Message-ID: <28872504.1075846346149.JavaMail.evans@thyme>
Date: Wed, 15 Mar 2000 14:34:00 -0800 (PST)
From: sarah.novosel@enron.com
To: richard.shapiro@enron.com, steven.kean@enron.com, joe.hartsoe@enron.com, 
	james.steffes@enron.com, janine.migden@enron.com, 
	susan.landwehr@enron.com, christi.nicolay@enron.com
Subject: FERC Order on AEP/CSW Merger
Mime-Version: 1.0
Content-Type: text/plain; charset=ANSI_X3.4-1968
Content-Transfer-Encoding: quoted-printable
X-From: Sarah Novosel
X-To: Richard Shapiro, Steven J Kean, Joe Hartsoe, James D Steffes, Janine Migden, Susan M Landwehr, Christi L Nicolay
X-cc: 
X-bcc: 
X-Folder: \Steven_Kean_Dec2000_1\Notes Folders\Ferc
X-Origin: KEAN-S
X-FileName: skean.nsf

FERC issued an order today approving, with conditions, the merger between A=
EP=20
and CSW.  EPMI was active in this proceeding, arguing that the merging=20
companies have transmission market power and that FERC should require the=
=20
companies to mitigate that market power before approving the merger.  EPMI=
=20
proposed that the companies be required to form a TransCo before the merger=
=20
could be approved.

Although the Commission did not require the companies to form a TransCo=20
before approving the merger, the Commission did agree with many issues rais=
ed=20
by EPMI and other intervenors, and the Commission adopted the testimony=20
submitted by Enron and two other intervenors on this issue of market power=
=20
(rather than adopting the rebuttal testimony submitted by AEP where AEP=20
attempts to prove that it will not have market power after the merger). =20
Specifically, the Commission found that the merged entity will have market=
=20
power, so it ordered the companies to join a FERC-approved RTO by the Order=
=20
No. 2000 deadline (i.e., December 15, 2001).  Under Order No. 2000, an RTO=
=20
can be a TransCo, an ISO, or some hybrid of the two. =20

Furthermore, the Commission found that because the companies=01, market pow=
er=20
will not be eliminated until the RTO is up and running, interim mitigation=
=20
measures are also needed during the period prior to RTO membership. =20
Specifically, FERC requires the companies to turn over the duties of=20
calculating and posting ATC to an independent third party (a suggestion mad=
e=20
by EPMI), and also directs AEP to provide generation dispatch information t=
o=20
an independent market monitor in order to monitor AEP=01,s generation activ=
ity. =20
The Commission orders AEP to respond to FERC within 15 days of whether AEP =
is=20
prepared to accept these conditions. =20

We will continue to monitor this proceeding and we will notify you of any=
=20
significant developments.  Please call me if you have any questions.