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To: Glenn D. Rudolph who wrote (114700)	1/7/2001 1:15:25 PM
From: H James Morris	Read Replies (2) \| Respond to of 164684

Glenn, do still have Capstone (cpst)? It was one of the few stocks I started buying again last week at 23-24. As you probably well know out here in California we're on the verge of our 2 largest Utilities going busto. Which btw is our own fault. Here'a an excerpt from todays LA Times on why manufactures of generators might enjoy a good future. >California needs to open up its electrical system, not close it further. It should encourage innovation by fostering the use of small generators by individual companies. Edison and PG&E have always made it difficult for business customers to hook small generators into their larger systems, thus discouraging innovation. But the successful municipal utility, the Los Angeles Dept. of Water & Power--which was exempt from California's flawed deregulation--encourages customers to install such generators, which are produced by such California companies as Capstone Turbine of Chatsworth, AC Propulsion of San Dimas and the Torrance factory of Honeywell Inc. (formerly Allied-Signal). The Texas PUC specifically orders that "barriers to customer use of small-scale power generation be removed" in its deregulation decrees. Deregulation is not a conspiracy. Although the concept has become a big issue lately, deregulation dates to the 1970s, when the oil crisis forced Americans to think about ways to conserve electricity. Business and individuals responded. Machinery became more efficient, waste heat from office building lighting was recycled as electricity. Homeowners turned thermostats up in summer and down in winter. Also, government required utilities to accept cogenerated power from factories and encouraged experiments with solar, wind and biomass generators. Such moves made energy use more efficient. But efficiency reduced the need for ever larger power plants. And the introduction of alternative producers changed forever the old model of the regulated utility. At the same time, growing reliance on computer systems in every facet of the economy increased demand for electricity. New approaches had to be found. So federal and state governments launched deregulation. But now in despair at the collapse of their flawed system, many California political and business leaders are saying that electricity is a unique commodity that cannot be subject to competition, that only a state authority, on the model of the old Soviet Union or China, can run an electric system. Clearly that's wrong. Ohio, Texas and other states are proving that if you work intelligently you can reform electric systems. The mystery is why California can't do what other states can.