Message-ID: <12464600.1075853143173.JavaMail.evans@thyme> Date: Thu, 18 Oct 2001 14:50:36 -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, 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, lex.carroll@enron.com, terri.clynes@enron.com, oscar.dalton@enron.com, david.forster@enron.com, e..kelly@enron.com, beau.ratliff@enron.com, doug.sewell@enron.com, larry.valderrama@enron.com Subject: FW: RTO Week -- Summary of Standards and Practices Panel Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 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 , 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. , Carroll, Lex , Clynes, Terri , Dalton III, Oscar , Forster, David , Kelly, Mike E. , Ratliff, Beau , Sewell, Doug , Valderrama, Larry X-cc: X-bcc: X-Folder: \MCARSON2 (Non-Privileged)\Carson, Mike\Deleted Items X-Origin: Carson-M X-FileName: MCARSON2 (Non-Privileged).pst =20 -----Original Message----- From: Rodriquez, Andy=20 Sent: Thursday, October 18, 2001 4:46 PM To: Black, Tamara Jae; '/o=3DENRON/ou=3DNA/cn=3DRecipients/cn=3Dnotesaddr/c= n=3Da478079f-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; Blaine, Jay; Bolt, Laurel; Broderick, Paul J.; Broussard, = Richard; Burnett, Lisa; Campbell, Larry F.; Capasso, Joe; Carson, Mike; Che= n, Alan; Choate, Jason; Cline, Kevin; Collins, Dustin; Comeaux, Keith; Coul= ter, Kayne; Davis, Mark Dana; Day, Smith L.; Dean, Clint; Decook, Todd; Eme= sih, Gerald; Errigo, Joe; Forney, John M.; Freije, William; Garcia, Miguel = L.; Gilbert, Gerald; Gilbert-smith, Doug; Giron, Gustavo; Greer, Andrew; Gu= aly, 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; Ma= skell, David; May, Tom; McElreath, Alexander; Miller, Jeffrey; Oh, Seung-Ta= ek; Olinde Jr., Steve; Pace, Andy; Padron, Juan; Pan, Steve; Philip, Willis= ; Podurgiel, Laura; Poppa, John D.; Presto, Kevin M.; Quenet, Joe; Rawal, P= unit; Rogers, Benjamin; Rust, Bill; Ryan, David; Saibi, Eric; Schiavone, Pa= ul; 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, C= layton; Wang, Steve; Williams, Ryan; Willis, Cory; Zipperer, Mike; Baughman= , Edward D.; Clynes, Terri; Dalton III, Oscar; Kelly, Mike E.; Sewell, Doug= ; Valderrama, Larry; Walton, Steve; Roan, Michael; Perrino, Dave; Maurer, L= uiz; Hueter, Barbara A.; Landwehr, Susan M.; Hoatson, Tom; Novosel, Sarah; = Nicolay, Christi L.; Yeung, Charles Subject: RE: RTO Week -- Summary of Standards and Practices Panel RTO Week Day 4 - October 18, 2001 Afternoon Session =20 Standardizing Markets, Business, and Other Practices=20 Panelists for this discussion were: Sarah Barpoulis, PG&E National Energy = Group; William P. Boswell, GISB; Bill Burkes (substituting for David J. Chr= istiano), City Utilities of Springfield, Missouri; David N. Cook, NERC Gene= ral Counsel; Michael Kormos PJM Interconnection; LeRoy Koppendrayer, Minnes= ota Public Utilities Commission; and Marty Mennes, Florida Power & Light Co= mpany. =20 General Observations =20 The Commissioners were all present the majority of the time (Massey left la= te in the afternoon). FERC Staff was active in the discussion; however, t= he commissioners were very active as well, asking perhaps as much as 70% of= all questions. There was a general consensus that standards were needed; = much discussion focused simply on how much and by who. The Commission seeme= d very interested in leaning what they needed to do to move the industry fo= rward and how far they needed to go. Panelists urged the need to mover for= ward as quickly as possible, but both they and FERC seemed to recognize tha= t some of the issues regarding standardized market design and such needed t= o be addressed before RTOs could really begin to move forward. There was d= iscussion on identifying which industry group (NERC or GISB) would take the= reins in the future. On an interesting tangential note, there was noticea= ble conflict between NERC and GISB, with veiled insults between the two org= anizations somewhat common during the discussions.=20 =20 FERC Deliverables A great deal of the discussions focused on identifying what the industry ne= eded from the Commission. Staffers probed all panelists to find what they = felt was critical. =20 The first major topic was "How many RTOs? What is their scope?" All panel= ists seemed to agree that this question needed to be answered immediately b= y FERC, in strong definitive language. N o one offered any specific langua= ge, but seemed to be urging FERC to issue a formal statement. The next topic was, "What will be standard market design?" Panelists varie= d on this, but most felt strong guidance from FERC is urgent. Some urged f= or one mandatory design for North America, one supported a set of rigid sta= ndard designs, one supported a single design with requests for exceptions (= followed by an in-depth review process), and one seemed to prefer the curre= nt situation. The commission in general seemed to be very interested in understanding wha= t the industry needed to move forward. They continually visited this topic= throughout their discussions, asking questions like, "Do we need to issue = a Mega-Order that addresses all these issues?" and, "How much detail do you= need us to provide?" General feel from the panelsists seemed to be they = wanted strong leadership in this areas. Kormos and Burkes went so far as t= o say FERC should "Mandate as much as they felt comfortable - and then go a= little further." Others seemed to be a little worried about this idea, bu= t in general did not oppose the concept, citing only general warnings and t= he need for cautious investigation. =20 One item of interest: Wood referred to the filing made by the Electronic Sc= heduling Collaborative and specifically asked if the items identified in th= e "RTO Design and RTO Implementation" section would address many of the que= stions and uncertainty facing the industry with regard to RTO design. Korm= os indicated that clear and specific answers to these questions specifying = a course of action would go a long way toward guiding the industry. The se= ction to which Wood referred was one that I wrote, and asked the following = questions: ? Congestion Management - When Operational Security Violations occu= r, how is the system to be stabilized in a fair and equitable manner that i= s nonetheless efficient? Will LMP based systems be standard, or will there= be others that must be accommodated? ? Transmission Service - Are transmission services required to sch= edule ("covered" schedules only), or are they risk management tools protect= ing from congestion charges (both "covered" and "uncovered" schedules are a= llowed)?=20 ? Loop Flows - Are contract-path based or flow-based transmission = services appropriate? If contract-path based, how are parallel path issues= to be addressed? ? Grandfathered Transmission Service - Should contracts existing pr= ior to RTO development be transferred, or is there an equitable way to reti= re those contracts? Are there other solutions? ? Energy Imbalance Markets - How are imbalance markets to function?= Will they serve as real-time energy markets (support unbalanced schedules)= , be limited to supplying needs of imbalance service (require balanced sche= dules), or will they be required at all? ? Ancillary Services - Will ancillary service markets be developed = in standard ways? Will entities be required to actually schedule ancillary= services (required to schedule), or will they be treated primarily as fina= ncial instruments (protecting against real-time POLR charges)? ? Losses - Can we utilize the imbalance markets to support losses? = Can we create specific loss standards that facilitate the scheduling proce= ss, or must we support methods that are currently in tariffs, but technical= ly unwieldy? ? Non-Jurisdictionals - How are non-jurisdictionals to be integrate= d into the new world? Should systems be designed with the assumption that = non-jurisdictional will be part of an RTO? Or should they be designed to t= reat each NJE as a separate entity? Hopefully, FERC will use this section as a template to answer these critica= l questions in an assertive manner, and give some solid direction in which = to move. Kormos emphasized the need for concrete answers to these questions= , pointing out that vague answers (i.e., "do congestion management") will t= ake a year or two to resolve, but specific answers (i.e., "LMP with financi= al hedging instruments") will take only months. The Commission asked Mike = about moving forward, and he told them that effectively, it was impossible = to move forward with implementation without getting these issues addressed. Now for a funny point - One of the commissioners (I think Breathitt) refer= red to some concerns expressed in the Northwest that their high concentrati= on of hydro power makes LMP inefficient for the Northwest. Kormos flat out= said, "My profession is understanding how power systems work, and I don't = believe that that statement is true." He then backpedaled a bit and said t= hat it would need more study, but he stood by his statement that the assert= ion by the Northwest interests was false. NERC and GISB A great deal of discussion focused around the need for a single standard-se= tting organization. Massey went so far as to ask, "Are we looking at a bea= uty contest between NERC and GISB?" Cook and Boswell then went into severa= l short polite jabs at each other's organizations. Other participants cont= inually reiterated the need for ONE, INDEPENDENT organization. Interesting= ly, Boswell was very emphatic about the established trust and respect in GI= SB, while Cook preferred to only talk about the "new" structure of NERC and= did not focus on its history. Brownell offered some not-too-subtle passive support of GISB by pointedly a= sking both Cook and Boswell if they lobbied political positions (i.e., were= they not only an organization but also a stakeholder?). GISB was easily a= ble to say they were not, but NERC of course had to admit to their romancin= g of Congress and the Bush administration for reliability legislation. Poin= t, Brownell. Mennes acted as somewhat of a supporter for NERC, playing Dave Cook's yes-m= an. He probably did them a little bit of harm by pointing to NERC's suppos= ed "successes," such as TLR and E-Tag. If staffers have tenure, they will = likely remember that these "successes" have not been so successful, resulti= ng in several filings and interventions. We may also wish to file comments= in specific objection to these claims, to refresh their memory and to show= the pretty picture Marty painted was in fact a fiction. There was a little discussion about splitting reliability and market issues= , but general consensus was that I could not be done. There was also some = talk of folding NERC under GISB/EISB. The arguments began winding down after a some time, and Boswell strongly ur= ged the Commission to speak to industry executives and advocacy group leade= rship to see whether NERC or GISB should lead the industry forward. NERC s= omewhat less enthusiastically supported this position. In general, I would= say it was a close fight but GISB came out more on top. Let me know if you have any questions. Andy Rodriquez Regulatory Affairs - Enron Corp. andy.rodriquez@enron.com 713-345-3771=20