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Enron Mail |
If we are still open to changes I would suggest adding a sentence (in
brackets below) to the paragraph about retail competition that supports a reasonable proposal by the ISO market survailence committee. We all hope that the market will do it anyway but in a disfunctional market certain things need to be mandated. ".....Second, California should not abandon its goal of fostering retail competition. New competitors need the ample, stable and reliable electricity supplies that a reformed market system will promote. Retail competition can help bring new types of contracts and metering systems, and better awareness of environmental effects as entrants introduce "green" packages, and demand-side innovations. This is another reason why consumers must pay the real cost of electricity, as retail competition cannot thrive in an environment in which supply companies lack retail pricing freedom. As a consequence, companies involved in retail supply, including the California utilities, should be allowed to pass-through their energy costs in a competitive environment. [At the same time retail customers should be guaranteed the option of locking in a fixed fair price by the default supplier and not be exposed to market volatility should they choose to do so.] Finally, oversight of the electricity business will always be needed. The cornerstones of electricity regulation must be oversight of the distribution function, and ensuring that any anticompetitive behavior by suppliers is circumscribed. " ----- Original Message ----- From: "Philip K. Verleger" <PVerleger@compuserve.com< To: "James L. Sweeney" <jim.sweeney@stanford.edu< Cc: "David Teece" <teece@haas.berkeley.edu<; "Robert Michaels" <rmichaels@fullerton.edu<; <steven@stoft.com<; <mcfadden@econ.berkeley.edu<; <joseph.mullinix@ucop.edu<; <pjoskow@mit.edu<; <rschmidt@lecg.com<; <richard.rumelt@anderson.ucla.edu<; <borenste@haas.berkeley.edu<; <william_hogan@harvard.edu<; <lfried@uclink.berkeley.edu<; <jdasovic@enron.com<; <john_chandley@lecg.com<; <berk@haas.berkeley.edu<; <phillip_mcleod@lecg.com<; <mwilk@wilkandassociates.com<; <spiller@haas.berkeley.edu<; <jscadding@wilkandassociates.com<; <scott_harvey@lecg.com<; <yellen@haas.berkeley.edu<; <gilbert@econ.berkeley.edu<; <cdanner@wilkandassociates.com<; <george_barker@lecg.com<; <willrichm@aol.com<; <shmuel@euler.me.berkeley.edu<; <tom_campbell@law.stanford.edu<; <tyson@haas.berkeley.edu<; <pverleger@compuserve.com< Sent: Friday, January 26, 2001 7:36 AM Subject: Re: FINAL VERSION (Revised) < David: < < Jim's comments are on point. We really do not know whether the current < increase is due entirely to the workings of a workably competitive market. < Some of the participants believe it is, some believe it is not, and others < like myself are really not sure. Similar, but smaller price increases have < been observed in other commodity markets which were later found to be < "workably competitive." For example, there has been no showing that the < doubling of heating oil prices last year in the east resulted from < anything other than the normal working of supply and demand. However, < there have been other instances of smaller price increases where it has < been shown that the markets were not "workably competitive." Until we have < more actual market data we really cannot - and should not be so bold. < < While I have strongly urged you to resist making large numbers of changes I < think Jim's advice should be included if you have time. < < Phil < <
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