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Enron Mail |
---------------------- Forwarded by Robert Badeer/HOU/ECT on 06/14/2000 02:14
PM --------------------------- From: Greg Wolfe on 06/08/2000 03:48 PM To: Chris H Foster/HOU/ECT@ECT, Tim Belden/HOU/ECT@ECT, Robert Badeer/HOU/ECT@ECT, Jeff Richter/HOU/ECT@ECT cc: Subject: *DJ Calif. PUC Approves Utilities Buying Pwr Out Of CalPX ---------------------- Forwarded by Greg Wolfe/HOU/ECT on 06/08/2000 05:52 PM --------------------------- Enron Capital & Trade Resources Corp. From: "Pergher, Gunther" <Gunther.Pergher@dowjones.com< 06/08/2000 01:10 PM To: "Pergher, Gunther" <Gunther.Pergher@dowjones.com< cc: (bcc: Greg Wolfe/HOU/ECT) Subject: *DJ Calif. PUC Approves Utilities Buying Pwr Out Of CalPX 17:46 GMT 8 June 2000 *DJ Calif. PUC Approves Utilities Buying Pwr Out Of CalPX Mandatory Buy Requirement Ends For Utilities LOS ANGELES (Dow Jones)--The California Public Utilities Commission approved a controversial plan Thursday morning that will allow the state's three investor-owned utilities to buy power outside the Caliifornia Power Exchange market structure. The commission voted 3 to 2 in favor of the measure. Commissioners Henry Duque, Richard A. Bilas and Josiah Neeper voted in favor of the draft order. The decision relieves the three investor-owned utilities, Sempra Energy unit San Diego Gas & Electric (SRE), Pacific Gas & Electric (PCG) and Edison International unit Southern California Edison (EIX), from their mandatory buy requirement that became effective in March 1998 when the state moved to a deregulated competitive market. Originally the mandatory buy requirement was set to end in 2002, when all three utilities recovered their stranded costs. "This decision is not as earth shattering as it sounds," Commissioner Bilas, one of the author's of the draft order, said at Thursday's meeting. "I am not criticizing the power exchange. But this will result in lower prices patched through to bundled customers." Trading platforms likw Automated Power Exchange and the New York Mercantile Exchange can now compete directly with the CalPX, which currently controls 85% of the state's wholesale power market. The utilities can buy power from other "qualified exchanges" through an advice letter process. Utilities Can Trade With Other Exchanges Now California's big three utilities can buy power outside the CalPX market structure immediately, through an advice letter process, which means the utilities have to notify the commission of their intent to trade power with qualified exchanges such as APX, Nymex or Bloomberg. The commission said the exchanges have to offer the same services as the CalPX - forward, daily and monthly trading, and anonymity to prevent self dealing between the buy side and sell side - in order to meet the criteria for a qualified exchange. Exchanges would also have to be independently owned from the utilities. Enron Online would not meet the criteria for a qualified exchange, commissioners said. The advice letter only needs to be filed once and s merely a formality that would not need to be approved by a majority of the commission. Mark Huffman, PG&E senior attorney for regulatory affairs, told Dow Jones Newswires that his company "will quickly start looking at other exchanges and see what's out there. We're going to start the advice letter process." SoCal Edison and SDG&E said they will do the same. Ed Cazalet, chairman and founder of APX, said Thursday's controversial three-to-two vote in favor of the draft order "creates a tremendous opportunity for APX." "It allows us to bring the benefits of Silicon Valley technology to California," Cazalet said. "This is really about bringing e-commerce to the market." E. Jesus Arredondo, however, disagreed, saying "selling into our market doesn't cost anything and selling into the APX market costs 20 cents per megawatt-hour." Commissioner said having other exchanges will not only result in lower electricity prices, but it will allow the buyer and seller the chance to see prices before making the purchase. CalPX's block forward prices are not immediately published, Commissioner Bilas said. Reacting to the ruling, CalPX Chief Executive Officer George Sladoje said "Today's split vote by the CPUC in favor of accelerating the introduction of other qualified exchanges is not well-reasoned and it may in the end prove counterproductive." -By Jason Leopold; Dow Jones Newswires (323) 658-3874; jason.leopold@dowjones.com Copyright © 2000, Dow Jones & Company Inc G_nther A. Pergher Senior Analyst Dow Jones & Company Inc. Tel. 609.520.7067 Fax. 609.452.3531 The information transmitted is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this in error, please contact the sender and delete the material from any computer. <<Gunther Pergher (E-mail).vcf<< - Gunther Pergher (E-mail).vcf
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