 
The easiest and most defensible way to do this would be to insert quotes from 
the CEC's recent analysis.  Although the CEC is certainly not beyond 
reproach, it generally has been pretty evenkeeled on fuels matters.  CEC  
states that fundamentals--i.e., high EG demand (due to demand growth and 
reduced hydro), and a lack of take away capacity--is the cause of high prices 
and (by implication) NOT due to capacity release.  They also make statements 
that these fundamentals are working themselves out: increased drilling, new 
interstate capacity, and (assuming CPUC support) increased intrastate 
capacity.

The attached file includes some salient quotes and page references.  The CEC 
report is available at www.energy.ca.gov/publications.

Even if you do not use for this filing, the excerpts should help for any 
other materials we are putting together.

Alan Comnes



 -----Original Message-----
From:  Alvarez, Ray  
Sent: Wednesday, May 30, 2001 12:08 PM
To: Comnes, Alan
Subject: Draft comments on FERC's proposal to reimpose price caps on capacity 
release transactions

FYI
---------------------- Forwarded by Ray Alvarez/NA/Enron on 05/30/2001 03:07 
PM ---------------------------
From: Leslie Lawner on 05/30/2001 01:52 PM CDT
To: James D Steffes/NA/Enron@Enron, Jennifer Thome/NA/Enron@Enron, Rebecca W 
Cantrell/HOU/ECT@ECT, Donna Fulton/Corp/Enron@ENRON, Joe 
Hartsoe/Corp/Enron@ENRON, Ray Alvarez/NA/Enron@ENRON, Christi L 
Nicolay/HOU/ECT@ECT, Paul Kaufman/Enron@EnronXGate, Jeff 
Dasovich/NA/Enron@Enron, Susan J Mara/NA/Enron@ENRON, Sandra 
McCubbin/NA/Enron@Enron
cc: Jane M Tholt/Enron@EnronXGate, Harry Kingerski/NA/Enron@Enron, Gloria 
Ogenyi/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 

Subject: Draft comments on FERC's proposal to reimpose price caps on capacity 
release transactions

Comments are due by 6/11 on the FERC order proposing to reimpose price caps 
on short term capacity releases into the CA markets.  This is in response to 
the complaints filed by SDG&E and LADWP to deal with the high gas prices in 
CA and both parties requested this relief.  The attached first draft is the 
ENA/EES response to the FERC request for comments.  Please review and return 
comments, etc. to me and Becky so we can coordinate the changes.  And please 
forward to anyone I may have left out who should have been included above.

    << File: pricecapcomments.doc >>
ray.alvarez@enron.com, james.steffes@enron.com, paul.kaufman@enron.com, 