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Enron Mail |
* from Robert Neustaeder in Govt Affairs
---------------------- Forwarded by Jennifer Rudolph/HOU/EES on 05/03/2001 10:08 AM --------------------------- Robert Neustaedter@ENRON_DEVELOPMENT 04/30/2001 06:02 PM To: Jennifer Rudolph/HOU/EES@EES cc: Subject: California Update Jennifer, Just a bit of an update with regard to California regulatory and legislative issues brought up in the Govt. Affair conference call. Edison transmission sale - Serious problems being encountered with legislation dealing with government purchase of SCE transmission assets. Both democrats and republicans are having problems with the Governor's proposal. Hearings are being held this week on the windfall profit tax bill (SB1X). Of note, Intergen is expected to testify that if the bill is passed it will not go forward with plans to build a power plant within the state. .? Divided FERC Approves Price Mitigation for Spot Market in California. Following more than a nine-hour delay for the Commission meeting this week, the divided FERC voted out a controversial market monitoring and mitigation plan. FERC approved a plan that will establish a single-market clearing price auction for real-time transactions in the Cal-ISO during times of reserve deficiencies in the state. ???????? During Stage I, II, and III emergencies, real-time transactions will be based on a proxy price tied to natural gas prices. ???????? Each generator, through a participating generator agreement, is required to offer all available power and bid its marginal cost based on the generator's heat curve, emission rates, gas costs and emission costs plus $2 for O&M. ???????? Gas cost will be the average daily cost of gas for all delivery points into California. ???????? FERC opened Section 206 investigation to determine whether bulk power prices in West are just/reasonable, but only applies to prices on transactions for 24 hours or less during emergencies. ???????? Cal-ISO must submit RTO proposal by June 1. If it fails to do so, the state will lose its mitigation plan completely ???????? Massey took issue with the offer of price mitigation during emergencies; further criticized the provision on refunds as too narrow; believes FERC should concentrate more on prices for gas, considering the growing use to fuel power generation ???????? The order expires one year from date of issuance. ???????? Enron's read on the order is that price caps won't help the state's problems; they will neither increase supply nor decrease demand. ? 13.? In a related development, the California State Assembly passed a joint resolution urging FERC to place a "cost-based rate cap on natural gas coming into the state over the next 18 months. The resolution goes on to the State Senate where it is expected to pass, and then formally sent to the federal regulators. ? 14.? New RTO Accepted by FERC For Western States. FERC issued an order accepting a new RTO, RTO West, that includes Avista Corporation, Bonneville Power Administration, Idaho Power Company, Montana Power Company, Nevada Power Company, PacifiCorp, Portland General Electric Company, Puget Sound Energy and Sierra Pacific Power. RTO West will operate more than 90% of the high voltage transmission from the Canadian border into southern Nevada.
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