Message-ID: <11414048.1075860384282.JavaMail.evans@thyme> Date: Fri, 6 Oct 2000 06:39:00 -0700 (PDT) From: mary.hain@enron.com To: christopher.calger@enron.com, christian.yoder@enron.com, tim.belden@enron.com, mike.swerzbin@enron.com, chris.foster@enron.com, dave.parquet@enron.com, stewart.rosman@enron.com, john.forney@enron.com, holli.krebs@enron.com, kim.ward@enron.com, paul.choi@enron.com, paul.kaufman@enron.com Subject: Buying power from Industrials Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Mary Hain X-To: Christopher F Calger, Christian Yoder, Tim Belden, Greg Wolfe@ECT, Mike Swerzbin, Chris H Foster, Dave Parquet, Stewart Rosman, John M Forney, Holli Krebs, Kim Ward, Paul Choi, Paul Kaufman X-cc: X-bcc: X-Folder: \Mary_Hain_Aug2000_Jul2001\Notes Folders\Discussion threads X-Origin: Hain-M X-FileName: mary-hain.nsf ---------------------- Forwarded by Mary Hain/HOU/ECT on 10/06/2000 01:41 PM --------------------------- To: Edward D Baughman/HOU/ECT@ECT, Joseph Wagner/NA/Enron@Enron, Raymond Bowen/HOU/ECT@ECT, Dennis Benevides/HOU/EES@EES, George Wood/Corp/Enron@Enron, John Llodra/Corp/Enron@ENRON, Janelle Scheuer/HOU/ECT@ECT, Tom Swank/HOU/ECT@ECT, David Fairley/HOU/ECT@ECT, Mike Curry/HOU/ECT@ECT, Terri Clynes/HOU/ECT@ECT, Oscar Dalton/HOU/ECT@ECT, Joe Gordon/Corp/Enron@Enron, Mike E Kelly/NA/Enron@Enron, Joseph Piotrowski/NA/Enron@Enron, Zachary Sampson/NA/Enron@ENRON, Dave Mangskau/Corp/Enron@ENRON, Doug Sewell/HOU/ECT@ECT, Posey Martinez/HOU/ECT@ECT, Sheila Tweed/HOU/ECT@ECT, Bob Carter/HOU/ECT@ECT, James E Keller/HOU/EES@EES, Robert Frank/NA/Enron@Enron cc: Richard Shapiro/NA/Enron@Enron, James D Steffes/NA/Enron@Enron, Mary Hain/HOU/ECT@ECT, Sarah Novosel/Corp/Enron@ENRON, Joe Hartsoe/Corp/Enron@ENRON, Donna Fulton/Corp/Enron@ENRON, Harry Kingerski/NA/Enron@Enron Subject: Buying power from Industrials Below is information about a FERC order allowing a power marketer, like EES or EPMI, to file to effectively act as an industrials "agent" when buying an industrial's excess power to insert into the grid. Generally, an industrial would be required to obtain its own FERC power marketer license (takes about 60 days) in order to sell into the grid. EPMI and EES have not requested the "Impower" type agent authority yet, but I have been asked to file this for EPMI (and, Dennis, we could file for EES too, let me know). If FERC allows EPMI and EES to do this, then we would make quarterly filings on behalf of any industrials from whom we buy power at wholesale and they would not have to make their own FERC power marketer filings. (Also, Enron generally has to also file for "EWG" Exempt Wholesale Generator status due to utility rules; however, if the industrial is primarily an industrial business in something other than power generation, an EWG determination is not required.) I will keep you advised on the status of the filing(s) once made. Subject: In Power Marketing --FERC order On 3/30/2000, FERC issued an order accepting InPower's market based rates schedule that would permit entities that own generation to meet their own loads or for back up purposes (IPPs) to sell power at market based rates to InPower (on a profit share basis). InPower made the filing stating it estimated that IPPs in MAIN (and, specifically, Wisconsin) could supply a substantial portion of the summer energy shortfalls (FERC did not limit ImPower to IPPs in MAIN). InPower did not name any specific IPPs; however, to be eligible under ImPower's program, an IPP must control generation primarily for the purpose of meeting on-site demand or providing back-up generation and have such generation located on its premises or premises approved by the local utility. Further, the generation must be capable of producing electricity either synchronous with the local utilities' grid or commensurate with agreements with the local utility. Total sales made by IPPs in ImPower's program would not exceed 1000 MW/ hour. The IPPs are in businesses other than the sale of electricity and are simply seeking "incremental return on the often-unused capacity of their generation assets." When an IPP participates in ImPower's program, it becomes subject to FERC's jurisdiction as a "public utility." Jacksonville Electric Authority (JEA) protested ImPower's filing stating it allows retail customers to arbitrage retail and wholesale power markets by purchasing power at average, embedded cost retail rates and simultaneously using their generating facilities to sell power at wholesale to ImPower (at peak times). FERC addressed JEA's concerns by saying that the IPPs cannot violate any rules and requirements properly imposed on the retail sales made to those suppliers. This order allows ImPower (as an aggregator) to make the required quarterly filings for the IPPs and the IPPs do not have to apply for separate market based rates authority. The are some additional reporting requirements FERC waived for the IPPs: accounting and reporting, issuance of securities and interlocking directorates (an affidavit is still needed). Please let me know if you would like a copy of the filing or order.