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Enron Mail |
Cc: alan.comnes@enron.com, christi.nicolay@enron.com,
christopher.calger@enron.com, donna.fulton@enron.com, jalexander@gibbs-bruns.com, james.steffes@enron.com, jeff.dasovich@enron.com, leslie.lawner@enron.com, phillip.allen@enron.com, rebecca.cantrell@enron.com, susan.mara@enron.com, tim.belden@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: alan.comnes@enron.com, christi.nicolay@enron.com, christopher.calger@enron.com, donna.fulton@enron.com, jalexander@gibbs-bruns.com, james.steffes@enron.com, jeff.dasovich@enron.com, leslie.lawner@enron.com, phillip.allen@enron.com, rebecca.cantrell@enron.com, susan.mara@enron.com, tim.belden@enron.com X-From: Steve Walton X-To: Ray Alvarez X-cc: Alan Comnes, Christi L Nicolay, Christopher F Calger, Donna Fulton, jalexander@gibbs-bruns.com, James D Steffes, Jeff Dasovich, Leslie Lawner, Phillip K Allen, Rebecca W Cantrell, Susan J Mara, Tim Belden X-bcc: X-Folder: \Jeff_Dasovich_June2001\Notes Folders\All documents X-Origin: DASOVICH-J X-FileName: jdasovic.nsf Ray, Commissioner Hebert may have been more accurate than he supposed in his "Freudian slip". The contingency reserve standard in WSCC is the greater of the largest single contingency or of a quantity equal to the sum of 5% times the load portion served by hydro plus 7% for the load portion served by thermal units. For 1000 MW served half by hydro and half by thermal, the contingency reserve would be 60 MW (500 MW *.05 + 500 MW * .07) for a total of 6%. As a result, Hebert could be right that price mitigation would be in place all the time, although I don't think that was what was intended. Even if you are meeting the WSCC standard pre-contingency in an all thermal system (7% reserve standard), every time a unit trips off line the reserve at that point drops below 7% until more generation comes on line. Did the FERC mean to include this contingency recovery period as "any time the reserve is below 7%?" These are among the problems we are proposing to address in our comments to FERC on the order. Steve Ray Alvarez@ENRON 05/03/2001 05:54 PM To: Steve Walton/HOU/ECT@ECT, Susan J Mara/NA/Enron@ENRON, Alan Comnes/PDX/ECT@ECT, Leslie Lawner/NA/Enron@Enron, Rebecca W Cantrell/HOU/ECT@ECT, Donna Fulton/Corp/Enron@ENRON, Jeff Dasovich/NA/Enron@Enron, Christi L Nicolay/HOU/ECT@ECT, James D Steffes/NA/Enron@Enron, jalexander@gibbs-bruns.com, Phillip K Allen/HOU/ECT@ECT, Tim Belden/HOU/ECT@ECT, Christopher F Calger/PDX/ECT@ECT cc: Subject: House and Senate Energy Hearings Today on California/Western Electric Situation I was at the Senate hearing today on FERC's market Monitoring and Mitigation order, and I would add only a few additional and interesting regulatory-related details to John's fine summary: The hearing was contentious- among the Senators themselves, among the FERC Commissioners themselves, and the interchanges between them. Gas prices were controversial. Commissioner Massey kicked off the discussion on this issue citing a transport basis differential into CA of $10, when it was less than a dollar in other areas. He then noted that the high gas cost would adversely affect the power price under the auction, and that FERC must act regarding the high transport differentials- "We will never get a handle on electric prices unless we get a handle on gas prices". That opened the floodgates of discussion, culminating with the announcement by Commissioner Breathitt of FERC's technical conference (notice of which issued today) on the topic of current and projected interstate pipeline capacity, and adequacy of infrastructure within CA. She said that this would shed light on basis differentials and gas prices. Freudian slip? Chairman Hebert was heard to say by various attendees that price mitigation in the WSCC would apply at all times (in contrast to the order, which proposes mitigation only during times when reserves reach/fall below 7%). Whether he mis-spoke, or not, remains to be seen. Regarding the issue of how often mitigation would be invoked in CA (i.e., Stages 1, 2 or 3): Hebert opined "Most of the time". Breathitt said "Likely 80-85% of the time". Massey was unconvinced. Several Senators railed at the Commission for "not doing its job" and threatened that if the Commission did not act, Congress would act. If you have any questions or need additional detail, please feel free to call. Ray ---------------------- Forwarded by Ray Alvarez/NA/Enron on 05/03/2001 06:09 PM --------------------------- John Shelk 05/03/2001 05:49 PM To: Steven J Kean/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, James D Steffes/NA/Enron@Enron, Mark Palmer/Corp/Enron@ENRON, Linda Robertson/NA/Enron@ENRON cc: Tom Briggs/NA/Enron@Enron, Ray Alvarez/NA/Enron@ENRON, Joe Hartsoe/Corp/Enron@ENRON, Phillip K Allen/HOU/ECT@ECT, Tim Belden/HOU/ECT@ECT, Chris Long/Corp/Enron@ENRON Subject: House and Senate Energy Hearings Today on California/Western Electric Situation I attended both the House and Senate energy committee hearings today. House hearing was in the Barton Subcommittee (Energy & Air Quality). Senate hearing was on last week's FERC order on a "soft price cap" and related issues. The House witnesses were dominated by California officials: Cal Energy Commission, Cal Air Resources Board, Chairman of Gov Davis Generation Implementation Task Force. In addition, there were witnesses from the Western Area Power Admin and Bonneville PA. The Senate witnesses were the three FERC commissioners. HIghlights Chairman Barton said it is still his intention to try to mark up the Barton bill, H.R. 1647 next week (many on and off the Subcommittee doubt this will happen; we are gathering political intelligence on those prospects and will report back with more information and conclusions once that is done); Chairman Barton also said he may go to California next week. There was considerable emphasis at both hearings about the alleged role that higher natural gas prices into California play in the electric power rate increases; several witnesses focused on difference in alleged transportation costs for similar differences between California and non-CA states; FERC at the Senate hearing said that today the commission announced a staff technical conference for later this month on all aspects of the natural gas market as it relates to California; a House member from Southern Illinois coal country attacked California for using only natural gas in its new power plants. The House witnesses, primarily BPA but also the California witnesses, attacked the negawatt provision in sec. 102 of the Barton bill; the criticism was that BPA would be forced to purchase power on the open market at a high price since it is short, sell it to the DSIs under contract; let the DSI sell it at market rates and capture the difference; BPA witness said that thus sec. 102 would make it difficult if not impossible to implement their strategy to avoid as much as a 200 percent rate increase on 10/1/01; BPA testimony will make it tough for Members of Congress from that service region to support sec. 102. Both hearings also touched on how difficult it would be to actually devise a price cap; at the House hearing, none of those advocating a price cap among the witnesses could answer excellent questions about exactly how this could be done; the witnesses just said "cost plus a reasonable profit" and said leave the details to FERC; at afternoon Senate hearing, Chairman Hebert had the staff bring in 15 boxes from one FP&L case to show how a price cap would take too long to bring any relief to California this summer; he said last week's soft price cap is much better. Also on the price cap, Rep. Walden (R-OR) got the Cal Energy Comm chair to admit that if the price caps had been in place earlier, California would NOT have taken the conservation and new generation steps that it has taken recently. The interplay among the FERC commissioners was much more contentious than it was a House hearing on Tuesday, although it could have been worse; when Senate Chairman Murkowski (R-AK) said that "help is on the way" in the form of the nominees for the two vacancies, Sen. Dorgan (D-ND) made a comment that suggested that the confirmation process will not be smooth; the same concern came from the interplay among the Senators, which was also somewhat contentious at times. Please advise if you have any questions or would like further details.
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