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I've called Eric Thode in our Houston office and if he's successful, there
will be something in the trade press about this issue soon. Enron Capital & Trade Resources Corp. From: "Gannett, Craig" <CraigGannett@DWT.COM< 01/30/2001 01:30 PM To: "'Cynthia.Sandherr@enron.com'" <Cynthia.Sandherr@enron.com< cc: "'Hain, Mary'" <mary.hain@enron.com<, "'Robertson, Linda'" <linda.robertson@enron.com<, "'Kaufman, Paul'" <paul.kaufman@enron.com< Subject: RE: Questions you requested This excellent material, and very important, but it's pretty esoteric. If you want to really kick the ISO and Davis in the shins, use Mary's stuff about the ISO derating the transmission line at COB. Assuming it's true that the ISO has effectively shut down the northbound transmission route at the Oregon border in order to hoard power, and that this raised the market price in the NW by about $50-75 per megawatt-hour, and that this is costing the NW $2-5 million per day (at least for the period that Mary looked at), that will send the NW Senators into low earth orbit. If we can establish that this derating ruse was a change adopted by Davis's handpicked ISO board, the NW Senators will escape Earth's gravitational pull. For that very reason, we have to be able to back up anything we say, and we need to anticipate any defenses the ISO may have. But if you want NW elected officials to quit being so polite toward Davis, that will do it. Craig -----Original Message----- From: Cynthia.Sandherr@enron.com [mailto:Cynthia.Sandherr@enron.com] Sent: Tuesday, January 30, 2001 11:21 AM To: joshua_sheinkman@wyden.senate.gov Cc: gpeters@epsa.org; Allison.Navin@enron.com; Steven.J.Kean@enron.com Subject: Questions you requested Joshua: I found the Enron staff who have had the conversations with the Oregon PUC so believe the attached Q&A meet your request. If you need additional materials, just let me know. (See attached file: Ron Wyden Qs for Steve Kean.doc) In addition, EPSA sent some questions they would like the Senator to ask of any of the EPSA witnesses (Reliant, Calpine, Williams, or Enron) dealing with the Impact of the Recent changes in the Management of the California Independent System Operator: Background: The Cal ISO acts as the "air traffic controller" for the interstate electric power grid in California. The ISO determines who gets access to the grid and under what terms and conditions. It is the ISO that helps ensure that access to the grid is truly open and non-discriminatory. When the ISO was initially constituted several years ago, a "stakeholder" management board was created that represented a wide range of market interests---power sellers, generators, consumers, political leaders, etc. After the power emergencies began last summer, this board was criticized as too splintered and indecisive. In a response to this perception and in an effort to impose greater control over the ISO, the California state legislature replaced the stakeholder board with a five-person board that serves at the request of the California Governor. QUESTION: The Cal ISO has recently seen its management board changed from one with broad stakeholder representation to one appointed by the California Governor. Given that California is a critical part of a larger western regional power market, how can we ensure that regional power needs are reflected in the decisions of the new state appointed Board? ANSWER: We really can't. Most of the time, the Board has a limited role. However, the "traffic controller" role becomes crucial when the power crunch comes. Every market participant needs to be worried that, during times of real power emergencies, the Cal ISO Board will be too willing to shoot first and ask questions later. Companies with firm transactions involving out-of-state entities may find their needs and commercial interests sacrificed to prevent local political problems. Instead of robust, competitive regional markets, politicizing transmission decisions practically guarantees an increasingly balkanized market.
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