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Enron Mail |
Don't forget about simple supply and demand. During the period under
discussion, Christmas lights were coming on, you are in the middle of the shortest days/longest nights period of the year and it was quite cold throughout most of the west i.e. substantial increase in demand while more than the usual units were off (they don't work like slaves without some problems) and the water flow/fish problems were affecting hydro i.e. problem with supply. Input costs can not and should not be blamed for everything. Also remember that there is more to this issue than California (please don't hate me in the morning). The supply/demand issue was felt up and down the coast including Alberta, Canada. Merchant generators had choice (unitl FERC got involved) and the non-California utilities have paid there bills - bills that, for the most part, reflected the same prices that Californians are having a hard time paying. Dan Pigeon (Embedded image moved Gary Ackerman <foothill@lmi.net< to file: 2001/03/01 08:04 PM pic00444.pcx) Please respond to foothill@lmi.net To: Susan.J.Mara@enron.com cc: "Klemstine, Barbara A(F56661)" <barbara_klemstine@apses.com<, robert berry <berry@apx.com<, Bill Ross <billr@calpine.com<, Carolyn Baker <cabaker@duke-energy.com<, CHARLES A MIESSNER <camiessn@newwestenergy.com<, carol clawson <carol_clawson@fpl.com<, "Richard H. Counihan" <counihan@greenmountain.com<, Curtis Kebler <Curtis_L_Kebler@reliantenergy.com<, curt hatton <curt.hatton@neg.pge.com<, Dan Pigeon <Dan_Pigeon@transalta.com<, Dan Douglass <douglass@arterhadden.com<, Denice Cazalet Purdum <dpurdum@apx.com<, Dace Udris <dudris@smud.org<, Ed Mosey <efmosey@bpa.gov<, George Vaughn <gavaughn@duke-energy.com<, Greg Blue <gtbl@dynegy.com<, Jack Pigott <jackp@calpine.com<, Jan Mitchell <jan.mitchell@pacificorp.com<, Corby Gardin <jcgardin@newwestenergy.com<, Jeff Crowe <jcrowe@apx.com<, Joe Ronan <joer@calpine.com<, John Fistolera <johnf@ncpa.com<, John Sousa <joso@dynegy.com<, Janie Mollon <jsmollon@newwestenergy.com<, Julie Gentz <julie.gentz@williams.com<, Karen Denne <kdenne@enron.com<, Kelly Swan <kelly.swan@williams.com<, Lynn Lednicky <LALE@dynegy.com<, Lynn Fisher <lfisher@apx.com<, Mark Stutz <mark.stutz@xcelenergy.com<, Toni Amendolia <mozart@pwrteam.com<, Mike Hansen <mshansen@bpa.gov<, Nam Nguyen <Nam.Nguyen@powersrc.com<, Paula Hall-Collins <paula.hall-collins@williams.com<, Richard Wheatley <richard_n_wheatley@reliantenergy.com<, Randy Hickok <rjhickok@duke-energy.com<, Rob Lamkin <rllamkin@seiworldwide.com<, Bob Anderson <Robert_Anderson@apses.com<, Roger Pelote <roger.pelote@williams.com<, Rob Nichol <rsnichol@newwestenergy.com<, Sandra McDonough <Sandra.McDonough@neg.pge.com<, Sue Mara <smara@enron.com<, Steve Roalstad <steve.roalstad@xcelenergy.com<, Tom Williams <tcwillia@duke-energy.com<, Mary.Hain@enron.com Subject: Re: Response to ISO Report -- CALM DOWN Dear Sue and Folks, There is an aspect to this whole episode of which we should not lose sight. The public has been hearing from us for months that the market price is the result of cost factors, mainly natural gas and emission costs. Those are valid, but we never said anything about risk premiums because they were nill. Now, the ersatz ISO study pokes a hole through that, and we need to explain the "risk" factors that weren't predominant even six months ago. It wouldn't have mattered if we had said from the outset; "It's gas, plus emission, plus risk factors". No one would have understood. But now the public is wondering if we are to explain away the price difference as risk, something that is terribly hard to measure, much less explain, then what next? Is there always another cost factor that our side can come up with to justify the market prices? From the public perception point of view, we have our hands full, and I think we should be cognizant of that angle. Listen, half the public still believes there is no capacity shortage. So why should we expect them to believe there is risk? So, I agree that we need to hammer on the the seller's risk issue, but don't expect tomorrow to be sweet. And we need more talking points, and items with which we can use to discredit the ISO analysis. That's why I asked for additional analytical help. All the public will understand is that the ISO did a study, and we did ..... ? I wonder if we can explain the ISO model as similar to someone trying to explain the NYSE index using long-run historical P/E ratios. That simple model hasn't worked. Is the NYSE an irrational market? gba Susan.J.Mara@enron.com wrote: < Gary and People, < < here is my view. this is a FERC issue. the ISO wants data. Under the < ferc order, ferc gets the data, not the ISO, not the EOB and not Governor < Davis. FERC will decide the issue. < < Re the report, i didn;t see anything new there. AN old story. FERC has < the data and is determining whether there is any abuse. The ISO just isn't < happy about being on the outside looking in. There's no big story here. < We don't usually have press conferences on something like this -- a < disaggreement at FERC about who does what. And I don't think we spend any < more time on it than that. Gov Davis is using the ISO to divert attention < from the real problems -- nobody likes his idea about buying the < transmission lines and he isn't fixing the problems in CA. < < WE SHOULD HAMMER ON THE FACT THAT THE REPORT AND THE FILING FAIL TO ADDRESS < THE SINGLE BIGGEST ISSUE -- CREDIT WORTHY STATUS OF THE ISO AND THE < UTILITIES. Therefore it has zero credibility -- an obvious political < attempt to divert attention. < - pic00444.pcx
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