Message-ID: <22321517.1075863383843.JavaMail.evans@thyme> Date: Wed, 17 Oct 2001 06:41:21 -0700 (PDT) From: jae.black@enron.com To: /o=enron/ou=na/cn=recipients/cn=notesaddr/cn=a478079f-55e1f3b0-862566fa-612229@enron.com, william.abler@enron.com, anubhav.aggarwal@enron.com, diana.allen@enron.com, harry.arora@enron.com, debra.bailey@enron.com, russell.ballato@enron.com, ted.ballinger@enron.com, don.baughman@enron.com, moises.benchluch@enron.com, hicham.benjelloun@enron.com, robert.benson@enron.com, corry.bentley@enron.com, jae.black@enron.com, jay.blaine@enron.com, laurel.bolt@enron.com, j..broderick@enron.com, richard.broussard@enron.com, lisa.burnett@enron.com, f..campbell@enron.com, joe.capasso@enron.com, mike.carson@enron.com, alan.chen@enron.com, jason.choate@enron.com, kevin.cline@enron.com, dustin.collins@enron.com, keith.comeaux@enron.com, kayne.coulter@enron.com, dana.davis@enron.com, l..day@enron.com, clint.dean@enron.com, todd.decook@enron.com, gerald.emesih@enron.com, joe.errigo@enron.com, m..forney@enron.com, william.freije@enron.com, l..garcia@enron.com, gerald.gilbert@enron.com, doug.gilbert-smith@enron.com, gustavo.giron@enron.com, andrew.greer@enron.com, jaime.gualy@enron.com, claudia.guerra@enron.com, utku.gulmeden@enron.com, gautam.gupta@enron.com, amie.ha@enron.com, patrick.hanse@enron.com, juan.hernandez@enron.com, rika.imai@enron.com, david.ingram@enron.com, daniel.jenkins@enron.com, jason.kaniss@enron.com, jeff.king@enron.com, john.kinser@enron.com, carrie.larkworthy@enron.com, dean.laurent@enron.com, justin.laverell@enron.com, chris.lenartowicz@enron.com, matt.lorenz@enron.com, gretchen.lotz@enron.com, thomas.lowell@enron.com, iris.mack@enron.com, ashish.mahajan@enron.com, peter.makkai@enron.com, mauricio.marquez@enron.com, david.maskell@enron.com, tom.may@enron.com, alexander.mcelreath@enron.com, jeffrey.miller@enron.com, seung-taek.oh@enron.com, steve.olinde@enron.com, andy.pace@enron.com, juan.padron@enron.com, steve.pan@enron.com, willis.philip@enron.com, laura.podurgiel@enron.com, d..poppa@enron.com, m..presto@enron.com, joe.quenet@enron.com, punit.rawal@enron.com, andy.rodriquez@enron.com, benjamin.rogers@enron.com, bill.rust@enron.com, david.ryan@enron.com, eric.saibi@enron.com, paul.schiavone@enron.com, bryce.schneider@enron.com, michael.seely@enron.com, erik.serio@enron.com, lisa.shoemake@enron.com, erik.simpson@enron.com, robert.stalford@enron.com, joe.stepenovitch@enron.com, j..sturm@enron.com, mark.symms@enron.com, ramanarao.tamma@enron.com, d..thomas@enron.com, reese.trejo@enron.com, maria.valdes@enron.com, clayton.vernon@enron.com, steve.wang@enron.com, ryan.williams@enron.com, cory.willis@enron.com, mike.zipperer@enron.com, d..baughman@enron.com, terri.clynes@enron.com, oscar.dalton@enron.com, e..kelly@enron.com, doug.sewell@enron.com, larry.valderrama@enron.com Subject: FW: RTO Week -- Summary of Congestion Management Panel Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable X-From: Black, Tamara Jae X-To: /o=ENRON/ou=NA/cn=Recipients/cn=notesaddr/cn=a478079f-55e1f3b0-862566fa-612229 , Abler, William , Aggarwal, Anubhav , Allen, Diana , Arora, Harry , Bailey, Debra , Ballato, Russell , Ballinger, Ted , Baughman Jr., Don , Benchluch, Moises , Benjelloun, Hicham , Benson, Robert , Bentley, Corry , Black, Tamara Jae , Blaine, Jay , Bolt, Laurel , Broderick, Paul J. , Broussard, Richard , Burnett, Lisa , Campbell, Larry F. , Capasso, Joe , Carson, Mike , Chen, Alan , Choate, Jason , Cline, Kevin , Collins, Dustin , Comeaux, Keith , Coulter, Kayne , Davis, Mark Dana , Day, Smith L. , Dean, Clint , Decook, Todd , Emesih, Gerald , Errigo, Joe , Forney, John M. , Freije, William , Garcia, Miguel L. , Gilbert, Gerald , Gilbert-smith, Doug , Giron, Gustavo , Greer, Andrew , Gualy, Jaime , Guerra, Claudia , Gulmeden, Utku , Gupta, Gautam , Ha, Amie , Hanse, Patrick , Hernandez, Juan , Imai, Rika , Ingram, David , Jenkins IV, Daniel , Kaniss, Jason , King, Jeff , Kinser, John , Larkworthy, Carrie , Laurent, Dean , Laverell, Justin , Lenartowicz, Chris , Lorenz, Matt , Lotz, Gretchen , Lowell, Thomas , Mack, Iris , Mahajan, Ashish , Makkai, Peter , Marquez, Mauricio , Maskell, David , May, Tom , McElreath, Alexander , Miller, Jeffrey , Oh, Seung-Taek , Olinde Jr., Steve , Pace, Andy , Padron, Juan , Pan, Steve , Philip, Willis , Podurgiel, Laura , Poppa, John D. , Presto, Kevin M. , Quenet, Joe , Rawal, Punit , Rodriquez, Andy , Rogers, Benjamin , Rust, Bill , Ryan, David , Saibi, Eric , Schiavone, Paul , Schneider, Bryce , Seely, Michael , Serio, Erik , Shoemake, Lisa , Simpson, Erik , Stalford, Robert , Stepenovitch, Joe , Sturm, Fletcher J. , Symms, Mark , Tamma, Ramanarao , Thomas, Paul D. , Trejo, Reese , Valdes, Maria , Vernon, Clayton , Wang, Steve , Williams, Ryan , Willis, Cory , Zipperer, Mike , Baughman, Edward D. , Clynes, Terri , Dalton III, Oscar , Kelly, Mike E. , Sewell, Doug , Valderrama, Larry X-cc: X-bcc: X-Folder: \RBENSON (Non-Privileged)\Benson, Robert\Deleted Items X-Origin: Benson-R X-FileName: RBENSON (Non-Privileged).pst =20 -----Original Message----- From: Novosel, Sarah=20 Sent: Tuesday, October 16, 2001 10:46 PM To: Novosel, Sarah; Presto, Kevin M.; Davis, Mark Dana; May, Tom; Will, Llo= yd; Lindberg, Susan; Gupta, Gautam; Misra, Narsimha; Scheuer, Janelle; Baug= hman, Edward D.; Herndon, Rogers Cc: Nicolay, Christi L. Subject: RE: RTO Week -- Summary of Congestion Management Panel RTO Week Day 2 -- October 16, 2001 Congestion Management and Transmission Rights The morning panel discussion was on congestion management. The panelists w= ere: Nancy Brockway, Commissioner New Hampshire PSC; Reem Fahey, Edison Mi= ssion; Carol Guthrie, Chevron/Texaco; Shmuel Oren, University of California= - Berkley and advises Texas PUC; Andy Ott, PJM; Michael Schnitzer, NorthBr= idge Group. General Observations The Commissioners were again all present (Wood left mid-morning to give tes= timony on Capitol Hill). Today, however, FERC Staff was much more active i= n the discussion and the commissioners asked very few questions. The topic= s are so interrelated that many of the same issues already discussed are be= ing rehashed again. This will probably continue for the rest of the week. = What I have found most encouraging so far has been the widespread support = for some of the basic concepts, most notably the need for a real time energ= y market based using LMP. Very few panelists have opposed this; at most, a= couple of panelists have argued that the real time market should not be st= andardized -- basically conceding that PJM's system will be implemented in = the Northeast but urging that it not be mandated everywhere else. =20 Locational Marginal Pricing The panelists all agreed that LMP in the real time market is necessary (Sch= muel Oren does not oppose it). Most of the panelists think this needs to b= e standardized across RTOs. Andy Ott says the seams will remain a problem = and a barrier to trading if the real time market is not standardized. Car= ol Guthrie does not favor standardization and urged FERC to not standardize= the PJM system throughout the eastern interconnect. She said FERC should = try a couple of different systems and see what works. =20 FTRs versus Flowgates The panelists agreed that transmission rights should be financial, not phys= ical. Schmuel conceded this point for the discussion but this may not be h= is preference - unclear. Most of the panelists, including the PSC commissi= oner, prefer FTRs rather than flowgates. Schmuel is a flowgate advocate. = After some discussion, the panelists agreed that FTRs and flowgates could w= ork together, provided that the definition of flowgate is understood. Andy= Ott said flowgates could work with FTRs if the purpose of having flowgates= is the same purpose of having hubs (liquidity, standard product), and if a= flowgate is defined as a grouping of point-to-point rights, then FTRs and = flowgates can coexist. If a flowgate is a hub for transmission rights, it'= s okay. However, if flowgate is defined as a physical boundary requiring s= cheduling, the two cannot coexist. Schmuel seemed to agree with this premi= se, although this is not his preference. He seems to prefer only flowgates= without FTRs. Brockway seems to prefer FTRs rather than flowgates for fe= ar that flowgates will result in excess socialization of costs. The panelists also agreed generally that revenues generated from FTRs or fl= owgates should be allocated to load, but the method of allocation was not a= greed upon. FERC staff asked the panelists to discuss commercially significant flowgate= s. Many of the panelists discussed the problem with deciding what constitu= tes a commercially significant flowgate, and what happens when circumstance= s change over time, resulting in different flowgates being commercially sig= nificant. Schmuel said you could use either a system that relies only on c= ommercially significant flowgates or one that uses all flowgates, but if pa= rticipants are willing to accept a system where they are not perfectly hedg= ed, use of commercially significant flowgates is acceptable. =20 The panelists agreed that these financial rights (either FTRs or flowgates)= should be tradable in the secondary market. The panelists disagreed on wh= ich instrument -- FTRs or flowgates -- are more tradable. Andy thinks FTRs= are more tradable; Schmuel thinks flowgates are more tradable. Options versus Obligations The panelists discussed the benefits of having FTRs be options but also dis= cussed the additional problems presented to the system operator if FTRs are= only options and the FTR holder is not required to flow or pay if it does = not flow. Andy Ott said options will most likely result in fewer FTRs bein= g allocated. Schnitzer says the issue must be resolved up front. =20 The afternoon panel was on Transmission Planning and Expansion. Steve Walt= on was a panelist and will be providing a summary of the discussion shortly= . =20 Let me know if you have any questions. Sarah