Message-ID: <16165985.1075846345488.JavaMail.evans@thyme> Date: Thu, 13 Jul 2000 03:16:00 -0700 (PDT) From: linda.lawrence@enron.com To: daniel.allegretti@enron.com, roy.boston@enron.com, jeff.brown@enron.com, susan.covino@enron.com, paul.kaufman@enron.com, steven.kean@enron.com, robin.kittel@enron.com, leslie.lawner@enron.com, susan.landwehr@enron.com, richard.shapiro@enron.com, james.steffes@enron.com, lisa.yoho@enron.com, elizabeth.linnell@enron.com, janine.migden@enron.com, christi.nicolay@enron.com, susan.mara@enron.com, joe.hartsoe@enron.com, robert.hemstock@enron.com, mary.hain@enron.com, jeff.dasovich@enron.com, tom.delaney@enron.com, patrick.keene@enron.com, harry.kingerski@enron.com, sarah.novosel@enron.com, aleck.dadson@enron.com Subject: FERC Meeting --July 12, 2000 Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Linda L Lawrence X-To: Daniel Allegretti, Roy Boston, Jeff Brown, Susan T Covino, Paul Kaufman, Steven J Kean, Robin Kittel, Leslie Lawner, Susan M Landwehr, Richard Shapiro, James D Steffes, Lisa Yoho, Elizabeth Linnell, Janine Migden, Christi L Nicolay, Susan J Mara, Joe Hartsoe, Robert Hemstock, Mary Hain, Jeff Dasovich, Tom Delaney, Patrick Keene, Harry Kingerski, Sarah Novosel, Aleck Dadson X-cc: X-bcc: X-Folder: \Steven_Kean_Dec2000_1\Notes Folders\Ferc X-Origin: KEAN-S X-FileName: skean.nsf July 12, 2000 Via Internet MEMORANDUM TO: Interested Clients FROM: John & Hengerer RE: Commission Meeting -- July 12, 2000 At today's Commission meeting, the Commissioners approved the consent agenda and then discussed the following items. ELECTRIC MATTERS Order Nos. 888 and 889 Chairman Hoecker announced the D.C. Circuit Court of Appeals' decision affirming the Commission's Order Nos. 888 and 889. In its decision, the Court affirmed the open access principles and stated that public utilities must provide access to their transmission lines to purchasers and sellers of electricity in the interstate market. While congratulating the Staff for a job well done, Chairman Hoecker also noted that these orders are only a first step with the next step being Order No. 2000, which is targeted at making the national grid available on fairer terms and more efficient for all transmission users. He also added that functional unbundling has proven to be inadequate, and that a voluntary regime for reliability is not compatible with a competitive market. Finally, he addressed the lack of investment in transmission and generation and that he expressed hope that there will be federal legislation addressing jurisdictional transmission issues. Commissioner Massey noted that the Court affirmed a mandatory open access approach, thus translating well for a move to a similar mandatory approach for RTO policy. Open Access Same-Time Information System (OASIS) Phase II, Docket No. RM00-10 Today, the Commission issued, with Commissioner Hebert concurring, an advanced notice of proposed rulemaking to begin the development of OASIS, Phase II. By February 15, 2001, interested parties are asked to file detailed standards for communication protocols and business practices for transmission providers and customers to reserve and schedule transmission. The standards are expected to be in operation by December 15, 2001, to coincide with the date RTOs are to become operational. This proceeding is considered to be part of a continuing evolution of OASIS in order to account for e-commerce and the development of RTOs, while also addressing the need for fewer seams among regions, increased communications across regions, and an increase in functionality via uniformity. The Commissioners urged the industry to develop an industry consensus in order to allow for an expedited implementation process. However, in his concurrence, Commissioner Hebert expressed concern that this proceeding is unnecessary and/or a distraction to competition and to viable, stand-alone transmission entities. Commissioner Hebert believes that this implementation issue already is covered by Order No. 2000's recognition of the need for interregion coordination and deeming the RTO as the OASIS administrator. Thus, according to Commissioner Hebert, OASIS Phase II is a A waste of time@. He also noted his concern that the tight timetable may stifle innovation, while diverting attention away from more important issues such as scope and pricing. NATURAL GAS MATTERS Post-Order No. 637 Workshops The first post-Order No. 637 workshop has been announced for September 19th as a technical conference. The subject matter will include changes in the market, rates and service changes needed for a more liquid gas market, the role of service standardization, and how the electric generation market can be supported. Details on the conference are to follow shortly. Independence Pipeline Company, Docket Nos. CP97-315, et al. As part of the consent agenda, the Commission granted a certificate of necessity and convenience to the Independence Pipeline project. Well Category Determinations, Docket No. RM00-6 In response to a court decision, which called into question tax credits for certain wells, the Commission approved a final rule re-instating a process for natural gas production well category determinations. The rule establishes certain formations and types of wells that can be classified as high cost gas eligible for tax credits under Section 29 of the IRS Code. The rules were established to satisfy the court's ruling that a NGPA section 503 well determination needed to be performed by FERC for the wells to be eligible for the tax credit. The Commissioners noted that this rulemaking provides equity for gas producers who have relied on the tax credit, while also fulfilling a Congressional expectation.