Re: Dow

Greetings. The reference is specific to statements that we made when FERC
first issued it's proposed order on Nov. 1 regarding how to fix the mess in
California. We said (and FERC was a little cranky about this) that we were
pulling 300 MWs of power plants that we'd planned to build in California on
the basis of the price cap proposal included in FERC's proposed order. It
was in the press. So it was narrowly confined to the power plant proposals.
Calpine subsequently announced that it, too, would pull the peaking plants it
had planned to developed. I think that they announced the same amount would
be pulled---300 MWs.

If you need anything else, don't hesitate to call.

Best,
Jeff

Cynthia Sandherr
11/14/2000 05:40 PM

To: Jeff Dasovich/NA/Enron@Enron
cc: Tom Briggs/NA/Enron@Enron
Subject: Dow

Jeff: is this story true that "Enron plans to pull out of the market in
California?"

* FERC COMMISSIONER HERBERT SKIPS SAN DIEGO HEARING
FERC's sole Republican commissioner will not be attending
today's hearings in San Diego, saying the situation has gotten
too political, according to Dow Jones Newswires.
Commissioner Curt Herbert was quoted as saying: "California
would rather fight this out for the next five to ten years rather
than take steps now to solve the problem." He also expects
additional companies to join Enron Corp. and Calpine Corp. in
pulling out of the state's market, causing blackouts and ongoing
high prices next summer. "We've had three hearings already,"
Herbert added. "Are customers better off? I don't think so."
Meanwhile, State senator Debra Bowen, head of the state
Senate Energy Committee, told a hearing in Sacramento yesterday
that FERC's plan could lead to re-regulation if residents were
not protected from market manipulation. Reuters quotes Bowen as
saying: "If there's not political accountability between the
people that are making the decisions about what California
customers pay and the people who are paying those rates, we're
likely to have a revolution at the consumer level that leads to
re-regulation regardless of what's in a FERC order" (Dow Jones
Newswires, Reuters, Nov. 13).