Message-ID: <18925493.1075852929778.JavaMail.evans@thyme> Date: Thu, 18 Oct 2001 09:14:50 -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: Summary RTO Week Day 2 -- Planning & Expansion 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: \LCAMPBEL (Non-Privileged)\Campbell, Larry F.\Inbox X-Origin: Campbell-L X-FileName: LCAMPBEL (Non-Privileged).pst =20 RTO Week Day 2 -- October 16, 2001 Transmission Planning & Expansion The afternoon panel discussed transmission planning and expansion. The pane= lists were: Jose Degado--CEO American Transmission Company, Michael Dworkin= --Chair Vermont PSC, Mark Maher--VP Transmission Business Line, Bonneville = Power Administration, Lara Manz--PSE&G, Masheed Rosenqvist--National Grid, = Steve Walton--Enron. General Observations The Commissioners were all present although the did leave and return from t= ime to time. Commissioner's Breathitt and Massey were the most active in q= uestioning. The FERC Staff were active in asking questions after the initi= al presentations, moving along the discussion by asking questions. There w= as some reference to the morning discussion of congestion management, howev= er, there was no discussion of the merits of the various types of transmiss= ion rights. There was a good deal of consensus around the concept of the R= TO Planning Process being first a provider of information to the market (wh= ere are problems, how might they be solved, etc.) and that the where possib= le that expansion be funded by market participants who would benefit. Ther= e was a good deal of discussion of "least cost planning" and the identifica= tion of options which are not transmission related. All agreed there had t= o be backstop authority to build transmission, however then the challenge i= s who pays for it, which raises the need for dispute resolution. =20 Opening Statements Jose Delgado: ATC is a transmission only company with MISO as the system op= erator. They view everyone as a customer whose needs are to be met. They = were formed by divestiture by IOUS, coops and munis and with a $500 million= asset base initially. Their current ten year plan will add $1billion of in= vestment. Their top priorities are connecting generation and load. =20 Michael Dworkin: Because transmission is a common good, construction affect= s all parties not just one party. The environmental and permitting of line= s requires a balance of benefits with costs and a long range view. The ide= a of joint boards should be considered for dealing with multi-state project= s, although FERC has show little interest in joint boards they have been us= ed by FCC. State input needed because of the local needs and impacts which= must be considered. Mark Maher: FERC must consider the unique characteristics of the West when = considering congestion management. LMP is not a good fit to hydro systems = with their multiple use obligations. RTO West is developing a planning pro= cess which will give the RTO the freedom to develop options as we learn in = the future. The RTO needs a strong centralized planning process. Laura Manz: The various aspects of planning are connected. Pricing (LMP) i= s the key to getting the right signals for expansion of transmission and re= sources. No competitor should have an advantage over another. The RTO ne= eds a central planning process but it shouldn't push solutions. The market= should decide on solutions. =20 Masheed Rosenqvist: The morning discussion of congestion management talked = about hedging against risk. The planning discussion is not about what we h= ave now, but about how to avoid future congestion. The Commission has take= n conflicting positions in different cases. The issues that need to be ans= wered are: How can merchant transmission be compensated? Should transmiss= ion projects be open to RFPs? Is FERC open to market based pricing for exp= ansions? =20 Steve Walton: The most important thing for FERC to do for expansion is to = settle the matter of industry structure do away with the uncertainty that h= as frozen transmission investment. The RTO debate has been going on for 5 = years or more and needs to be settled. For expansion to go forward, there = needs to be a clear property right which accrues to the expanding party. Y= ou are always going to have muddy issues in planning. For instance if a 13= 8 kV line is all that is needed to day, but future considerations of scare = right-of-way say a 345 kV line should be built, who pays for the extra cost= . In order to resolve such matters the planning process must include a dis= pute resolution process, appeal able to FERC, to decide such matters. Discussion Kevin Kelly asked about he fact that some parties benefit form current cong= estion so how does a stakeholder process get things built when some oppose.= Most agreed that if a party wants to fund construction it should be built= with the beneficiaries funding. Michael Dworkin expressed concerns about = use of eminent domain to build which means a benefit test must exist to say= this is the best solution, i.e. least cost planning. This lead to discuss= ion of the need for the RTO to be provider of information to all parties so= they can make intelligent decisions. =20 Commissioner Massey asked about whether the system was (a) under built and = needed lots of expansion so don't worry about overbuilding or (b) transmiss= ion planning should consider all options before construction of new facilit= ies. The panel agreed that pricing needs to be a prime determinant in the = process. Michaela Dworkin worried that overbuilding distorts decisions. L= aura Manz felt that the term "under built" is a secondary effect of not hav= ing proper pricing of locational prices to guide parties. Dick O'Neil asked if LMP will work in the West. Mark Maher said it wouldn'= t. Laura Manz said it applies everywhere because of physics, they manage h= ydro facilities in PJM. Michael Dworkin said LMP means an explicit measure= of cost of congestion and the value of generation at locations and ought n= ot to be rejected just intelligently designed. BPA is looking pricing mode= l but LMP won't work. Steve Walton said LMP needed for real time dispatch,= but given the nature of the Northwest hydro system it must have some "twea= ks" like bilaterals and allow operator self-schedule output levels to permi= t river coordination. Hydro system optimizes over weeks and months to max= imize firm energy production not on an hour to hour basis. PJM has hydro, = but not 70% as in the Northwest. Implementation will be different because = such thing as unit commitment are different when you have primarily hydro a= nd base load coal. In the summation at the end of the panel, four principles were listed: (1)= RTO must provide information, (2) RTO should identify solutions, (3) RTO s= hould be unbiased and (4) the RTO should be accountable. The disagreement = was over the last two points, Michael Dworkin felt that #3 (unbiased) was c= ritical and that #4 (accountability) was accomplished by having regulators = involved in governance. Jose Delgado said and Transco can't be unbiased si= nce it provides services, although the ISO above it can be, but accountabil= ity is based on loosing your investment if you make an mistake. This last = point really comes down to a preference for ISO over Transco forms and the = tension which exist because unbiased and accountability issues. Steve