MINUTES 
                                           
           ELECTRIC UTILITY RESTRUCTURING LEGISLATIVE OVERSIGHT COMMITTEE 
                               Wednesday, May 8, 2002 
                                     10:30 a.m. 
                           Capitol Extension, Room E1.036 
                                           
                                       ***** 
                                           
         Pursuant to a notice posted April 26, 2002, and in accordance  
         with Senate Rule 11.18, a public hearing of the Electric Utility  
         Restructuring Legislative Oversight Committee was held on  
         Wednesday, May 8, 2002, in the Capitol Extension, Room E1.036,  
         at Austin, Texas. 
          
                                       ***** 
                                           
         MEMBERS PRESENT:                        MEMBERS ABSENT: 
         Senator Troy Fraser, Co-Chairman        Representative David  
                                                 Counts 
         Representative Steven Wolens, Co-Chairman    Representative  
                                                 Debra Danburg 
         Senator Teel Bivins  
         Representative Kim Brimer 
         Senator Frank Madla 
         Senator Jane Nelson 
         Representative Sylvester Turner 
         Senator John Whitmire 
          
                                       ***** 
                                           
         Co-Chairman Fraser called the meeting to order at 10:53 a.m.   
         There being a quorum present, the following business was  
         transacted. 
          
         Co-Chairman Wolens announced that the Committee would discuss  
         issues of switching and the Electric Reliability Council of  
         Texas (ERCOT) budget.  The Committee would also discuss with  
         ERCOT what will be done to make certain there is more  
         transparency in the Texas market.  Finally, the Committee will  
         discuss how Enron was able to falsify and manipulate the market  
         in California to make sure that will never happen in Texas. 
          
         The Co-Chairman called the first witnesses: 
          
              Tom Noel, ERCOT, 
              Sam Jones, ERCOT, and 
              Becky Klein, Commissioner, Public Utility Commission (PUC). 
          
         During testimony concerning the governance of ERCOT, Co-Chairman  
         Wolens asked if anyone wished to express objections to ERCOT's  
         chairing the ERCOT subcommittees.  There was a show of hands  
         from Dynegy, AEP, Reliant and TXU. 
          
         Mike McCall, Vice President of Regulatory Affairs, TXU Energy,  
  
         and Vicki Oswalt, Vice President of Regulatory and Government  
         Affairs, Reliant Energy, both testified concerning customer  
         problems with bills. 
          
         At 12:35 p.m. Co-Chairman Wolens moved that the Committee stand  
         recessed for a brief lunch break; without objection, it was so  
         ordered.   
          
         At 1:15 p.m. the Committee reconvened, with testimony from ERCOT  
         and Commissioner Klein continuing.  Commissioner Brett Perlman  
         of the PUC also testified. 
          
         Upon completion of the above testimony and response to members'  
         questions, discussion ensued concerning recent news detailing  
         manipulation of the market in California by Enron. 
          
         Co-Chairman Wolens then called Barry Huddleston, Senior Director  
         of Market Structure, Dynegy Inc., to discuss bilateral contracts  
         for energy in Texas, followed by testimony from Steve Schaeffer,  
         Senior Vice President, Reliant Energy. 
          
         At the request of Senator Nelson, PUC Commissioner Brett Perlman  
         testified concerning the PUC's customer education plans. 
          
         Co-Chairman Fraser stated that progress has been made in  
         deregulation and Texas is doing a lot of things right, but  
         further progress needs to be made. 
          
         Co-Chairman Wolens advised that at the next meeting the  
         Committee would discuss the issue of governance, and that the  
         next meeting would probably take place at the ERCOT headquarters  
         between the middle and end of June. 
          
         There being no further business, at 3:27 p.m. Co-Chairman Wolens  
         moved that the Committee stand recessed subject to the call of  
         the Co Chairmen.  Without objection, it was so ordered.   
          
         __________________________________         
         _________________________________ 
         Senator Troy Fraser, Co-Chairman               Representative  
                                                 Steven Wolens,  
                                                 Co-Chairman 
          
         __________________________________ 
         Barbara Henderson, Clerk