Re: This morning's Commission meeting delayed

---------------------- Forwarded by Phillip K Allen/HOU/ECT on 04/25/2001

01:51 PM ---------------------------

Ray Alvarez@ENRON

04/25/2001 11:48 AM

To: Phillip K Allen/HOU/ECT@ECT

cc: 

Subject: Re: This morning's Commission meeting delayed 

Phil,  I suspect that discussions/negotiations are taking place behind closed

doors "in smoke filled rooms", if not directly between Commissioners then

among FERC staffers.  Never say never, but I think it is highly unlikely that

the final order will contain a fixed price cap.  I base this belief in large

part on what I heard at a luncheon I attended yesterday afternoon at which

the keynote speaker was FERC Chairman Curt Hebert.  Although the Chairman

began his presentation by expressly stating that he would not comment or

answer questions on pending proceedings before the Commission, Hebert had

some enlightening comments which relate to price caps:

Price caps are almost never the right answer

Price Caps will have the effect of prolonging shortages

Competitive choices for consumers is the right answer

Any solution, however short term, that does not increase supply or reduce

demand, is not acceptable

Eight out of eleven western Governors oppose price caps, in that they would

export California's problems to the West

This is the latest intelligence I have on the matter, and it's a pretty

strong anti- price cap position.  Of course, Hebert is just one Commissioner

out of 3 currently on the Commission, but he controls the meeting agenda and

if the draft order is not to his liking, the item could be bumped off the

agenda.  Hope this info helps.  Ray

Phillip K Allen@ECT

04/25/2001 02:28 PM

To: Ray Alvarez/NA/Enron@ENRON

cc: 

Subject: Re: This morning's Commission meeting delayed 

Are there behind closed doors discussions being held prior to the meeting? 

Is there the potential for a surprise announcement of some sort of fixed

price gas or power cap once the open meeting finally happens?