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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Jeff Dasovich X-To: James D Steffes, Richard Shapiro X-cc: X-bcc: X-Folder: \Jeff_Dasovich_June2001\Notes Folders\All documents X-Origin: DASOVICH-J X-FileName: jdasovic.nsf This is real helpful. ----- Forwarded by Jeff Dasovich/NA/Enron on 05/07/2001 06:44 PM ----- "Ronald Carroll" <rcarroll@bracepatt.com< 05/07/2001 12:16 PM To: <mmilner@coral-energy.com<, <rreilley@coral-energy.com<, <ray.alvarez@ei.enron.com<, <acomnes@enron.com<, <cyoder@enron.com<, <dfulton@enron.com<, <jdasovic@enron.com<, <jsteffe@enron.com<, <linda.robertson@enron.com<, <rshapiro@enron.com<, <smara@enron.com<, <snovose@enron.com<, <steve.c.hall@enron.com<, <gackerman@wptf.org< cc: Subject: Fwd: Murkowski Challenges Capitalists To Cap Runaway Power Prices In CA ----- Message from "Tracey Bradley" <tbradley@bracepatt.com< on Mon, 07 May 2001 10:49:32 -0500 ----- To: "Justin Long" <jlong@bracepatt.com< cc: "Aryeh Fishman" <afishman@bracepatt.com<, "Andrea Settanni" <asettanni@bracepatt.com<, "Charles Ingebretson" <cingebretson@bracepatt.com<, "Charles Shoneman" <cshoneman@bracepatt.com<, "Deanna King" <dking@bracepatt.com<, "Dan Watkiss" <dwatkiss@bracepatt.com<, "Gene Godley" <ggodley@bracepatt.com<, "Kimberly Curry" <kcurry@bracepatt.com<, "Michael Pate" <mpate@bracepatt.com<, "Paul Fox" <pfox@bracepatt.com<, "Ronald Carroll" <rcarroll@bracepatt.com< Subject: Murkowski Challenges Capitalists To Cap Runaway Power Prices In CA FYI Murkowski Challenges Capitalists To Cap Runaway Power Prices In CA In what some observers believe could be a watershed change in rhetoric, Senate energy policy leader Frank Murkowski (R-AK) is berating the capital community for not coming forward and detailing what kind of ceiling on wholesale power prices it would take to insure adequate generation -- but head off continued economic damage to the state of California. The criticism signals that the chairman of the Senate Energy and Natural Resources Committee has grown impatient with the hail of philosophical charges and counter-charges that have followed FERC's April 26 order on the California market and is turning elsewhere than FERC for a solution. Sources also say it may be a signal that there is a majority on his committee that would support some kind of legislative control on the wholesale power market in the West. "I am issuing an admonition to the financial community," Murkowski said at the conclusion of a hearing on the recent FERC order. "If the financial community will come in and say what terms and conditions they will need to bring new generation into the state, we can cut through this chatter." Among other provisions, the FERC order institutes a plan for price controls during Stage 1 and higher power emergencies. Lawmakers at the hearing, especially from California and the West, criticized the action as insufficient to prevent price gouging. FERC Chairman Curt Hebert said the limited nature of the price controls will continue to provide the power industry with incentives to build power plants in California. Murkowski called on financial interests attending the hearing to settle the debate. "Tells us what you will or will not do under a price cap," said Murkowski. Murkowski indicated that the answer to his question should come directly from top figures in the financial community. Murkowski also signaled that Congress may step in and take legislative action on the California crisis. "We have to question the adequacy of the order and introduce legislation to address problems if necessary," Murkowski said. The sentiment was echoed by other members of the Committee. "We cannot allow our government to sit idly by and allow a tragically flawed and easily manipulated power market wreak havoc on our economy," Sen. Maria Cantwell told Hebert. "If you're not going to take action, Congress is going to act." All three FERC commissioners testified at the hearing but it was Chairman Curt Hebert who was on the receiving end of most of the criticism. "FERC has done a wonderful imitation of a potted plant," Sen. Byron Dorgan (D-ND) told Hebert. "Regulation is not a four letter word. The market system sometimes gets out of wack. Commissioner William Massey also criticized FERC's order, and acted as counterpoint to Hebert throughout the hearing. Commissioner Linda Breathitt defended her support of the April 26 order. "One thing is clear, you all don't get along very well," observed Dorgan. "I'm amazed at what's been done," said Murkowski in defending FERC's action over the past several weeks. "It's better than nothing." "I've been disappointed," replied Dorgan. "I hope FERC decides it's a regulatory body and steps up and takes some action." Sen. Feinstein suggested to Hebert that FERC take a closer look at the impact of skyrocketing natural gas prices on the exorbitant increase in electricity prices in California. In response, Hebert announced that FERC was holding a technical conference May 24 on current and projected natural gas pipelines into California. "I agree that this is a natural gas situation and we intend to look into this as well," Hebert said. Source: EnergyWashington.com Date: May 4, 2001 , Inside Washington Publishers
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