price caps forwarded vladimir gorny hou ect 11 01 2000 03 39 pm tim belden 10 27 2000 05 40 pm john j lavorato corp enron dave delainey mike swerzbin hou ect ect robert badeer hou ect ect sean crandall pdx ect ect tim belden hou ect ect jeff richter hou ect ect diana scholtes hou ect ect tom alonso pdx ect ect mark fischer pdx ect ect john forney hou ect ect paul choi sf ect ect john malowney hou ect ect holli krebs hou ect ect greg wolfe hou ect ect chris h foster hou ect ect stewart rosman hou ect ect kim ward hou ect ect debra davidson pdx ect ect tim belden hou ect ect lester rawson pdx ect ect john zufferli cal ect ect james steffes na enron enron mary hain hou ect ect christopher f calger pdx ect ect dave parquet phillip k allen hou ect ect vladimir gorny hou ect ect monica lande pdx ect ect elliot mainzer pdx ect ect tim heizenrader pdx ect ect cooper richey stephen swain pdx ect ect susan j mara sfo ees ees steven j kean na enron enron mark palmer corp enron enron cc debra davidson pdx ect ect subject price caps following summarizes recent price cap events california think right anything wrong missing please let know please share attached spreadsheet anyone outside enron regards tim new cap specifics 10 26 2000 iso board passed motion vote 13 10 implement new price cap methodology new methodology become effective 11 3 2000 soon thereafter implemented caiso staff indicated difficult achieve start date yet indicated achievable date might new price cap methodology remain place comprehensive market changes implemented market proven workably competitive variety load conditions either ferc iso board orders removal cap prices based average nymex l 3 settlement average following heat rate table load level heat rate 4 00 gas example cap 40 gw 250 mwh 250 mwh caps rounded nearest 5 mwh increment demand bids demand responsiveness programs exempt caps iso post price caps load level least 48 hours prior beginning calendar month based iso two day ahead system load forecast iso post hourly caps least 24 hours prior hour delivery ferc context ferc delegated cap authority caiso 11 15 2000 iso asserted need ferc authority since bid cap rather sales cap ferc regulates sales purchases electricity therefore regulate sales prices purchase prices iso filed ferc extension price cap authority ferc rule filing 11 18 2000 note 3 days authority expires ferc release proposed order 11 1 2000 based results 206 investigation california wholesale power markets know find propose proposed order 30 day comment period ferc likely issue final order ferc accepting oral comments 11 9 2000 washington enron still determine provide oral comments many companies filed ferc advocating opposing litany price caps cost based rates market redesign recommendations likely price caps approved iso board go effect long remain effect depend whether ferc extends iso price cap authority whether final order stemming current 206 investigation stipulates specific price cap policy impact price caps attached spreadsheet contains table likely maximum monthly prices different gas price levels think highest markets would clear since assumes hour clears cap hard say whether actual prices would clear significantly lower cap know whether sellers offer cap cap assumptions behind analysis detailed bullets take actual historical loads 1999 2000 calculate implied price cap hour using actual historical load new price cap methodology range gas prices divide historical hours peak peak buckets calculate average price month peak hours peak hours example two years worth data months january september month approximately 400 hours january september took approximately 800 observations month 400 year calculated simple average individual observations created peak table peak table table shows calculated implied cap based acutal loads varying gas prices month value represents month would clear hour cleared cap based historic loads given hour could value calculation estimates likely monthly average cap value blue shading indicates caps would given current 10 27 2000 nymex forward prices yellow shading indicates forward power prices excess proposed cap