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Enron Mail |
David:
Count on us as signatories (Carl, John, and I), however there is a need to correct two factual errors. These corrections do not change the sense of any of the discussions or our suggested remedies, but are important for our credibility. First, the utilities were not required to sell or divest their plants. The Commission and the Legislature lacked the authority to do so, however, the divestitures were encouraged in the strongest possible terms. Therefore, at page 2 , third line in the last paragraph, we need to change the word "required" to "strongly encouraged." Likewise, on page 4, the third sentence of the second paragraph under the section heading needs to be slightly modified to read as follows: "First, California required utilities to purchase nearly all their electricity on a volatile spot basis after they divested a substantial portion of their generation...." Finally, on page 5, the third sentence should be modified as follows: "These divestitures, encouraged and sanctioned by the CPUC, ...." Second, also on page 5, the second sentence inaccurately conveys that utilities had the authority and option to pursue "backstop" fixed price contracts from their divested plants. In fact, they were precluded from doing so under the rules. Furthermore, the utilities have only divested their fossil plants, while retaining both hydro and nuclear facilities. These facilities represent substantial generation assets, especially for SCE and PG&E. Accordingly, we suggest the following minor modifications: "Unfortunately, the utilities have already divested (strikethrough: most of their) generation plants without being allowed to secure contracts that would...." We also note that the document has not referenced the substantial new generation capacity that has been approved and scheduled for completion within the next two years. If completed (and assuming interim solutions don't undermine the investment incentives in the meantime), these additions would add over 6,000 MW of critically needed generation capacity. The document should include some reference to this point. Accordingly, we suggest the following modification on page 6, the last sentence in full paragraph 4: "Only then should we seek contracts to help stabilize prices for the two-or three-year transition until more permanent solutions can be put in place, especially as new power plants already approved (totalling some 6,000 MW ) come on line within the next two years. Lastly, we noted a few typos. On page 5, first line of the second paragraph under the heading has a dash after "short" which appears unintended. On page 7, sixth sentence of the second paragraph, "Californians' " shouldn't have an apostrophe. Finally, in the paragraph that follows on page 7, we use the term "UDC" for the first time without explanation. We suggest saying "utilities" instead. Let me know if you have any questions. Thanks for the great work! Mitch
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