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To: Amy J who wrote (135192)	5/16/2001 9:02:03 AM
From: GVTucker	Read Replies (1) \| Respond to of 186894

Amy, RE: California paid an extra $3. 8 billion for natural gas alone between March 1, 2000, and this past March 31 because of El Paso's domination of the pipeline space. The nationwide average market price of natural gas rose 79% during the period you cite. The price in California rose even more because the supply flow is more limited in California. It wasn't because of El Paso's domination of the pipeline space, it was market forces. And because the state continues to try to blame others for its woes, as this article attests, the solution to the problem is as far off as ever. If California truly had a deregulated market, power prices would have more than doubled over the past year. They didn't. Hence, the state's budget is imploding. (What I find near comical is that the New England power people hired the same guy to look at the New England gas market. Not surprisingly, he decided our market was fixed, too. This conspiracy is the most widespread market fixing in the history of the United States, with every natural gas supplier in on it. Of course, rather key to his conclusion is that the market price of natural gas up here also doubled in the past year. Minor detail, I guess.) Moody's downgraded the state of California yesterday, as I said they would do about a month ago. And as long as the state continues to ignore the simplicity of its energy problem (too much demand for too little supply) things will get worse. If there are no solutions, the state of California is headed for a budget crisis in the summer of 2002 the likes of which we haven't seen since New York City's near bankruptcy in the mid 70's.