Message-ID: <7905608.1075851007689.JavaMail.evans@thyme> Date: Fri, 16 Jun 2000 13:49:00 -0700 (PDT) From: cynthia.sandherr@enron.com To: ginger.dernehl@enron.com Subject: Federal Electricity Restructuring Update Cc: steven.kean@enron.com, richard.shapiro@enron.com, joe.hillings@enron.com, chris.long@enron.com, stephen.burns@enron.com, allison.navin@enron.com, amy.fabian@enron.com, lora.sullivan@enron.com, joe.hartsoe@enron.com, sarah.novosel@enron.com, robin.kittel@enron.com, jeffrey.keeler@enron.com, dwatkiss@bracepatt.com, awenner@velaw.com, ed@buckham.com, karlgallan@aol.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: steven.kean@enron.com, richard.shapiro@enron.com, joe.hillings@enron.com, chris.long@enron.com, stephen.burns@enron.com, allison.navin@enron.com, amy.fabian@enron.com, lora.sullivan@enron.com, joe.hartsoe@enron.com, sarah.novosel@enron.com, robin.kittel@enron.com, jeffrey.keeler@enron.com, dwatkiss@bracepatt.com, awenner@velaw.com, ed@buckham.com, karlgallan@aol.com X-From: Cynthia Sandherr X-To: Ginger Dernehl X-cc: Steven J Kean, Richard Shapiro, Joe Hillings, Chris Long, Stephen D Burns, Allison Navin, Amy Fabian, Lora Sullivan, Joe Hartsoe, Sarah Novosel, Robin Kittel, Jeffrey Keeler, dwatkiss@bracepatt.com, awenner@velaw.com, ed@buckham.com, karlgallan@aol.com X-bcc: X-Folder: \Steven_Kean_Oct2001_2\Notes Folders\Attachments X-Origin: KEAN-S X-FileName: skean.nsf Ginger: would you please distribute the following memo to the Government Affairs group. Thank you! Congress continues to advance the Electricity Restructuring Legislative debate. On Tuesday, June 20th, the Senate Energy Committee plans to mark-up and pass Senator Gorton's Reliability bill including the consensus state savings clause language. Attached below (attachment 6-17 jt.st.wpd) is the 46 page joint Senate staff draft which represents agreement in many areas, but the differences remain significant. No agreement was reachable at this time in Committee on the extent of FERC jurisdiction to prevent unreasonable differences between wholesale and retail service nor reached on the RPS. Although the 46 page draft includes language on PURPA, Reciprocity ,Consumer Protection, Interconnection, etc.; currently only two Senators support the additional language included in the 46 pages; thus, the only chance of moving through the Senate Energy Committee this year is to pass Reliability-only now. With the make-up of the Senate Energy Committee, our strategy is "to do no harm" in committee thus, making the reliability language-only option acceptable as a means to an end. Enron does support the Reliability bill but we will insist on adding transmission access and functional separation language later in the process while EEI will insist on adding PUHCA while APPA will insist on adding Private Use (thus, we can see what the final consensus will look like; plus we have been involved in drafting the consensus in all these provisions.....but timing and sequence are crucial.) It might be helpful to remind everyone that the bills leading up to the Energy Policy Act of 1992 as passed by the Committees were also amended in Conference since it was impossible to garner the necessary Committee votes or survive a Senate filibuster with any Committee-included wheeling language. Transmission wheeling/ access language was successfully added in Conference. Thus, the sequence of adding our necessary provisions remains key to a successful strategy then as it does now. Also attached is Chairman Bliley's Reliability and Transmission discussion draft (section by section, summary and 005_PDF). This is the foundation from which he is willing to add additional consensus amendments. From Enron's view ,this foundation draft is our exact wish list to clarify FERC jurisdiction over both bundled and unbundled transmission (although we have suggested a few technical drafting points which have already been conveyed to staff.) It is important for all of us to convey our support for this draft as the essential foundation for the bill. Mark-up will likely be scheduled to occur during the week of June 26th. It is important to note that Subcommittee Chairman Barton is philosophically opposed to the Bliley/Enron "pro-FERC" approach. As such, he has asked Texas PUC Chairman Pat Wood and Oklahoma Corporate Commission Chairwoman Denise Bode to draft a compromise to lighten the FERC authority in favor of a more Regional Approach. I just got off the phone with Pat who walked me through the draft he was submitting this evening to Barton (once it is officially transmitted, I will be able to get a copy to you, likely on Monday or Tuesday.) From Pat's description, we should be able to be supportive since he shares our views about wholesale markets needing federal authority. He discussed a draft that mandates RTO participation, a seven point mandatory RTO test filed at FERC in 60 days after enactment, Ratemaking established by the state but allowing FERC appeal, allowing FERC appeal if 2/3rd's disagree, State authority but also ongoing FERC authority with an expedited dispute resolution process. The seven point mandatory filing details are 1. full wholesale competition under the same terms, rates and conditions; 2. RTO sole functional control of transmission; 3. functional separation of generation from transmission; 4. curtailment on non-discriminatory basis; 5. all transmission uses disclosed and transparent (889); 6. constant assessment of construction needs; and 7. remedy and emergency authority for dispute resolution. He mentioned Denise's insistence for interconnection on a non-discriminatory basis which he feels is adequately addressed in their draft. From Pat's discussions with Reliant on his draft, they again spoke in support of Enron's transmission open access goals. TXU remains concerned that ERCOT will be pulled under FERC jurisdiction in the draft. But, it is Pat's view that this already has happened under the state law. Our goal next week is to lock-in bipartisan House Committee support and House Leadership support for the mark-up plus tighten the mark-up process so it is transparent to all; plus to pass the Senate Committee bill. A bill to meet our established goals is still doable this year. My strategy was always based upon the necessity to lead with the reliability language in order to create a legislative vehicle for us to include our non-discriminatory transmission access provisions. Please call should you need clarification or have questions. Many thanks for your continued support. - sectionbysection.wpd - summarydoc.wpd - 005_.PDF