In case you haven't already seen this:

El Paso Addresses the California Energy Situation  ( February 26, 2001 )
 HOUSTON, Feb. 26 /PRNewswire/ -- El Paso Corporation (NYSE: EPG)
reaffirmed today its continuing commitment to work with all parties
involved to help improve California's energy situation. "We are surprised
to see continuing misinformation in the media concerning El Paso's
involvement in California," said Norma Dunn, senior vice president of
Corporate Communications and External Affairs at El Paso Corporation. "We
would like to take this opportunity to clarify the record."  The
significant increase in electricity demand at a time when available power
supplies are short has caused a sharp climb in the price of power, which
has in turn increased the price of natural gas used to generate
electricity. High natural gas prices are, therefore, an effect rather than
a cause of the power shortage.  Allegations that natural gas prices were
deliberately manipulated by withholding capacity on the El Paso Natural Gas
pipeline overlook critical facts and are demonstrably untrue. It is not
possible for any holder of capacity on the El Paso Natural Gas pipeline to
cause a significant increase in California gas prices by refusing to use
that capacity. The El Paso Natural Gas pipeline is required by law to post
the availability of any unused capacity on its public bulletin board and is
obligated to sell that capacity for no more than the published tariff rate
found to be just and reasonable by the Federal Energy Regulatory
Commission. All capacity held by El Paso Merchant Energy on the El Paso
Natural Gas Pipeline has been used or made available for use by others to
serve California and other Western markets.  Allegations that there was a
"conspiracy" in 1996 to limit new interstate pipeline capacity into
California are absolutely refuted by facts that no one can challenge. The
facts show that all new pipelines considered during the 1990s were either
built or were not viable projects because they lacked sufficient customer
support to justify their construction. For example, despite years of
marketing efforts by Tenneco, not a single potential customer could be
induced to make the sort of binding commitment required for the proposed
Altamont project to proceed. For that reason alone, it was ultimately
dropped. In 1996, according to estimates, there were between one and two
billion cubic feet per day (Bcf/d) of excess natural gas transportation
capacity on existing interstate pipelines serving California. Indeed, it
was misplaced reliance on the continuing availability of such excess
capacity that prompted the California Public Utilities Commission to
encourage PG&E, SoCal Edison, and SoCal Gas, beginning in 1996 and
continuing into 1998, to relinquish over 1.5 Bcf/d of firm transportation
capacity on the El Paso Natural Gas pipeline. Processes are now under way
to assess present demand and support for new interstate pipeline capacity
into California, and El Paso intends to do its part to help satisfy
whatever needs may be established today.  As recently as last year, there
were periods when significant quantities of unused capacity were available
on the El Paso Natural Gas pipeline that were not necessary to meet demands
at that time. Notwithstanding its availability, this capacity was not used
by shippers to California to fill in- state natural gas storage facilities
for future use. If California had taken advantage of the opportunity in
2000 to store the same volumes of natural gas that had been stored in 1999,
reliance on the spot market would have been reduced and the steep rise in
prices at the California border could have been substantially mitigated or
avoided.  It is now widely recognized that the California "energy crisis"
was caused by the inability of the supply of power available in California
to keep pace with the state's economy and increased demand. A combination
of factors caused a sharp increase in power prices. First, the construction
of new power plants in California is a slow, difficult, and heavily
regulated process. As a result, the growing demand has far outstripped
in-state generating capabilities. Second, unfavorable precipitation and
increased out-of-state demand caused some of the hydroelectric power
normally relied on by California to become unavailable. Third, increased
demand for power in the western United States drove up prices that
California had to pay to out-of-state generators. Fourth, state policies
deregulated wholesale power prices but capped the rates paid by consumers,
leaving demand unrestrained and preventing utilities from recovering their
costs. Fifth, because rate caps prevented utilities from passing increased
costs to consumers, the utilities' creditworthiness was impaired, causing
supplemental power needed during peak periods to become more difficult and
expensive to purchase. Sixth, the early and greater-than-normal use of
peaking units-plants that are designed to only operate under peak demand
conditions-necessitated unscheduled maintenance, rendering them unavailable
at critical times. Seventh, during the final months of 2000, some power
plants were forced to shut down because increased usage exhausted their air
emissions credits. Eighth, a warm summer followed by an early onset of cold
weather further drove up demand for power. Finally, the increased power
costs in California could have been substantially mitigated through
long-term power contracts and less reliance on the volatile short-term
power market.  "California is currently in a difficult position, but now
has the opportunity to refine its regulatory model and craft a long-term
energy policy," said Dunn. "El Paso has been one of the largest suppliers
of energy to California for more than 50 years, and we are actively
participating with all parties in California to be a part of a long-term,
stable solution to California's energy needs."  El Paso Corporation, the
largest and most broadly based natural gas company in the world, spans the
energy value chain from wellhead to electron. With an enterprise value in
excess of $50 billion, El Paso is a leader in every phase of the natural
gas industry. The company owns and operates a significant portion of the
North American natural gas delivery grid, operates the fastest growing,
most sophisticated energy merchant group, and is the nation's third largest
natural gas producer. El Paso, a leader in risk management techniques, is
focused on maximizing shareholder value, transforming existing markets, and
speeding the development of new markets. Visit El Paso at www.epenergy.com.
 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS  This release
includes forward-looking statements and projections, made in reliance on
the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. The company has made every reasonable effort to ensure that the
information and assumptions on which these statements and projections are
based are current, reasonable, and complete. However, a variety of factors
could cause actual results to differ materially from the projections,
anticipated results or other expectations expressed in this release. While
the company makes these statements and projections in good faith, neither
the company nor its management can guarantee that the anticipated future
results will be achieved. Reference should be made to the company's (and
its affiliates') Securities and Exchange Commission filings for additional
important factors that may affect actual results.

Bob Brooks
GPCM Natural Gas Market Forecasting System
http://gpcm.rbac.com
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